Posts Tagged Article 191 TFEU

Mengozzi AG saves ETS in energy policy legal basis opinion.

Others have studied the EU’s legal basis for energy policy much better than I have. Chiefly among them prof Leonie Reins. e.g.  for RECIEL here and in her Phd here. The impact of this discussion is high: since the introduction of an energy Title in the EU Treaties (following Lisbon) whether so designed or not, the prospect of that Title’s requirement on unanimity for measures which ‘have a significant effect on a Member State’s choice between different energy sources’ looms heavily over the EU’s environment policy. The EU’s emissions trading system – ETS is the prime candidate for falling victim to an extensive interpretation of Article 192(2)c TFEU, which harbours the unanimity requirement.

In C-5/16 Poland v EP and Council Mengozzi AG Opined last week. At issue is Poland’s opposition to a MSR – a market stability reserve for the Union greenhouse gas emission trading scheme, essentially a long-term parking for surplus allowances to enable the ETS to safeguard collapse of prices in the event of excess supply. The resulting increase in the price of allowances was inter alia intended to encourage fuel switching and to discourage investments in coal-fired power stations (hence of course Poland’s interest).

Relevant to future reference is especially the AG’s view at 25, which I include in full: ‘as a derogation, Article 192(2)(c) TFEU is to be interpreted strictly, especially since an efficient modern environment policy cannot ignore energy questions. I share the fears expressed by the defendants and the interveners that the applicant’s proposed interpretation of Article 192(2)(c) TFEU and the conclusions which it draws from that interpretation for the examination of the legal basis of the contested decision would effectively block any legislative initiative by recognising a right of veto for Member States, as the Union would adopt measures inviting them only to rationalise their CO2-consuming activities. Furthermore, such an interpretation would doom the ETS to failure as it would prevent the EU legislature from correcting its structural deficiencies. In addition, although I would point out that the goal of introducing the MSR is not to form the price of allowances but simply to ensure the efficiency of the ETS, in any event, an operator’s choice of a certain energy source or production technology cannot depend on that price alone, which does not in itself define the production costs, which are determined by a variety of factors. Even with the introduction of the MSR, the choice of technology still remains in the hands of operators and is not dictated by the European Union.’

I am not sure to what degree the Court’s judgment will enable us to draw criteria with wider impact than just the current case – but it would certainly be helpful. Mengozzi AG firstly emphasises strict interpretation of the ‘energy mix’ exception. Further, in the paras preceeding the aforecited one, links amendments to existing laws largely to the latter’s legal basis. Supports the Institutions and Spain, France and Sweden (intervening; the position of Germany, also intervening, was not made clear) in their warning against veto power in the energy /climate change context; and finally further dilutes the exception by looking at policies as they work in practice, not just in theory. On this point, the AG looks at the ETS specifically however his view has broader appeal: it would essentially mean that when Member States’ and individuals’ /undertakings’ behaviour is determined by regulatory intervention, some of which clearly based on a legal basis other than Article 192(2)c TFEU, the latter is not determinant in deciding proper legal basis.

This is an important case for the future of EU environment and energy policy.

Geert.

 

 

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FIPA, Tws Automation and Ivan: ECJ confirms the secondary nature of ‘principles’ in EU environmental law

European environmental law principles may not have practical legal force in and of themselves. They are transposed into secondary law. It is their (incorrect) application and interpretation in conjunction with secondary law, which gives rise to citizens and corporations calling upon the principles to support their individual position. Hence despite their trumpeted value as ‘principles’, in the law in practice, individual citizens or corporations need transposition of said principles in secondary law, to argue that such secondary law has infringed the principles.

A clear application of this reality, is the recent ECJ judgment in Case C-534/13, a case with an impossibly long series of applicants and defendants, which for ease of reference I have dubbed FIPA, Tws Automation and Ivan in title of current posting. (After the main protagonists).

The main issue that arose, was whether national (Italian) legislation under which no provision is made for the authorities to require owners of polluted land who have not contributed to that pollution to carry out preventive and remedial measures, and the sole obligation imposed concerns the reimbursement of the measures undertaken by those authorities, is compatible with the ‘polluter pays’ principle, the precautionary principle and the principles that preventive action should be taken and that environmental damage should be rectified at source as a matter of priority.

The ECJ emphasises the role of Directive 2004/35 in this context. Held that the Directive does not hold against such absence. And recalled in line with previous case-law, that the environmental principles of the Treaty ‘do no more than define the general environmental objectives of the European Union, since Article 192 TFEU confers on the European Parliament and the Council of the European Union, acting in accordance with the ordinary legislative procedure, responsibility for deciding what action is to be taken in order to attain those objectives. (…)  Consequently, since Article 191(2) TFEU, which establishes the ‘polluter pays’ principle, is directed at action at EU level, that provision cannot be relied on as such by individuals in order to exclude the application of national legislation — such as that at issue in the main proceedings — in an area covered by environmental policy for which there is no EU legislation adopted on the basis of Article 192 TFEU that specifically covers the situation in question (…) Similarly, the competent environmental authorities cannot rely on Article 191(2) TFEU, in the absence of any national legal basis, for the purposes of imposing preventive and remedial measures.(…)’ (at 39-41)

A sobering conclusion, yet one solidly rooted in legal practice and institutional balance. Geert.

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