Poland loses ETS allocation battle

ECJ says that European Commission’s ETS allocation method was fair.

The method in which the European Commission awarded free permits as part of the emissions trading scheme (ETS) was fair, the European Court of Justice ruled today.

Poland had challenged the Commission’s method of allocating the free permits – so-called ‘benchmarks’ – saying that it did not take into account fuel-usage patterns.

Poland also said that the method of allocation affected a country’s right to determine its own energy mix.

But the court rejected Poland’s argument that the ETS allocation method would hit the competitiveness of firms in member states that rely heavily on coal.

The court said that the ETS directive “leaves the member states a margin of manoeuvre to adopt financial measures in favour of sectors and sub-sectors that have a significant risk of carbon leakage due to the costs of greenhouse-gas emissions and to provide for the allocation of free  allowances to installations in those sectors and sub-sectors”.