Address https://gelex.eu/eli/EU/decision/2017/126@2017-01-24/en

Contents

1. Preamble
2. 1. Article 1
3. Article 1
4. 1.
   1. Article 4
5. 1. Article 1
   2. Article 2
6. ANNEX
7. ANNEX
8. ANNEX II

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC, and in particular Article 10a(5) thereof,

Having regard to Commission Decision 2011/278/EU of 27 April 2011 determining transitional Union-wide rules for harmonised free allocation of emission allowances pursuant to Article 10a of Directive 2003/87/EC of the European Parliament and of the Council and in particular Article 15(3) thereof,

Whereas:

(1) Article 10a(5) of Directive 2003/87/EC sets a maximum annual amount of allowances constituting the basis for calculating allocations free of charge to installations not covered by Article 10a(3) of Directive 2003/87/EC. This amount is the sum of two elements respectively described in points (a) and (b) of Article 10a(5) of Directive 2003/87/EC.

(2) In order to ensure that this maximum annual amount of allowances is not exceeded, a cross-sectoral correction factor is applied if necessary, reducing in a uniform manner the allocations for all installations eligible to receive free allowances.

(3) In accordance with Article 15(3) of Decision 2011/278/EU, the Commission determines the cross-sectoral correction factor by comparing the limit set by Article 10a(5) of Directive 2003/87/EC with the sum of the preliminary total annual amounts of free allocations for all installations covered by Directive 2003/87/EC in the territory of Member States.

(4) The Commission determined in Decision 2013/448/EU a uniform cross-sectoral correction factor, presented in Article 4 thereof and Annex II thereto.

(5) The Court of Justice in its judgment of 28 April 2016 regarding the joint cases C-191/14, C-192/14, C-295/14, C-389/14 and C-391/14 to C-393/14 found that the Commission, when establishing the maximum annual amount of allowances in accordance with point (b) of Article 10a(5) of Directive 2003/87/EC should not have taken into account emissions resulting from the activities listed in Annex I to Directive 2003/87/EC as from 2013 in so far as those emissions were generated by installations covered by the emissions trading system prior to that date. As a consequence, the Court concluded that the Commission did not determine the maximum annual amount of allowances in accordance with the requirements of point (b) of Article 10a(5) of Directive 2003/87/EC and that the uniform cross-correction factor laid down in Article 4 of, and Annex II to Decision 2013/448/EU was also contrary to that provision. Article 4 of and Annex II to Decision 2013/448/EU were thus invalidated by the Court.

(6) In order to implement this judgment, the Commission is required to recalculate the maximum annual amount of allowances for installations eligible to receive allocations free of charge with respect to the requirements of point (b) of Article 10a(5) of Directive 2003/87/EC and as a consequence, the uniform cross-sectoral correction factor is to be amended accordingly.

(7) The recalculation of the amount of allowances referred to in Article 10a(5) point (b) of Directive 2003/87/EC was carried out following the same methodology, using the same data as for the initial calculation in 2013. In line with the Court's judgment, whereas the Commission had initially considered emissions generated by installations covered by the EU ETS before 1 January 2013 resulting from the activities listed in Annex I to Directive 2003/87/EC only as from 2013, these had to be removed from the calculation of the maximum annual amount of allowances as defined by Article 10a(5) of Directive 2003/87/EC.

(8) The Commission used as starting point the initial official submissions from Member States. The Commission then consulted Member States on their submission of emissions data and whenever necessary, requested additional clarifications. In accordance with Article 10a(5), only installations for which verified emissions were submitted by the Member States were taken into account.

(9) The Commission then removed installations from the calculation where they carried out activities covered by Directive 2003/87/EC only as from 2013 but were already part of the emissions trading system before 2013. Emissions from installations which had been opted-in by Member States in accordance with Article 24 of Directive 2003/87/EC prior to 2013 were removed as well.

