(Action for annulment— Energy— Directive (EU) 2018/2001 on the promotion of the use of energy from renewable sources— Limit on biofuels and biomass fuels produced from food and feed crops— Delegated Regulation (EU) 2019/807

ORDER OF THE GENERAL COURT (Fourth Chamber)

11June 2020 (*)

(Action for annulment— Energy— Directive (EU) 2018/2001 on the promotion of the use of energy from renewable sources— Limit on biofuels and biomass fuels produced from food and feed crops— Delegated Regulation (EU) 2019/807— Definition of raw materials presenting a high indirect land-use change (ILUC) risk— Palm oil— Standing to bring proceedings— Lack of individual concern— Inadmissibility)

In Case T‑561/19,

Lípidos Santiga, SA, established in Santa Perpètua de Mogoda (Spain), represented by P.Muñiz Fernández, lawyer,

applicant,

v

European Commission, represented by J.-F.Brakeland and Y.Marinova, acting as Agents,

defendant,

APPLICATION under Article263 TFEU seeking the partial annulment of Commission Delegated Regulation (EU) 2019/807 of 13March 2019 supplementing Directive (EU) 2018/2001 of the European Parliament and of the Council as regards the determination of high indirect land-use change-risk feedstock for which a significant expansion of the production area into land with high carbon stock is observed and the certification of low indirect land-use change-risk biofuels, bioliquids and biomass fuels (OJ 2019 L133, p.1),

THE GENERAL COURT (Fourth Chamber),

composed of S.Gervasoni, President, R.Frendo (Rapporteur) and J.Martín y Pérez de Nanclares, Judges,

Registrar: E.Coulon,

makes the following

Order

Background to the dispute

1The applicant, Lípidos Santiga, SA, is a company incorporated under Spanish law, the main activity of which consists in the importation and processing on Spanish territory of various raw materials, including palm oil, intended for the production of biofuels.

2On 23April 2009, the European Parliament and the Council of the European Union adopted Directive 2009/28/EC on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC (OJ 2009 L140, p.16) (‘the REDI’). That directive established the common framework for the promotion of the production of energy from renewable resources by setting, in particular, mandatory national targets in so far as concerns the shares of energy from such sources in the calculation of the gross final consumption of energy. In particular, the directive introduced sustainability criteria to be fulfilled by biofuels and bioliquids in order that these be taken into account in meeting renewable energy targets at both national and Union level. The criteria sought, in particular, to protect land with high biodiversity value or high carbon stock. However, they related solely to the risk of direct impact on the use of land associated with the production of biofuels and bioliquids from food and feed crops.

3On 9September 2015, the REDI was amended by Directive (EU) 2015/1513 of the European Parliament and of the Council of 9September 2015 (OJ 2015 L239, p.1), in particular, in order to take into account the risk of indirect land-use change (‘ILUC’). ILUC arises when pasture or agricultural land previously intended for the food and feed markets is converted for the production of biofuels and bioliquids.

4On 11December 2018, the Parliament and Council adopted Directive (EU) 2018/2001 on the promotion of the use of energy from renewable sources (OJ 2018 L328, p.82) (‘the REDII’). This is a recast of the REDI and fixes a mandatory target for the EU concerning the overall share of energy from renewable sources in the EU’s gross final consumption of energy until 2030.

5Article7 of the REDII lays down a method for calculating the share of energy from renewable sources by taking into account the gross final consumption of electricity from renewable sources, as well as the gross final consumption of energy from renewable sources in, first, the heating and cooling sector and, second, the transport sector.

6Pursuant to Article25(1) of the REDII, in order to mainstream the use of renewable energy in the transport sector, each Member State is to set an obligation on fuel suppliers to ensure that the share of renewable energy within the final consumption of energy in the transport sector is at least 14% by 2030.

7Article26 of the REDII lays down specific rules for biofuels, bioliquids and biomass fuels produced from food and feed crops. The first paragraph of that article refers, inter alia, to the minimum share of 14% of renewable energy in the gross final consumption of energy in the transport sector, laid down in the first subparagraph of Article25(1) of that directive. It provides that, for the calculation of a Member State’s gross final consumption of energy from renewable sources, the share of biofuels and bioliquids, as well as of biomass fuels consumed in transport, where produced from food and feed crops, is to be no more than one percentage point higher than the share of such fuels in the final consumption of energy in the road and rail transport sectors in 2020 in that Member State, with a maximum of 7% of final consumption of energy in those sectors in that Member State.

