Europe has right to curb CO2 permits supply, ClientEarth says
2 July 2012
Thirteen of Europe’s biggest companies, including German utilities giant EON AG and Royal Dutch Shell, have used ClientEarth legal advice to argue that the European Union should delay sales of carbon permits. The companies’ position was reported in the Bloomberg News article “Europe Has Right to Curb CO2 Permits Supply, ClientEarth Says”. Bloomberg had obtained a letter from the companies addressed to EU Regulators.
The European Commission has been considering postponing sales of carbon permits in the third phase of the Emissions Trading System (ETS) in order to meet its objective of reducing carbon emissions. Energy companies that opposed such a move hired a German law firm (Luther) to show that this was illegal.
Bloomberg explained that, contrary to Luther’s position, our legal analysis identified that the law expressly empowers the Commission to determine the timing of the auction of allowances. We also pointed out a previous ruling by the European Court of Justice which supported the mandate of the Commission to take measures to maintain the effectiveness of the ETS. This opinion follows earlier work in which we analysed lawful options for tightening the ETS cap available to the Commission.
To read our legal opinion, click here