The European Court of First Instance (CFI) has ruled that the German rules on ex-post reduction of emissions allowances granted to installations covered by the EU Emissions Trading Scheme (ETS) are compatible with EU rules. Under the ETS, Germany determined the total amount of allowances and their allocation to the different installations in Germany for the period 2005 to 2007. The German rules required the withdrawal of allowances in a limited number of cases where the amount of the allowances became disproportionate to the actual emissions. According to the Commission, however, Germany had no right to adopt such ex-post adjustments because they would dissuade installations from reducing the volume of their emissions. The CFI analysed the ETS rules and concluded that they do not preclude Germany from applying the ex-post adjustments in question and that these adjustments would not prejudice the objectives of the ETS.