8However, under Article26(2) of the REDII, for the same calculation, in a given Member State, the share of high indirect land-use change-risk biofuels, bioliquids or biomass fuels produced from food and feed crops (‘biofuels produced from high ILUC-risk feedstock’) for which a significant expansion of the production area into land with high-carbon stock is observed is not to exceed the level of consumption of such fuels in that Member State in 2019, unless they are certified, exceptionally, to be low indirect land-use change-risk biofuels, bioliquids or biomass fuels.

9In others words, Article26(2) of the REDII establishes a threshold over which energy from high ILUC-risk biofuels cannot be included in the total calculation of the consumption of energy from renewable sources in the transport sector, except for biofuels certified to be low indirect land-use change-risk biofuels (‘biofuels produced from low ILUC-risk feedstock’).

10Pursuant to the fourth subparagraph of Article26(2) of the REDII, the European Commission adopted, on 13March 2019, Delegated Regulation (EU) 2019/807 supplementing Directive (EU) 2018/2001 as regards the determination of high indirect land-use change-risk feedstock for which a significant expansion of the production area into land with high carbon stock is observed and the certification of low indirect land-use change-risk biofuels, bioliquids and biomass fuels (OJ 2019 L133, p.1).

11Article3 of Delegated Regulation 2019/807 lays down two cumulative criteria for determining high ILUC-risk feedstock. Such a risk is presented by feedstock for which (i) the average annual expansion of the global production area since 2008 is higher than 1% and affects more than 100000 hectares, and (ii) the share of such expansion into land with high-carbon stock is higher than 10%, in accordance with the mathematical formula set out in that article.

12The application of the criteria laid down in Article3 of Delegated Regulation 2019/807 is based on the information set out in the Annex to that regulation which establishes, for different feedstocks (cereals, sugar crops and oil crops), the mandatory values to be used in the mathematical formula set out in Article3 for the purposes of determining whether a given feedstock is likely to be high ILUC-risk. That annex refers in particular to ‘palm oil’ amongst those oil crops.

13Articles4 and 5 of Delegated Regulation 2019/807 lay down the general criteria for certification of low ILUC-risk biofuels, bioliquids and biomass fuels.

Procedure and forms of order sought

14By application lodged at the Registry of the General Court on 13August 2019, the applicant brought this action.

15By separate document lodged at the Court Registry on 21October 2019, the Commission raised an objection of inadmissibility under Article130 of the Rules of Procedure of the General Court. The applicant submitted its observations on that objection on 23December 2019.

16In its application, the applicant claims that the Court should:

–annul Article3 of and the Annex to Delegated Regulation 2019/807 (‘the contested provisions’);

–order the Commission to pay the costs.

17In its objection of inadmissibility, the Commission contends that the Court should:

–dismiss the action as manifestly inadmissible;

–order the applicant to pay the costs.

18In its observations on the objection of inadmissibility, the applicant claims that the Court should:

–dismiss the objection of inadmissibility;

–declare the action admissible;

–order the Commission to pay the costs.

Law

19Pursuant to Article130(1) and (7) of the Rules of Procedure, the Court may, if the defendant so requests, rule on the question of inadmissibility without considering the merits of the case. In the present case, as the Commission has applied for a decision on inadmissibility, the Court, finding that it has sufficient information from the documents in the case file, has decided to rule on that application without taking further steps in the proceedings.

20In its objection of inadmissibility, the Commission disputes the applicant’s standing to bring proceedings.

21Pursuant to the fourth paragraph of Article263 TFEU, the admissibility of an action brought by natural or legal persons against an act which is not addressed to them is subject to the condition that they be accorded standing to bring proceedings, which arises in two situations. First, such proceedings may be instituted if the act is of direct and individual concern to those persons. Second, they may bring proceedings against a regulatory act not entailing implementing measures if that act is of direct concern to them.

