Case T-369/07
Republic of Latvia
v
European Commission
(Environment – Directive 2003/87/EC – Scheme for greenhouse gas emission allowance trading – National allocation plan for the allocation of emission allowances for Latvia for the period from 2008 to 2012 – Three-month time-limit – Article 9(3) of Directive 2003/87)
Summary of the Judgment
1.Actions for annulment – Actions brought by Member States
(Art. 263 TFEU)
2.Environment – Atmospheric pollution – Directive 2003/87 – National allocation plan for the allocation of greenhouse gas emission allowances (NAP) – Notification by a Member State – Commission’s power of supervision – Scope – Legal nature of the Commission decision
(European Parliament and Council Directive 2003/87, Art. 9(3))
3.Environment – Atmospheric pollution – Directive 2003/87 – National allocation plan for the allocation of greenhouse gas emission allowances (NAP) – Notification by a Member State – Concept
(European Parliament and Council Directive 2003/87, Art. 9(3))
4.Acts of the institutions – Presumption of validity – Non-existent measure – Concept
(Art. 288 TFEU)
1.All Member States have the right to contest the legality of decisions of the Commission by means of an action for annulment, without having to establish any legal interest in bringing proceedings. A Member State need not therefore prove that an act of the Commission which it is contesting produces legal effects with regard to that Member State in order for its action to be admissible. Legal interest in bringing proceedings covers only actions brought by legal persons and individuals and not those brought by institutions of the European Union or the Member States.
Moreover, the concept of legal interest in bringing proceedings must not be confused with the concept of challengeable measure, under which a measure must be intended to produce legal effects which may be adverse in order to be capable of being challenged through an action for annulment, which issue must be determined by looking to its substance.
A Commission decision concerning an amendment to a national allocation plan for the allocation of greenhouse gas emission allowances (NAP) does produce such legal effects.
(see paras 33-34)
2.The prior review carried out pursuant to Article 9(3) of Directive 2003/87 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Directive 96/61 does not necessarily lead to a decision by the Commission. Whilst it is of course required, following notification of an NAP, to check, in a careful and impartial manner, the compatibility of that NAP with the criteria of Annex III and the provisions of Article 10 of Directive 2003/87, the wording ‘may reject’ indicates that the Commission has a certain margin of discretion in that regard. It also follows that, if within three months following the Member State’s notification of its NAP, the Commission opts not to exercise that power, the Member State may, in principle, implement the NAP under the terms laid down in Article 11 et seq. of Directive 2003/87, without any requirement of approval by the Commission. Thus, the procedure for reviewing NAPs need not necessarily culminate in a formal decision, particularly when the Member State makes all the amendments requested in the course of that procedure.
By contrast, the Commission may decide to use its decision-making power under the second sentence of Article 9(3) of Directive 2003/87 where the Member State refrains from amending its NAP or refuses to do so before the expiry of the three-month time-limit, despite the objections raised. If the Commission does not take such a rejection decision, the notified NAP becomes definitive and there is a presumption of legality allowing the Member State to implement it.
The amendments introduced during a subsequent phase of the review procedure, namely after the Commission has expressed its objections to the notified NAP or certain aspects thereof are aimed specifically at addressing the objections initially expressed by the Commission about the compatibility of those aspects with the criteria laid down in Annex III and the provisions of Article 10 of Directive 2003/87. Accordingly, the acceptance of those amendments by the Commission is merely the corollary of the objections initially expressed by it as part of its power to review and reject NAPs under Article 9(3) of Directive 2003/87, and not the expression of a general power of authorisation. Moreover, the Commission need not accept the amendments made to the NAP by way of formal decision. On the contrary, such an interpretation, first, runs counter to the principle that the Commission does not have a general power to authorise NAPs. Second, it is inconsistent with the overall wording of the third sentence of Article 9(3) of Directive 2003/87, which contemplates only a rejection decision and not an authorisation decision.
(see paras 47-48)
3.The purpose of the procedure under Article 9(3) of Directive 2003/87 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Directive 96/61, apart from permitting the Commission to exercise a prior review, is to provide legal certainty for the Member States and, in particular, to permit them to be sure, within a short time, how they may allocate emission allowances and manage the allowance trading scheme on the basis of their NAP during the allocation period in question. Having regard to the limited duration of such a period, which is three or five years (Article 11 of Directive 2003/87), both the Commission and the Member States have a legitimate interest in resolving quickly any dispute concerning the contents of the NAP and in ensuring that, during the entire period of its validity, the NAP does not risk being contested by the Commission.
Those considerations apply to any NAP, irrespective of whether it is the version as initially notified or as revised and subsequently notified. Moreover, the requirement for the Commission to carry out a prompt and effective review following notification of a revised NAP is all the more important where that review has already been preceded by a first review stage of the initial NAP which led to a rejection decision and, subsequently, to amendments to that NAP. The Commission’s submission that it is allowed to review proposed amendments to an NAP, or a revised NAP, without having to comply with the three-month time-limit provided for in Article 9(3) of Directive 2003/87 is liable to undermine the objective of a prompt and effective review as well as the legal certainty to which a notifying Member State is entitled in order to be able to allocate emission allowances for installations located in its territory before the beginning of the exchange period pursuant to Article 11 of that directive.
Consequently, the concept of notification within the meaning of Article 9(3) of Directive 2003/87 encompasses both initial notifications and subsequent notifications of different versions of an NAP, with the result that each of those notifications triggers a new three-month time-limit.
(see paras 54, 55, 57)
4.The procedural defect consisting in non-compliance with the three-month time-limit within the meaning of Article 9(3) of Directive 2003/87 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Directive 96/61 is not so serious and manifest as to justify categorising the contested decision as a non-existent measure. Measures of the Community institutions, even though irregular, are in principle presumed to be lawful and accordingly produce legal effects until such time as they are withdrawn, declared void in an action for annulment or declared invalid following a reference for a preliminary ruling or a plea of illegality.
Given the particularities of the review procedure under Article 9(3) of Directive 2003/87, illegality consisting in the lateness of the contested decision cannot lead to its being a non-existent measure, the principle of legal certainty being so fundamental that such a finding must be limited to the most extreme cases.
(see para. 61)