UK v Commission. Emissions Trading

Following the Commission's rejection of the UK's proposed amendment to the total quantity of allowances in the UK's National Allocation Plan (NAP) for Phase 1 (2005-2007) of the EU ETS, the UK's legal challenge against the European Commission was heard by the European Court of First Instance on the 18 October 2005 further to proceedings having been initiated in March of last year.

The amendment proposed by the UK last year sought an increase of around 20 million allowances to the total previously submitted within the provisional NAP, which would bring the total quantity of allowances to be allocated to installations in the UK to 756 million. However the Commission refused to consider the substance of the amendment. Legal proceedings were therefore launched by the UK against the Commission, though in the meantime the UK decided to make allocations at the previously approved total of 736 million, in order to allow operators of UK installations covered by the Scheme to start participating fully as soon as possible.

The case against the European Commission seeks to require the Commission to consider the substance of the proposed amendment by way of an application to the Court of First Instance, and an application for proceedings to be expedited. While the case was heard in October, the judgement is unlikely to be issued any earlier than the first half of 2006.

However, the UK’s challenge faces criticism as if successful, it would allow the UK Government to increase its emission and further reduce its ability to meet targets for reductions of carbon dioxide.


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