22In the present case, both parties agree that the contested provisions are not of individual concern to the applicant for the purposes of the second sentence of the fourth paragraph of Article263 TFEU. Moreover, the applicant claims to have standing to bring proceedings by virtue of the third phrase of the fourth paragraph of Article263 TFEU, as the contested provisions are of direct concern to it and do not entail any implementing measures.

23In that connection, it is appropriate first to examine the ‘direct concern’ condition. It is settled case-law that this condition requires, first, that the contested measure must directly affect the legal situation of the individual and, second, that it must leave no discretion to the addressees of the measure, who are entrusted with the task of implementing it, such implementation being purely automatic and resulting from the EU rules alone without the application of other intermediate rules (see judgment of 6November 2018, Scuola Elementare Maria Montessori v Commission, Commission v Scuola Elementare Maria Montessori and Commission v Ferracci, C‑622/16P to C‑624/16P, EU:C:2018:873, paragraph42 and the case-law cited).

Whether the applicant’s legal situation is directly affected

24The Commission argues, in essence, that the contested provisions have no effect on the applicant’s legal situation, with the result that, irrespective of any implementing measures, the applicant is not directly concerned by the contested provisions.

25The applicant notes, without being challenged by the Commission on this point, that palm oil is the only feedstock currently to fulfil the cumulative criteria laid down by the contested provisions and, as a consequence, is the only one to be classed as high ILUC-risk.

26Furthermore, the applicant claims that this classification— which is immediately apparent from the contested provisions— leaves no discretion to national authorities, with the result that, in essence, only biofuels produced from palm oil cannot be used in order to meet renewable energy targets as laid down by the REDII. The contested provisions are thus such as directly to affect the applicant’s legal and factual situation in so far as they give rise to a quantitative restriction and a de facto prohibition on the use of palm oil in biofuel production. In the first place, in order to demonstrate that it is directly affected, the applicant alleges a variety of repercussions on the possibilities of selling palm oil which it would suffer as a result of the adoption of the contested provisions. It claims that the contested provisions are such as to give rise to harmful consequences for the legal conditions of the sale of palm oil intended for the production of biofuels at the stages of importation, processing, placement on the market and conclusion of contracts relating to those goods, with the result that those provisions directly and immediately affect the applicant’s legal and factual situation.

27Those arguments cannot succeed.

28As the Commission argues, the consequences to which the applicant refers are not the result of the contested provisions, but rather of the implementing measures which will and shall have to be adopted at national level. The contested provisions are confined solely to defining the criteria which serve to determine which feedstocks are now regarded as high ILUC-risk and in no way directly affect the applicant within the meaning of the case-law cited in paragraph23 above.

29It is clear that the contested provisions were adopted on the basis of Article26(2) of the REDII, which they supplement, and that they form part of the framework for achieving the renewable energy target established by that directive. It follows that, in so far as the contested provisions lay down the criteria for determining high ILUC-risk feedstocks, they are not intended to be applied autonomously and independently, but solely and necessarily in the context of the application of Article26 of the REDII.

30Admittedly, it is true that a consequence of the contested provisions is that palm oil must now be regarded, in the national legal systems of the EU Member States, as a high ILUC-risk feedstock. However, Article26 of the REDII in no way prohibits the use of feedstocks presenting such a risk, but instead confines itself to establishing a progressively reduced limit at national level, in the consumption of energy produced from renewable energy sources, on the share of biofuels and bioliquids, together with biomass fuels used in the transport sector, where these are produced from food and feed crops.

31Within the legal framework established by the REDII and Delegated Regulation 2019/807, it is for each Member State to establish, beforehand, the manner in which it envisages meeting the renewable energy targets laid down in the REDII, which will, accordingly, determine the share of the contribution of energy produced from high ILUC-risk feedstocks that can be taken into account in the calculation of the gross final consumption of energy produced from renewable sources referred to in Article26(2) of the REDII (see, to that effect and by analogy, order of 7July 2014, Group’Hygiène v Commission, T‑202/13, EU:T:2014:664, paragraph37).

32In that connection, it is clear that the limit on the share of biofuels produced from high ILUC-risk feedstocks that can be taken into account in the calculation of the overall national share of energy from renewable sources referred to in Article26(2) of the REDII does not apply directly to the applicant, but is incumbent on the Member States which have the choice as to the composition of their respective energy mixes. In other words, the criteria laid down by the contested provisions must be applied to the Member States in the context of the renewable energy obligations incumbent upon them pursuant to the REDII.

