Italian firm loses ETS challenge

The European Court of Justice (ECJ) has thrown out a legal challenge mounted by Buzzi Unicem SpA, an Italian producer of cement, concrete and natural aggregates, regarding a decision of the European Commission to modify Italy's national allocation plan (NAP) for the second phase of the EU emission trading scheme.

In its national allocation plan for the period 2008 – 2012 Italy had included a provision which envisaged the possibility of adapting its NAP, in certain circumstances, so as to enable operators to preserve part of their allocated quotas in the event that they decided to close down some of their operations during a rationalisation of their production capacities.

In its decision the Commission stated that it approved Italy’s NAP, subject to certain modifications. As the Italian NAP was incompatible with criterion 10 of Annex III of Directive 2003/87/EC (establishing a scheme for greenhouse gas emission allowance trading within the Community) the Commission required Italy to modify its NAP so as to remove the provision that would enable an operator to keep his allotted emissions allowances in the event of closing down some of his operations in a rationalisation of production.

Despite Buzzi’s claims that removal of this provision would affect it in a direct and individual way, because of its needs to rationalise production capabilities by transferring production from two plants which were nearing obsolescence to more modern plants which would require more carbon allowances, the ECJ held that Buzzi did not have the right to challenge the Commission’s decision because it had not shown that it would be individually affected.

Furthermore, the court said it was possible that other firms would be considering a similar rationalisation process.

Buzzi submitted that in being denied the right to challenge the Commission’s decision before the European Court it had been left without legal redress. However, the Court dismissed this claim, stating that Buzzi still had the right to challenge in national courts.

The decision of the ECJ is available in a number of European languages via the link below:-

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