E u r o p e a n d E u r a s i a 1 4 European Union Law L u d w i g K r ä m e r ( A ) I n t r o d u c t i o n Th e European Union legal system 1 4 . 0 1 Th e European Union (‘EU’) is a regional integration organisation consisting at present of twenty-seven European Member States that have transferred part of their sovereignty to the EU. Th e EU is based on international treaties – the Treaty on European Union (‘TEU’) and the Treaty on the Functioning of the European Union (‘TFEU’) – and its power to act is laid down in the various provisions of these treaties; there is no ‘common law’ applicable to it. In this regard, the EU is similar to a civil law country. 1 4 . 0 2 A n u m b e r o f s p e c i fi c features distinguish the EU from traditional international organisations. First, the TEU and TFEU address not only the relations between the Member States and the EU insti- tutions, but also establish rights and obligations for individuals. Second, though legislative decisions in climate change matters are taken by majority vote in the European Parliament – whose members are directly elected – and the Council, which consists of the governments of the twenty-seven Member States, the adop- tion of legislation on climate change is only possible on the basis of a proposal by the European Commission. Th e Commission oversees the application of EU law in the Member States, and has the duty to act in the general interest of the EU rather than in the interest of the individual Member States. 1 4 . 0 3 Th e Court of Justice of the EU, consisting of a General Court (‘GC’) (formerly the Court of First Instance) and the European Court of Justice (‘ECJ’), has the duty to ensure the correct applica- tion of EU law. Its judgments are binding on all public authorities, both at EU and at Member State level. When a question of EU law 351 352 Ludwig Krämer becomes relevant in a case before a national court, that court may ask the European Court for an interpretation, and where there is no judicial remedy under national law against a decision of the national court, that court is obliged to make a request to the ECJ for an interpretation of the relevant EU law provision. 1 4 . 0 4 Th e competence to adopt environmental legislation, including legislation on climate change, is shared between the EU and the Member States. When EU legislation is adopted, Member States are not only obliged to implement it, but they must not adopt pro- visions or practices that contradict EU provisions, though in the case of legislation based in the environmental provisions of the TFEU they may maintain or introduce more stringent national provisions than those provided by the European rules. Constitutional/ principal environmental/ human rights law 1 4 . 0 5 Th e TEU lays down as objectives of the EU, among others, ‘sus- tainable development’ and ‘a high level of protection and improve- ment of the quality of the environment’.1 Th e TFEU sets out that ‘[e]nvironmental protection requirements must be integrated into the defi nition and implementation of the Union policies and activities, in particular with a view to promoting sustain- able development’.2 Articles 191–193 TFEU, which specifi cally address environmental policy, state explicitly that the EU’s envir- onmental policy shall contribute to ‘combating climate change’.3 1 4 . 0 6 Th e EU is not yet a member of the European Convention on Human Rights and Fundamental Freedoms of 1950, but its acces- sion is now required under Article 6(4) TEU, which states that the provisions of the Convention ‘shall constitute general principles of the Union’s law’. In 2000, the EU adopted a separate Charter on Fundamental Rights,4 which now has the same legal value as the EU Treaties, though in the case of the United Kingdom and Poland, a Protocol to the Lisbon Treaty states that the Charter does not create justiciable rights in those countries except in so far as they have created such rights under national law. 1 A r t i c l e 3 ( 3 ) , T E U . 2 Article 11, TFEU. 3 Article 191(4), TFEU . 4 OJ, C 364, 18.12.2000, p. 1. European Union Law 353 1 4 . 0 7 Th ere is no comprehensive EU climate change legislation. Th e EU has signed and ratifi ed the Kyoto Protocol, which imposes a reduction by 2012 of 8 per cent of the EU’s greenhouse gas (‘GHG’) emissions from 1990 levels. At the time, the EU agreed to an internal, legally binding ‘burden-sharing’5 s y s t e m , w h i c h provided for diff erentiated obligations for the – at that time fi f- teen – Member States. 6 Another binding burden-sharing agree- ment was decided in 2009 among the now twenty-seven Member States, 7 which aimed at reducing the EU’s GHG emissions by 20 per cent by the year 2020, compared to 2005 levels.8 T r a d i n g w i t h e m i s s i o n a l l o w a n c e s 1 4 . 