ECJ ruling on cross-sectoral correction factor

Emissions Trading System
28 April 2016


On 28 April the European Court of Justice declared invalid the maximum annual amount of free allowances for GHG determined by the Commission for the period 2013-2020.


The Court found that the ceiling used by the European Commission (EC) to determine the value of the cross-sectoral correction factor (CSCF) was too high, as the EC was required to refer only to the emissions of the installations included in the Community system from 2013 onwards. Consequently the Court deemed the CSCF invalid (Commission Decision 2013/448, Art. 4 and Annex 2).


The case was brought to the Court by companies that claimed they have received fewer allowances than they were entitled to (C-191/14 - Borealis Polyolefine).


The ruling will take effect after the EC recalculates the CSCF (with a deadline of 10 months) and will lead to the reduction of the total number of free allocations for industrial installations in the final years of the EU ETS phase III.


Read the ECJ press release.