A brief note on Case C-165/20 Air Berlin in which the CJEU held that under the EU’s emission trading scheme, the number of greenhouse gas emission allowances allocated free of charge to an aircraft operator must, in the event of cessation of that operator’s aviation activities (here due to insolvency) during the period of greenhouse gas emission allowance trading in question, be reduced in proportion to the part of that period during which those activities are no longer carried out.
Of note is in particular the Opinion of Advocate General Hogan who earlier, in answering arguments with respect to property rights and the need for their protection under the EU Charter of Fundamental Rights and Freedoms, had opined (28) that
‘Given that the allowances in question were allocated free of charge pursuant to an EU legislative scheme and do not derive from the assets or occupational activity of an aviation operator, in this case Air Berlin, they do not constitute property rights which must be safeguarded by the Union legal order pursuant, inter alia, to Article 17 of the Charter’
‘The emissions trading scheme is simply a mechanism designed to incentivise certain economic behaviour (namely, the reduction of greenhouse gases). While the allowances could be and were traded, this was permitted in the context of undertakings otherwise engaging in economic activity (such as aviation) which perforce was liable to contribute to environmental pollution. It was never envisaged that these allowances could themselves be monetised independently of this economic activity or that they would be regarded as tantamount to a form of quasi-currency which could then be treated as a liquid asset in an insolvency.’