Case C-504/09 P Commission v Poland

Commission exceeding its powers by imposing on two Member States a ceiling on greenhouse gas emission allowances

>> The Directive 2003/87 (the Emissions Trading Directive) establishes a scheme for greenhouse gas emission allowance trading within the Community in order to reduce the effect of those emissions on the climate.

The Directive provides that, for each five year period, each Member State is to develop a national allocation plan (NAP) stating the total quantity of allowances that it intends to allocate for that period and how it proposes to allocate them.

Such plan has to be published and notified to the Commission and to the other Member States. If the plan is incompatible with the criteria laid down in the Directive, the Commission can reject the NAP or any aspect thereof.

In 2006, Poland and Estonia notified their NAPs to the Commission for the period from 2008 to 2012. By two decisions of 2007, the Commission found those NAPs to be incompatible with a number of the criteria in the Directive and decided that it was necessary to reduce, by 26.7%2 and 47.8%3 respectively the total annual quantities of emission allowances compared to the amount which those two Member States proposed to issue.

At first instance, the General Court annulled the contested decisions, on the ground that by adopting those decisions the Commission had exceeded its powers. It also held that the Commission, by its decision addressed to Poland, had failed to comply with the duty to state reasons and, in relation to Estonia, the principle of sound administration. The Commission appealed.

The Court argued that it could not be denied that Directive 2003/87 did not lay down a particular method for elaboration of a national allocation plan or for the fixing of the total quantity of greenhouse gas emission allowances to be granted. Indeed on the contrary, Annex III, point 1, of that directive expressly provided that the Member States must lay down the total quantity of allowances to be allocated taking into account, inter alia, the national energy policy and the national climate change programme.

The Court found that the General Court had correctly concluded that the Member States had a certain margin for manoeuvre in transposing Directive 2003/87 and, therefore, in choosing the measures which they consider most appropriate to achieve, in the specific context of the national energy market, the objective laid down by that Directive.

It was true that there might be great differences in the types of obligations which directives impose on the Member States and therefore in the results which they must achieve. It was also common ground that provisions of a directive which concerned only the relations between the Member States and the Commission might not require to be transposed (see, to that effect, Case C-32/05 Commission v Luxembourg [2006]). According to the Court, that was however irrelevant for the outcome of the present dispute. 

The Court held that it could not be denied that Arts 9 and 11 of Directive 2003/87 governed the respective roles of the Commission and the Member States in the context of the procedure for adoption of the national allocation plans, that was to say the allocation of powers between them. According to the Court, those provisions made it possible to determine whether the Member States enjoyed a margin for manoeuvre when drawing up their plan and, as the case might be, what was the scope thereof.