mick silver
26th February 2015, 05:52 AM
PRAGUE (Reuters) - A Czech tax imposed in 2011 and 2012 on carbon emission allowances granted to companies for free breached a European Union directive, the European Union's Court of Justice ruled on Thursday.
The ruling was made at the request of a Czech court which is considering an appeal of an electricity producer, Sko-Energo, against the tax.
Under the EU's Emissions Trading Directive, companies were awarded at least 90 percent of each member state's permits for carbon emissions for free in 2008-2012.
The court ruled that the Czech tax, introduced in 2011 and set at 32 percent, was at odds with the directive in light of the 10 percent ceiling for allocation of credits for money. Collection from the tax reached several billion crowns in the two years combined.
"The Court observes that, in the light of the 10 percent ceiling on the allocation of allowances for consideration, the directive precludes not only the direct fixing of a price for the allocation of emission allowances but also the subsequent levying of a charge in respect of their allocation," the court ruling said.
"Consequently, the tax at issue, levied following the allocation of the allowances, is incompatible with the directive to the extent that it does not respect that ceiling; that is a matter for the national court to determine."
The European court does not rule on the case itself, but interprets EU law at the request of national judiciary. It is up to the national court to rule on the dispute itself.
The Czech finance ministry said it was preparing a statement on the issue.
The tax, introduced to offset high costs of subsidized renewable energy, affected a wide range of Czech companies in carbon-heavy sector, including electricity producer CEZ or oil refiner Unipetrol.
(Reporting by Jan Lopatka, editing by David Evans)
Business
European Union
carbon emissions
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The ruling was made at the request of a Czech court which is considering an appeal of an electricity producer, Sko-Energo, against the tax.
Under the EU's Emissions Trading Directive, companies were awarded at least 90 percent of each member state's permits for carbon emissions for free in 2008-2012.
The court ruled that the Czech tax, introduced in 2011 and set at 32 percent, was at odds with the directive in light of the 10 percent ceiling for allocation of credits for money. Collection from the tax reached several billion crowns in the two years combined.
"The Court observes that, in the light of the 10 percent ceiling on the allocation of allowances for consideration, the directive precludes not only the direct fixing of a price for the allocation of emission allowances but also the subsequent levying of a charge in respect of their allocation," the court ruling said.
"Consequently, the tax at issue, levied following the allocation of the allowances, is incompatible with the directive to the extent that it does not respect that ceiling; that is a matter for the national court to determine."
The European court does not rule on the case itself, but interprets EU law at the request of national judiciary. It is up to the national court to rule on the dispute itself.
The Czech finance ministry said it was preparing a statement on the issue.
The tax, introduced to offset high costs of subsidized renewable energy, affected a wide range of Czech companies in carbon-heavy sector, including electricity producer CEZ or oil refiner Unipetrol.
(Reporting by Jan Lopatka, editing by David Evans)
Business
European Union
carbon emissions
Click to view comments
View Comments (0)