The EU ETS and the role of the courts: Emerging contours in the case of Arcelor

Abstract

This article presents an in-depth examination of how one of the EU’s courts has assessed a foundational claim against the EU ETS. It concerns the Arcelor case, in which a large steel company filed an application before the General Court of the EU requesting the partial annulment of the European legislation establishing the EU ETS and claiming damages. The industry lost the case, but the considerations of the court offer a valuable contribution to the much-needed broader discussion about the proper design of legislative frameworks for trading greenhouse gas emissions rights. In particular, the court provided an interesting discussion on the principle of equal treatment, the cancellation of allowances in the case of the closure of an installation, and the need for price regulation. However, some shortcomings in the court’s decision are evident. The article concludes by observing that, besides the interest in examining what the actual case law means for the specific design and application of emissions-trading schemes like the EU ETS, it is equally important to examine the ways in which courts succeed in assessing claims about this complicated regulatory instrument.