Germany defeats EU in landmark emissions ruling

8th November 2007, Comments 0 comments

8 November 2007, Brussels (dpa) - The European Union's second-highest court ruled Wednesday that member states are allowed under current rules to change their national greenhouse-gas emissions quotas. In a landmark verdict that could trigger further legal challenges to the system, the Luxembourg-based Court of First Instance (CFI) ruled that the European Commission - the EU executive - had no reason to block a German law allowing the state to redistribute emissions quotas for carbon dioxide (CO2) after the

8 November 2007

Brussels (dpa) - The European Union's second-highest court ruled Wednesday that member states are allowed under current rules to change their national greenhouse-gas emissions quotas.

In a landmark verdict that could trigger further legal challenges to the system, the Luxembourg-based Court of First Instance (CFI) ruled that the European Commission - the EU executive - had no reason to block a German law allowing the state to redistribute emissions quotas for carbon dioxide (CO2) after they had been allocated.

"The Commission has not demonstrated that the subsequent downward adjustments ... infringe the criteria laid down in the (EU) directive" on trading CO2 allowances, the CFI ruled.

The ruling could well trigger a wave of legal challenges as other member states, unhappy with their current CO2 allocations, try to test the limits of the 27-member bloc's key climate-change scheme.

In 2003, the EU launched an unprecedented scheme to bring down the amount of CO2 the bloc emits by setting quotas for each country.

Member states were tasked with sharing out those quotas among the most polluting enterprises, such as power plants and factories. Businesses which emitted less CO2 than their quota allocation would be allowed to sell the rest to businesses which emitted too much.

The idea was to encourage industries to cut their emissions and boost research and investment in low-carbon technologies.

But in March 2004, the German government decided that it should be allowed to reduce CO2 allocations already made to individual companies, including newly-founded ones, if it turned out that they were producing substantially less gas than forecast.

That move was aimed at stopping companies making an inflated forecast of their emissions, receiving an unfairly generous licence and then selling the balance.

In July 2004 the Commission declared that system of so-called "ex-post adjustments" illegal, saying that it broke the rule that quotas should be fixed in advance and that it would discriminate against new market entrants, according to CFI papers.

A Commission spokesman on Wednesday said that the Commission had challenged the move as setting a possibly dangerous precedent.

Germany took the case to the CFI, which ruled that the Commission had failed to prove that the requirement to fix quotas in advance could be used on its own to outlaw the German reallocation law.

The Commission's view on discrimination was "manifestly contradictory and erroneous," a CFI statement added.

Several other EU members have clashed with the Commission over their desire to bring in similar re-allocation systems, the Commission spokeswoman said.

Germany was awarded an annual CO2 emissions cap for the 2005-2007 period of 499 million tonnes, by far the highest national limit in the bloc.

German emissions for 2005 were verified at 474 million tonnes, and the Commission has proposed a new yearly cap for the 2008-2012 period of 482 million.

DPA

Subject: German news

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