The European Court of Justice (ECJ) ruled on 8 September 2011 (in C-279/08P) that a Dutch scheme to assist large industrial undertakings manage their nitrogen oxide emissions through a trading scheme involved state aid.
The Netherlands established its nitrogen oxide emissions scheme in response to EU environment legislation, adopted in 2001, which requires member states to establish national emission ceilings for certain pollutants including nitrogen oxide. The contested element of this scheme related to allegations by the Commission that the scheme selectively favoured certain large industrial undertakings and that this advantage amounted to state aid.
The ECJ found that the scheme allowed large undertakings engaged in cross-border trade an option not offered to other companies: the ability to convert the economic value of emission reductions into tradable emissions allowances, and allowed them to buy emission allowances from other companies without penalties being imposed. The ECJ confirmed the Commission’s view that these undertakings enjoyed a selective advantage. In addition, the allowances, which were given the character of tradable intangible assets, were made available free of charge, rather than being sold or auctioned. Consequently, the ECJ concluded that the Netherlands had foregone public resources in providing this selective advantage to the undertakings concerned.