(10) Installations affected between the date of the initial data collection and 2013, either by structural changes such as mergers, splits or closures or by technical changes so that they no longer met the relevant thresholds set out in Annex I to Directive 2003/87/EC were still taken into account in the recalculation exercise as these changes could not have been anticipated at the date of the data collection. Installations excluded from the system pursuant to Article 27 of Directive 2003/87/EC were also taken into account in the recalculation for the same reason.

(11) Changes correcting mistakes in Member States' National Implementing Measures for the period 2013-2020 and implemented by end 2016 were taken into account in the recalculation exercise, because the correct values should have been in place already at the time of the original calculation of the cross-sectoral correction factor.

(12) In its judgment of 28 April 2016, the Court explicitly limited the temporal effects of the declaration of invalidity of Article 4 of and Annex II to Decision 2013/448/EU, so that, first, the judgment does not produce effects until 10 months following the date of the delivery of this judgment. The cross-sectoral correction factor laid down in Decision 2013/448/EU is thus invalid as of 1 March 2017. Second, measures adopted until that date on the basis of the invalidated provisions cannot be called into question.

(13) In accordance with the judgment of the Court stressing the overriding considerations of legal certainty, measures by Member States on allocations of allowances for the period 2013-2020 and any subsequent changes and additions to these taken until the entry into force of this decision remain valid. The cross-sectoral correction factor determined in this Decision is to be applied in decisions adopted as of 1 March 2017 creating or modifying allocation entitlements and involving for their determination the application of the cross-sectoral correction factor,

HAS ADOPTED THIS DECISION:

Article 1

Decision 2013/448/EU is hereby amended as follows:

1. Article 4 shall be replaced by the following:

Article 1

1.

Article 4

The uniform cross-sectoral correction factor referred to in Article 10a(5) of Directive 2003/87/EC and determined in accordance with Article 15(3) of Decision 2011/278/EU is set out in Annex II to this Decision.

Article 1

2. Annex II shall be replaced by the text appearing in the Annex to this Decision.

Article 2

This Decision shall enter into force on 1 March 2017.

Done at Brussels, 24 January 2017. For the Commission The President Jean-Claude Juncker

ANNEX

ANNEX

Annex II to Decision 2013/448/EU shall be replaced by the following:

ANNEX II

The cross-sectoral correction factor values applying to allocations free of charge to installations not covered by Article 10a(3) of Directive 2003/87/EC for the years 2013-2020 are the following: Year Cross-sectoral correction factor 2013 89,207101 % 2014 87,657727 % 2015 86,090119 % 2016 84,506152 % 2017 82,905108 % 2018 81,288476 % 2019 79,651677 % 2020 78,009186 %

Versions

1. 2017-01-24

Cited by

• Council Decision (EU) 2019/2106 of 21 November 2019 on the position to be taken, on behalf of the European Union, within the Joint Committee established by the Agreement between the European Union and the Swiss Confederation on the linking of their greenhouse gas emissions trading systems, as regards the amendment of Annexes I and II to the Agreement Decision · Grade B

  Commission Decision (EU) 2017/126 of 24 January 2017 amending Decision 2013/448/EU as regards the establishment of a uniform cross-sectoral correction factor in accordance with Article 10a of Directive 2003/87/EC of the European Parliament and of the Council

• Request for a preliminary ruling from the Bundesverwaltungsgericht (Germany) lodged on 26 February 2019 — Spenner GmbH & Co. KG v Bundesrepublik Deutschland (Case C-189/19) Notice · Grade B

  Is Commission Decision (EU) 2017/126 of 24 January 2017 amending Decision 2013/448/EU as regards the establishment of a uniform cross-sectoral factor in accordance with Article 10a of Directive 2003/87/EC of the European Parliament and of the Council to be interpreted as meaning that the cross-sectoral correction factor for allocations made before 1 March 2017 is to be applied to the years 2013-2020 in the form in which it appears in the original version of Article 4 of, and Annex II to, Decision 2013/448/EU, and, in the case of additional allocations of emission entitlements granted by judici

