The European Steel Association (EUROFER) has announced that the Luxembourg-based European Court of Justice has declared inadmissible EUROFER's court case for the annulment of the European Commission Decision of April 27, 2011 on the rules for free allocation of emission allowances for industries covered by the EU Emissions Trading Directive.
The decision does not mean that the steel benchmarks set by the Commission are correct. The Court suggests that a complaint on the allocation of allowances (which are based on the benchmarks) has to be judged by a national court after allocation of certificates on national level. Only after a judgment by a national court, the case may be taken to the European Court. Accordingly, the steelmakers will seek national ruling regarding the free carbon allowances.
According to EUROFER, in principle this means that the European steel industry will not have certainty before the coming into force of the directive on January 1, 2013 and during the first years of the third trading period. The allocation of free allowances will now be implemented according to the benchmarks set by the Commission. However, if a court case on national level is successful, the Commission may have to change its benchmarks retroactively.
As SteelOrbis previously reported, EUROFER earlier stated that the benchmark that will allow the top 10 performers of the industry to get free allowances is set unfairly by the Commission. The benchmark set for hot metal is at a technically unachievable level. "Nowhere in the world is a steelworks that could operate its plants at the level of this benchmark," said Gordon Moffat, EUROFER's director general.