0 8 Th e main EU instrument to address the reduction of the emis- sion of GHGs is Directive 2003/87 9 establishing a scheme for GHG emission allowance trading (the ‘EU ETS’).10 Th e Directive provides larger industrial installations with tradable allowances for the emission of carbon dioxide (CO 2 ). When an installation does not require the use of all the allowances it has obtained, it can sell them; by the same token, when its emissions are likely to emit more CO2 than its allowances levels permit, it can buy 5 Council Decision 2002/358/EC of 25 April 2002 concerning the approval, on behalf of the European Community, of the Kyoto Protocol to the United Nations Framework Convention on Climate Change and the joint fulfi llment of commitments thereunder, OJ L 130, 15.5.2002, pp. 1–3. 6 Th e reduction/increase percentages were fi xed as follows: Belgium –7.5%; Denmark –21%; Germany –21%; Ireland +13%; Greece +25%; Spain +15%; France 0%; Italy –6.6%; Luxembourg: –28%; Netherlands: –6%; Austria: –13%; Portugal: +27%; Finland: 0%; Sweden: +4%; United Kingdom –12.5%. 7 Decision 406/2009/EC, of 23 April 2009 on the eff ort of Member States to reduce their greenhouse gas emissions to meet the Community’s greenhouse gas emission reduction commitments up to 2020, OJ L 140, 5.6.2009, pp. 136–48. 8 Th e reduction/increase percentages were fi xed as follows: Belgium –15%; Bulgaria +20%; Czech Republic +9%; Denmark –20%; Germany –14%; Estonia +11%; Ireland –20%; Greece –4%; Spain –10%; France –14%; Italy –13%; Cyprus –5%; Latvia +17%; Lithuania +15%; Luxembourg –20%; Hungary +10%; Malta +10%; Netherlands –16%; Austria –16%; Poland +1%; Portugal +1%; Romania +19%; Slovenia +4%; Slovakia +13%; Finland –16%; Sweden –17%; United Kingdom –16%. 9 A Directive is a legally binding instrument, addressed to EU Member States. It obliges them as to the result to be achieved, but leaves to the national authorities the choice of form and methods (Article 288 TFEU). 10 Directive 2003/87/EC of 13 October 2003 establishing a scheme for greenhouse gas emis- sion allowance trading within the Community and amending Council Directive 96/61/ EC, OJ L 275, 25.10.2003, pp. 32–46. 354 Ludwig Krämer allowances on the market. Installations which participate in the trading system need not respect the requirement of using the best available techniques for limiting their CO2 emissions. However, Member States may be able to impose national CO2 performance standards on installations even though they are covered by the emissions trading Directive. 11 Th e distribution of allowances fol- lows national allocation plans that must be established by the Member States and approved by the Commission. 1 4 . 0 9 Th is Directive has been amended and strengthened several times, most recently to include aviation activities in the EU ETS; 12 and as of 2013, the total number of EU emission trad- ing allowances will be reduced by 1.74 per cent each year. 13 Furthermore, the percentage of allowances to be auctioned will increase from 2013. Whilst in the energy sector all allocation will be auctioned from 2013, the percentage of allowances to be auctioned will vary from sector to sector. A l t e r n a t i v e e n e r g i e s 14.10 Directive 2009/28, which has replaced earlier EU legislation, aims to ensure that, by 2020, at least 20 per cent of total energy consumption in the EU will stem from renewable energy sources. 14 To that end, each Member State is to reach a spe- cifi c percentage level of energy consumption from renewable 11 Directive 2010/75/EU of 24 November 2010 on Industrial Emissions repeats the formu- lation in the Integrated Pollution Prevention and Control (IPPC) Directive that where emissions of greenhouse gases covered by the emissions trading regime are involved, a permit may not include emission limit values for direct emissions of greenhouse gases unless necessary to prevent signifi cant local pollution (Article 9). But Preamble 10 then provides that ‘In accordance with Article 193 of the Treaty on the Functioning of the European Union (TFEU), this Directive does not prevent Member States from main- taining or introducing more stringent protective measures, for example greenhouse gas emission requirements, provided that such measures are compatible with the Treaties and the Commission has been notifi ed.’ 12 Directive 2008/101/EC of 19 November 2008 amending Directive 2003/87/EC so as to include aviation activities in the scheme for greenhouse gas emission allowance trading within the Community, OJ L 8, 13.1.2009, pp.