33It follows that, in so far as the effects of the contested provisions will not materialise through EU legislation alone, but rather by the intermediary of rules adopted by the Member States in the context of their renewable energy obligations pursuant to the REDII, it is only measures adopted at national level that can have direct legal effects on the applicant’s legal situation within the meaning of the case-law cited in paragraph 23 above, and not the contested provisions.

34Furthermore, contrary to the argument put forward by the applicant, the fact that palm oil is the only feedstock identified pursuant to the data set out in the annex to the contested regulation as being, irrespective of its country of origin, high ILUC-risk does not restrict economic operators exercising their activity in the sector producing biofuels from that feedstock. The contested provisions do not in fact impose any prohibition or restriction on the sale or importation on the European market of biofuels produced from palm oil.

35In that context, the applicant’s argument that it is directly affected by the contested provisions in that they give rise to an automatic classification of palm oil only as a high ILUC-risk feed stock, with the result that it will not be possible to use biofuels produced from palm oil in order to meet the renewable energy targets laid down in the REDII, cannot succeed. It should be observed, as is apparent from paragraphs8 and 13 above, that Article26(2) of that directive and Articles4 and 5 of Delegated Regulation 2019/807 provide for an exception, under strict and specific conditions, to the limit referred to in paragraph32 above by subtracting biofuels certified as low ILUC-risk from that limit. That exception is also to be implemented, where appropriate, by the Member States.

36In the second place, the applicant cannot successfully rely on its argument that the contested provisions are of direct concern to it in that they do not leave any discretion to the Member States in so far as concerns the classification of palm oil as a high ILUC-risk feedstock. It is, admittedly, true that the contested provisions do not leave any discretion to the Member States as regards that classification. However, the Member States still have discretion as regards the measures to be adopted in order to meet the renewable energy targets laid down by the REDII, even as regards high ILUC-risk feedstocks, such as palm oil, and the possible taking into account of those feedstocks in the calculation referred to in Article26(2) of that directive.

37It is therefore the specific approach taken by the Member States in determining their respective renewable energy strategies at national level and in determining the composition of their respective energy mixes which will have an effect on the level of consumption of palm oil-based biofuels in a given Member State. Consequently, any effects on the applicant’s legal situation do not derive from the contested provisions, but rather from the choice of implementing measures that will be adopted at national level in order to attain the objective pursued by the REDII (see, to that effect, order of 7July 2014, Group’Hygiène v Commission, T‑202/13, EU:T:2014:664, paragraph43).

38In particular, the Member States are free to adopt those measures that they consider to be the best adapted to achieving, in the specific context of the national energy market, the results prescribed by the REDII, without the level of any consumption of biofuels produced from palm oil on their respective territories necessarily being affected by the contested provisions.

39In that connection, first, it should be noted that, as the Commission rightly observes, there is nothing to prevent the Member States from continuing to support— subject to compliance with strict and specific conditions— palm oil-based biofuels by virtue of the exception provided for in Article26(2) of the REDII and Article4 of Delegated Regulation 2019/807 as regards the share of energy produced from renewable sources. The possibility for national authorities to certify, exceptionally, biofuels produced from low ILUC-risk feedstocks is such as to characterise the existence of a discretion on their part, with the result that the implementation of the contested provisions cannot be regarded as purely automatic and not leaving any discretion to the Member States.

40As regards the applicant’s argument that the case-law recognises that any person may bring proceedings against a general rule that affects him or her directly, even if there are exceptions to that rule, it is sufficient to observe that the facts of the case giving rise to the order of 6September 2011, Inuit Tapiriit Kanatami and Others v Parliament and Council (T‑18/10, EU:T:2011:419), on which the applicant relies, differ from those of the present case. The case that gave rise to that order related to a direct prohibition on the importation and sale of goods marketed by the applicants, which is not so in the case in point, as stated in paragraph34 above.

41Second, it should be observed that the limit laid down in Article26(2) of the REDII relates solely to consumption in the transport sector of biofuels produced from high ILUC-risk feedstocks. However, in the calculation laid down in Article7 of the REDII, that limit does not apply to those shares of the gross final consumption of energy from renewable sources in the gross final consumption of electricity or to that in the heating and cooling sector.

