Poland plans lawsuit against EU over MSR

Published 15:51 on December 30, 2015  /  Last updated at 14:05 on January 1, 2016  /  EMEA, EU ETS  /  No Comments

Poland is to bring a case before the European Court of Justice (ECJ) seeking to annul the EU's decision to introduce the Market Stability Reserve, the government said on Wednesday after its cabinet agreed the move.

Poland is to bring a case before the European Court of Justice (ECJ) seeking to annul the EU’s decision to introduce the Market Stability Reserve, the government said on Wednesday after its cabinet agreed the move.

A government statement said that because the MSR starts in 2019, this violates “the principle of loyal cooperation by adopting measures conflicting with the conclusions of the European Council in 2014”.

It said the decision also prevents legal certainty over the current 2013-2020 EU ETS trading period and goes against the EU principle of proportionality by adopting measures leading to the implementation of emission cut targets higher than the bloc’s international commitments.

The MSR was given its final stamp of approval in Sep. 2015, though in a rare instance of the EU legislative process the Council of Member States did not adopt it by consensus. Instead, it was required to be passed under Qualified Majority Voting.

At least six nations are understood to have voted against the measure – Poland, Bulgaria, Romania, Croatia and Hungary and Cyprus – having objected to its start date of 2019 rather than the 2021 date originally proposed by the European Commission.

Poland led a blocking minority of mainly eastern European states that opposed an earlier start to the MSR, but the faction saw cracks after the Czech Republic and Lithuania defected to the western EU camp.

It remains to be seen whether those governments that voted against the MSR will support Poland’s lawsuit.

Poland’s officials discussed the legal case with their counterparts from the objecting nations on the sidelines of the UN climate negotiations in Paris earlier this month.

Sources told Carbon Pulse that the discussions gained little traction as officials were focused on the two-week talks.

EU PROCESS

Cases before the ECJ, the EU’s highest court, tend to drag on for years.  Lawsuits brought by eight eastern member states over their ETS Phase 2 (2008-2012) allocations were only fully resolved in 2013 after a six-year legal battle.

Poland’s case looks set to address the nature of the overarching political agreements made by EU leaders at the European Council versus the legislative procedures made to implement those agreements.

The EU’s overall emission reduction targets have been agreed unanimously.  The 2020 target was decided at a European Council meeting in 2007, while the 2030 energy and climate goals were agreed in Oct. 2014.

The European Commission proposed both the Backloading and MSR reforms independently of Council agreements on the basis that because ETS emission allowances would be merely withheld from sale rather than cancelled, this did not affect the overall targets.

By Ben Garside – ben@carbon-pulse.com

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