EU court rejects steel’s challenge to carbon market

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LUXEMBOURG, Dec 16 (Reuters) - The European Union’s carbon emissions trading scheme, Europe’s key tool for fighting climate change, does not discriminate against steelmakers, the EU’s top court said on Tuesday.

“The directive establishing a community scheme for greenhouse gas allowance trading does not breach the principle of equal treatment,” the European Court of Justice (ECJ) said after a key test of the emissions trading scheme (ETS).

The ruling came just days after European leaders agreed a package of measures to cut emissions to 20 percent below 1990 levels by 2020, after easing the rules slightly to help industry in the grip of recession.

The deal included a major overhaul of the ETS from 2013 to help European industry compete against less-regulated rivals abroad.

French units of steelmaker Arcelor filed a court challenge in 2005 in France, before the company’s merger with Mittal Steel, complaining that the ETS discriminated against steel producers compared with other industries such plastics, which were not included in the scheme.

“The difference in treatment caused by the exclusion of the chemical and non-ferrous metal sectors from the scope of the directive may be regarded as justified,” the ECJ said.

The early inclusion of the chemical sector would have created an unbearable administrative burden because there were about 34,000 installations, the court added.

The steel companies had challenged rules transposing the ETS directive into French law before the Council of State, France’s highest administrative court, which asked the ECJ to rule on whether the scheme infringed the principle of equal treatment.

The governments of Poland, the Czech Republic and Slovakia are also appealing to the ECJ against reductions in their national carbon dioxide emissions allocations imposed by the European Commission in the 2008-2012 trading period. None of the cases has yet been heard. (Writing by Pete Harrison, editing by Dale Hudson)

By Michele Sinner