Lessons for Theory and Practice
New Horizons in Environmental and Energy Law series
Edited by Michael Faure and Marjan Peeters
Chapter 6: EU Greenhouse Gas Emissions Trading and Competition Law
Stefan Weishaar INTRODUCTION This chapter addresses Competition law issues that arise under the European Emissions Trading System (EU ETS). Where appropriate, comments on the proposed amendment of Directive 2003/87/EC1 that emphasizes auctioning and benchmarking are made. Pursuant to the proposal of the European Commission, sectors exposed to strong international competition and that give rise to carbon leakage will benefit from free allocation. Sectors other then electricity – electricity will in principle not benefit from any free allocation2 – will be subject to ever more auctioning.3 A transitory rule envisages a partial free allocation of 80% of the average measured emissions during the period 2005–2007. The free allocation is reduced annually by equal amounts so that by 2020 free allocation will have completely faded out in these sectors.4 Undue interventions by Member States are largely foreclosed through the application of the four freedoms, while EC Competition law (Articles 81 and 82 EC Treaty) is geared to the prevention of competitive distortions arising in particular from undue behaviour of firms. Not prejudicing the application of the four freedoms, Member States’ involvement in practices that distort competition between undertakings is addressed through the application of EU Competition law rules. There are two main alleys in which unduly distorting State measures taken within the EU ETS framework can be contained. Firstly, through the joint application of Articles 3(g), 10(2), 81 and 82 EC Treaty which was developed by the ECJ upon recognition that State measures can COM(2008)16 final of 23.01.2008. See...
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