Eight of the new EU Member States have threatened the European Commission with legal action in relation to its decision to reduce the amount of carbon allowances allocated to certain companies under the EU Emissions Trading Scheme (ETS). The eight EU Member States concerned are the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland and Slovakia. These Member States argue that the strict limits imposed by the Commission are disproportionately low and will hamper their industries’ ability to remain competitive with the rest of the European Union. If the European Court of Justice rules in favour of these Member States, changes will almost certainly have to be made to the ETS. The ETS was already seriously criticised during its first 2005 to 2007 phase because of governments over-estimating the amount of pollution credits required by their industries. The objections raised by the new Member States come before a debate this autumn over how the European Union should share the burden of cutting CO2 emissions by 20 per cent by 2020 as set out in the EU Energy Plan of March 2007.