EU’s top court rules too many free pollution allowances given to industry

Posted on 28 April 2016

Energy-intensive industries have received too many pollution permits under the EU’s Emissions Trading Scheme (EU ETS), the European Court of Justice ruled today.

Brussels, Belgium - 28 April 2016

Energy-intensive industries have received too many pollution permits under the EU’s Emissions Trading Scheme (EU ETS), the European Court of Justice ruled today.

“The EU ETS needs to be reformed in order to make polluters pay, rather than paying polluters, as today’s ruling confirms. Policy makers must ensure that the European carbon market delivers more and faster emission reductions, and commit to phasing out free pollution permits”,  commented Imke Lübbeke, head of climate and energy at WWF European Policy Office.

€24 billion in pollution permits - or ‘emissions allowances’  - were handed out by the European Commission to the most polluting industries, such as chemicals, steel and refineries in 19 European countries from 2008-2014.
Yet several companies from those industries went to court to demand even more free pollution permits in order to reduce the perceived risk of job losses to regions with less stringent pollution rules - so-called ‘carbon leakage’ - even though there has never been any evidence of such carbon leakage.

“We must not allow scaremongering by a handful of large polluters to undermine the ETS, and its ability to deliver a high level of environmental protection,“ said Lübbeke.

The Court today not only ruled that energy intensive industries’ claim to need more free pollution permits was unfounded, but went further still by ruling that the maximum amount of emission allowances has to be re-calculated by the European Commission.

Note to the editor:

WWF is calling on EU policy makers to go beyond the European Commission’s current proposal and fundamentally reform the ETS for the the post-2020 period. Such a reform must increase the amount of auctioned emissions allowances to 100% over time and re-invest the revenues in energy savings and renewable energy technologies, inside the EU and internationally.

WWF is also urging better targeting of free emissions allowances to those that really need. This can be achieved by introducing a tiered approach based on a realistic and transparent assessment of the “carbon leakage” risks of each industrial sector.

Today’s cases were brought to court by several companies from energy intensive sectors as chemicals, steel and refineries, as follows:

-          C-191/14 and C-191/15 (Austria) by Borealis Polyolefine GmbH and OMV Refining & Marketing GmbH

-          C-295/14 (Netherlands) by DOW Benelux BV, Esso Nederland BV, ExxonMobil Chemical Holland BV, Kuwait Petroleum Europoort BV, Rütgers Resins BV, Koppers Netherlands BV, Yara Sluiskil BV, BP Raffinaderij Rotterdam BV, Zeeland Refinery NV, ESD-SIC BV, DSM Delft Permit BV, SABIC Innovative Plastics BV, Shell Nederland Raffinaderij BV, Shell Nederland Chemie BV, Akzo Nobel Chemicals BV, Akzo Nobel Industrial Chemicals BV, Emerald Kalama Chemical BV, Nedmag Industries Mining & Manufacturing Holding BV, Rosier Nederland BV, Nederlandse Aardolie Maatschappij BV, Tata Steel IJmuiden BV, Chemelot Site Permit BV, Eska Graphic Board BV, Koch HC Partnership BV

-          C-389/14, C-391/14, C-392/14 and C-393/14 (Italy) by Esso Italiana srl, Eni SpA, Linde Gas Italia srl, Api Raffineria di Ancona SpA, SpA Lucchini in Amministrazione Straordinaria, Dalmine SpA

Further information:

Sarah Azau 
Communications and Media Officer - Climate Change and Energy
Phone: +32 2 743 88 06 / Mobile: +32 473 573 137
Emissions, Corus steel plant, Redcar, Teesside, UK
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