Europe News

 EU court throws out ArcelorMittal's emissions challenge

Mar 2, 2010, 11:27 GMT

   Luxembourg - The European Union's central court on Tuesday threw out a challenge by steelmaking titan ArcelorMittal to the EU's scheme for forcing industries to pay for their greenhouse-gas emissions, saying that the EU's rules were fair.

   The EU's emissions trading scheme (ETS) is the key plank of the bloc's bid to fight global warming. It is designed to reward industries which reduce emissions and penalize those which do not by forcing all industrial plants to buy emissions permits.

   ArcelorMittal, the world's biggest steel producer, had called for the ETS to be annulled and demanded damages for the costs it imposed, arguing that the scheme targeted the company unfairly. Steel-making is one of the most emissions-intensive industries in the world.

The challenge to the scheme, which was set up in 2005, also accused the EU of breaching founding principles such as the freedom of establishment, the right to property and the right to legal certainty.

But the EU's General Court - its lower house - 'dismisses the action for annulment as inadmissible' and rejects Arcelor's claim for damages, arguing that the ETS did not target ArcelorMittal in particular, the court said in a statement.

   'Arcelor is neither individually nor directly concerned by the directive,' the court said, using the name the company carried until its merger with Mittal in 2006, and under which it brought the case.

'The directive applies, in a general and abstract manner, to all of the operators covered by the annex thereto,' the statement said.

The ETS cannot be seen as discriminating against one particular company because it 'is not capable of characterising the factual and legal situation of Arcelor in comparison with those other operators,' the statement said.

Arcelor's claim for damages also failed to impress EU judges.

'Arcelor has not shown that, in adopting the directive, the (EU) legislature committed a sufficiently serious breach of the right of property, the freedom to pursue an economic activity ... or the principle of legal certainty to give rise to non-contractual liability on the part of the (EU),' the court ruled.

In a brief statement reacting to the judgement, ArcelorMittal said that it 'took note' of the ruling but 'remained concerned' about the impact of the ETS on its business.

'The European trading system might put an excessive strain on the EU steel industry's competitiveness and threaten steelmaking jobs. This issue will need to be addressed especially with regards to the third trading period of the ETS which starts in 2012,' it said.

EU politicians have long warned that the ETS could make the bloc less competitive against heavy industrial producers from areas with less strict climate controls.

EU policy-makers have proposed a number of possible responses, ranging from giving free permits to threatened branches of industry to setting up import taxes on goods from countries without adequate climate legislation.