42Third, it should be pointed out that the REDII establishes the mandatory target to be met by the Member States by 2030 of producing 32% of energy from renewable sources. As regards the remaining share of energy produced by the Member States, they are free to produce that from their choice of sources, namely either non-renewable energy sources such as oil or coal, or high ILUC-risk renewable sources such as, in particular, biofuels produced from palm oil.

43It follows that the contested provisions, as well Article26(2) of the REDII that they supplement, leave it to the Member States to choose the most appropriate system for meeting the renewable energy targets in accordance with their specific situation, energy mix and capacities to produce renewable energy without those measures constituting a prohibition or an automatic restriction on the use of biofuels produced from palm oil, as the applicant claims.

Whether the applicant’s factual situation is affected

44As regards the argument put forward by the applicant, alleging repercussions of the contested provisions on its economic situation, in that they limit the possibilities which it has to import, process and place on the market the palm oil intended, in particular, for the production of biofuels, it should be noted that such economic consequences do not affect its legal situation, but only its factual situation (see order of 9November 2016, Biofa v Commission, T‑746/15, EU:T:2016:658, paragraph37 and the case-law cited).

45In that connection, it has already been held that the mere fact that a measure may exercise an influence on an applicant’s substantive position cannot suffice to allow it to be regarded as directly concerned by the measure (see order of 9November 2016, Biofa v Commission, T‑746/15, EU:T:2016:658, paragraph38 and the case-law cited).

46Nonetheless, the applicant argues that the case-law should, in its view, be interpreted as finding actions for annulment brought by private individuals against EU measures— the effects of which are purely material— admissible in certain circumstances. However, it should be observed that, in paragraph50 of the judgment of 6November 2018, Scuola Elementare Maria Montessori v Commission, Commission v Scuola Elementare Maria Montessori and Commission v Ferracci (C‑622/16P to C‑624/16P, EU:C:2018:873)— on which the applicant’s argument is based, inter alia— the Court, in giving judgment on State aid, stressed the fact that the contested decision was liable to place the parties concerned in an unfavourable competitive position and, consequently, that that decision directly affected their legal situation, in particular their right not to be subject in that market to competition distorted by the measures in question.

47In any event, assuming, as the applicant argues, that it is appropriate to take into account not only the effects of any EU measure on the applicant’s legal position, but also the factual effects on the applicant’s factual position, the fact remains that, in order to be taken into consideration, such effects must be more than merely indirect (see, to that effect, judgment of 13September 2018, Gazprom Neft v Council, T‑735/14 and T‑799/14, EU:T:2018:548, paragraph97). As is apparent, in particular, from paragraphs33 and 34 above, the contested provisions do not produce direct effects on the import, processing and sale of the palm oil marketed by the applicant.

48In the light of the foregoing, it must be found that the applicant is not directly concerned by the contested provisions and therefore does not have standing to bring proceedings against them within the meaning of Article263 TFEU before the EU Courts.

49In that context, it is not necessary to give judgment on the question whether the contested provisions constitute a regulatory act which does not entail implementation measures within the meaning of the final phrase of the fourth paragraph of Article263 TFEU.

50Lastly, it is also appropriate to recall that, where the implementation of EU acts is a matter for the Member States, as in the present case, natural or legal persons who do not have standing to bring proceedings within the meaning of Article263 TFEU may plead the invalidity of the European Union act at issue before the national courts and tribunals and cause the latter to request a preliminary ruling from the Court of Justice, pursuant to Article267 TFEU (judgment of 3October 2013, Inuit Tapiriit Kanatami and Others v Parliament and Council, C‑583/11P, EU:C:2013:625, paragraph93).

51Consequently, the objection of inadmissibility raised by the Commission must be upheld and the action dismissed as inadmissible.

Costs

52Under Article134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.

53In the present case, since the applicant has been unsuccessful, it must be ordered to bear its own costs and to pay those of the Commission in accordance with the latter’s pleadings.

On those grounds,

THE GENERAL COURT (Fourth Chamber)

hereby orders:

1.The action is dismissed as inadmissible.

2.Lípidos Santiga, SA, is ordered to pay the costs.

Luxembourg, 11June 2020.

*Language of the case: English.