* Commission welcomes the decision
* Eurofer says has option to take case to a national court
(Adds background, comment)
By Barbara Lewis
BRUSSELS, June 7 European steelmakers said the
European Union's top court had thrown out their case seeking to
change the rules on free carbon allowances in the next phase of
the Emissions Trading Scheme (ETS).
Steel industry body Eurofer confirmed the case had been
declared inadmissible by the Luxembourg-based European Court of
"We knew it was possible because of the ... rules for going
to the court," Eurofer Director for Public Affairs Axel Eggert
Eurofer launched the case in July last year, challenging the
regime that determines how many permits to pollute that
steelmakers will get for free in the next phase of the ETS
beginning in 2013.
It said the rules did not set a fair benchmark for allowing
the industry's most efficient 10 percent of factories to get all
their pollution permits at no cost.
"There is no steel company that would get all its allowances
for free, because the benchmark is so low," Eggert said.
He added that steelmakers still had the option to take the
case to a national court.
A spokesman for the European Court of Justice said he could
not comment on the status of the case but the court would
publish its decision once all parties were notified.
"Of course the Commission is satisfied that the European
Court of Justice sided with us," Commission spokesman Isaac
Valero-Ladron said. "It is very positive to see that our solid
Under the pressure of oversupply following economic
slowdown, allowances on the EU ETS have collapsed to record lows
below 7 euros a tonne, far below the roughly 20 to 50
euros analysts have said is necessary to stimulate low carbon
The market did not respond to news of the court case.
"Whatever the outcome the case would have been, the overall
cap for Phase 3 (2013-2020) is already set in stone and will not
change," Isabelle Curien, a carbon analyst at Deutsche Bank,
"It would only change the volume of allowances to be bought
at auctions by installations in the sector, so I would not see a
noticeable impact on prices."
For now, steelmakers are given their allowances, but from
the next phase of the ETS in 2013, far fewer will be handed out.
Steelmakers' permit allocations will be based on an
efficiency index - generally a value reflecting the average
greenhouse gas performance of the 10 percent most efficient
Heavy industry, already suffering from economic downturn,
has said increased costs resulting from the ETS could drive it
out of Europe and result in carbon leakage, rather than reduced
Those considered vulnerable to carbon leakage, such as the
steel and aluminium sectors, will be given help with the
transition, the Commission has said.
(Additional reporting by Jeffrey Coelho in London, editing by