EU Emission Permits Ruled Too Generous

Europe’s emissions trading system (ETS) has given industrial firms operating in Europe too many free greenhouse gas emissions permits, Juliane Kokott, an advocate general for the European Court of Justice, has determined. Ironically, the case was brought to court by companies including Dow Chemical, ExxonMobil, and Shell, who claimed that ETS permits to industry are not generous enough. “The free allocations were not too low, but too high,” Kokott told the court. The case relates to free allocations from 2013 through 2020. The court is not bound to follow the advocate general’s advice, but usually does so. Kokott has advised the European Commission, which operates the ETS, to adjust free permit levels downward within one year. She also has recommended that adjustments should not be retrospective. The decision “will raise many concerns” among energy-intensive manufacturers operating across Europe, according to Howard Chase, head of government affairs for Dow Europe. The case could have major implications for the European Commission’s plan to give away 6 billion permits to companies between 2021 and 2030, experts say.