• Judgment of the Court (Sixth Chamber) 17 May 2018 Judgment · Grade B

  This request for a preliminary ruling concerns the interpretation of Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC (OJ 2003 L 275, p. 32), as amended by Directive 2009/29/EC of the European Parliament and of the Council of 23 April 2009 (OJ 2009 L 140, p. 63) (Directive 2003/87), of Commission Decision 2011/278/EU of 27 April 2011 determining transitional Union-wide rules for harmonised free allocation of emission allowances pu

• Request for a preliminary ruling from the Verwaltungsgericht Berlin (Germany) lodged on 2 May 2017 — Evonik Degussa GmbH v Bundesrepublik Deutschland (Case C-229/17) Notice · Grade B

  the cross-sectoral correction factor provided for in Article 4 of, and Annex II to, Decision 2013/448/EU, in the version of Decision 2017/126/EU, applicable after 1 March 2017, is applicable to additional allocations for the years 2018 to 2020 that were/are awarded by judicial decision after 1 March 2017?

• Judgment of the Court (Sixth Chamber) 14 May 2020 Judgment · Grade B

  This request for a preliminary ruling concerns the interpretation of Article 9(1) and (9) of Commission Decision 2011/278/EU of 27 April 2011 determining transitional Union-wide rules for harmonised free allocation of emission allowances pursuant to Article 10a of Directive 2003/87/EC of the European Parliament and of the Council (OJ 2011 L 130, p. 1) and Article 1 of Commission Decision (EU) 2017/126 of 24 January 2017 amending Decision 2013/448/EU as regards the establishment of a uniform cross-sectoral correction factor in accordance with Article 10a of Directive 2003/87/EC of the European

• Judgment of the Court (Sixth Chamber) 14 May 2020 Judgment · Grade B

  Article 4 of Commission Decision 2013/448/EU of 5 September 2013 concerning national implementation measures for the transitional free allocation of greenhouse gas emission allowances in accordance with Article 11(3) of Directive 2003/87/EC of the European Parliament and of the Council (OJ 2013 L 240, p. 27) was, before its amendment by Decision 2017/126, worded as follows: The uniform cross-sectoral correction factor referred to in Article 10a(5) of Directive 2003/87/EC and determined in accordance with Article 15(3) of Decision 2011/278/EU is set out in Annex II to this Decision.

• Judgment of the Court (Sixth Chamber) 14 May 2020 Judgment · Grade B

  The annex to Decision 2017/126 contains a table for determining the cross-sectoral correction factor for each year of the period from 2013 to 2020, which replaces the table in Annex II to Decision 2013/448.

• Judgment of the Court (Sixth Chamber) 14 May 2020 Judgment · Grade B

  Decision 2017/126

• Judgment of the Court (Sixth Chamber) 14 May 2020 Judgment · Grade B

  Moreover, if, on the basis of the Court’s answers, Spenner’s action is upheld, it will be necessary to determine the quantity of additional emission allowances to be allocated to Spenner and to apply, in that context, the cross-sectoral correction factor. Initially, the cross-sectoral correction factor was established by the European Commission in Article 4 of, and Annex II to, Decision 2013/448. In its judgment of 28 April 2016, Borealis Polyolefine and Others (C‑191/14, C‑192/14, C‑295/14, C‑389/14 and C‑391/14 to C‑393/14, EU:C:2016:311), the Court held that those provisions of Decision 201

• Judgment of the Court (Sixth Chamber) 14 May 2020 Judgment · Grade B

  The Bundesverwaltungsgericht (Federal Administrative Court) considers that it follows from Decision 2017/126 that, for allocations made before 1 March 2017, the cross-sectoral correction factor defined in the original version of Decision 2013/448 applies. However, there remains unanswered the question whether, with respect to additional emission allowances granted by a court from that date, the cross-sectoral correction factor established in Decision 2017/126 should be applied to all additional allocations or only to those relating to the years 2018 to 2020.