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EU court dismisses challenge to emissions trading rules

[JURIST] The General Court of the EU [official website] on Tuesday rejected [judgment; press release, PDF] a challenge to the EU's Emissions Trading Directive [text] brought by Luxembourg-based Arcelor [website], the world's largest steel producer. The company sought both the annulment of certain articles of the directive and damages for the harm suffered as a result of the adoption of the directive. It argued that several principles of community law were violated by certain provisions of the directive, including the right of property, the freedom to pursue an economic activity, the principle of equal treatment, freedom of establishment, and the principle of legal certainty. The General Court rejected Arcelor's claim that the directive led to an unequal treatment of operators, noting that the directive applies in a general and abstract manner to all operators. Regarding the application for damages, the court held that Arcelor had failed to prove the breach of the aforementioned principles.

Under the EU emissions regulation scheme, based on community obligations under the UN Framework Convention on Climate Change [text] and the Kyoto Protocol [text; JURIST news archive], member states set thresholds on the quantity of emissions produced each year and allocate allowances to national producers. The Emissions Trading Directive was adopted in 2003 to encourage operators to reduce their greenhouse gas emissions, by allowing them to sell their surplus allowances to other operators.

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