Provisional text
JUDGMENT OF THE COURT (Second Chamber)
12 November 2026 (*)
( Action for annulment – Regulation (EU) No 2023/857 – Binding annual greenhouse gas emission reductions by Member States from 2021 to 2030 – Amendment to Regulation (EU) 2018/842 – Legal basis for Regulation No 2023/857 – Determination – Account taken of the effects of that regulation – Article 192(1) TFEU – Improvement in the quality of the environment – Point (c) of the first subparagraph of Article 192(2) TFEU – Measures significantly affecting a Member State’s choice between different energy sources and the general structure of its energy supply – Principles of energy solidarity, proportionality and sincere cooperation – Content and statement of reasons of an impact assessment )
In Case C‑451/23,
ACTION for annulment under Article 263 TFEU, brought on 18 July 2023,
Republic of Poland, represented by B. Majczyna, acting as Agent,
applicant,
v
European Parliament, represented by O. Denkov and W.D. Kuzmienko, acting as Agents,
Council of the European Union, represented initially by R. Boucquey, A. Maceroni, M. Moore and A. Sikora-Kalėda, acting as Agents, and subsequently by R. Boucquey, A. Maceroni and M. Moore, acting as Agents, and lastly by A. Maceroni, M. Moore and K. Pleśniak, acting as Agents,
defendants,
supported by:
European Commission, represented by D. Milanowska, M. Owsiany-Hornung, K. Talabér-Ritz and G. Wils, acting as Agents,
intervener,
THE COURT (Second Chamber),
composed of K. Jürimäe, President of Chamber, K. Lenaerts, President of the Court, acting as a Judge of the Second Chamber, Z. Csehi, M. Gavalec (Rapporteur) and F. Schalin, Judges,
Advocate General: T. Ćapeta,
Registrar: V. Di Bucci,
having regard to the written procedure,
having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,
gives the following
Judgment
1 By its application, the Republic of Poland asks the Court to annul Regulation (EU) 2023/857 of the European Parliament and of the Council of 19 April 2023 amending Regulation (EU) 2018/842 on binding annual greenhouse gas emission reductions by Member States from 2021 to 2030 contributing to climate action to meet commitments under the Paris Agreement, and Regulation (EU) 2018/1999 (OJ 2023 L 111, p. 1; ‘the contested regulation’).
Legal context
The EU Treaty
2 Article 4(3) TEU provides:
‘Pursuant to the principle of sincere cooperation, the [European] Union and the Member States shall, in full mutual respect, assist each other in carrying out tasks which flow from the Treaties.
The Member States shall take any appropriate measure, general or particular, to ensure fulfilment of the obligations arising out of the Treaties or resulting from the acts of the institutions of the Union.
The Member States shall facilitate the achievement of the Union's tasks and refrain from any measure which could jeopardise the attainment of the Union’s objectives.’
3 Article 5(4) TEU provides:
‘Under the principle of proportionality, the content and form of Union action shall not exceed what is necessary to achieve the objectives of the Treaties.
The institutions of the Union shall apply the principle of proportionality as laid down in the Protocol on the application of the principles of subsidiarity and proportionality.’
The FEU Treaty
4 Article 192(1) and point (c) of the first subparagraph of Article 192(2) TFEU provides:
‘1. The European Parliament and the Council [of the European Union], acting in accordance with the ordinary legislative procedure and after consulting the [European] Economic and Social Committee and the [European] Committee of the Regions, shall decide what action is to be taken by the Union in order to achieve the objectives referred to in Article 191.
2. By way of derogation from the decision-making procedure provided for in paragraph 1 and without prejudice to Article 114, the Council acting unanimously in accordance with a special legislative procedure and after consulting the [Parliament], the [European] Economic and Social Committee and the [European] Committee of the Regions, shall adopt:
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(c) measures significantly affecting a Member State’s choice between different energy sources and the general structure of its energy supply.
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5 Article 194(1)(b) TFEU provides:
‘1. In the context of the establishment and functioning of the internal market and with regard for the need to preserve and improve the environment, Union policy on energy shall aim, in a spirit of solidarity between Member States, to:
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(b) ensure security of energy supply in the Union’.
Regulation (EU) 2018/1999
6 Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 December 2018 on the Governance of the Energy Union and Climate Action, amending Regulations (EC) No 663/2009 and (EC) No 715/2009 of the European Parliament and of the Council, Directives 94/22/EC, 98/70/EC, 2009/31/EC, 2009/73/EC, 2010/31/EU, 2012/27/EU and 2013/30/EU of the European Parliament and of the Council, Council Directives 2009/119/EC and (EU) 2015/652 and repealing Regulation (EU) No 525/2013 of the European Parliament and of the Council (OJ 2018 L 328, p. 1), as amended by Regulation (EU) 2023/839 of the European Parliament and of the Council of 19 April 2023 (OJ 2023 L 107, p. 1) (‘Regulation 2018/1999’), includes Articles 4 and 5, entitled ‘National objectives, targets and contributions for the five dimensions of the Energy Union’ and ‘Member States’ contribution setting process in the area of renewable energy’, respectively.
Regulation (EU) 2018/842
7 Recitals 1 to 6, 17, 18, 26 and 28 of Regulation (EU) 2018/842 of the European Parliament and of the Council of 30 May 2018 on binding annual greenhouse gas emission reductions by Member States from 2021 to 2030 contributing to climate action to meet commitments under the Paris Agreement and amending Regulation (EU) No 525/2013 (EU) No 525/2013 (OJ 2018 L 156, p. 26) state:
‘(1) The European Council in its conclusions of 23-24 October 2014 on the 2030 climate and energy policy framework endorsed a binding target of at least a 40% domestic reduction in economy-wide greenhouse gas emissions by 2030 compared to 1990 and that target was reaffirmed in the European Council conclusions of 17-18 March 2016.
(2) The European Council conclusions of 23-24 October 2014 stated that the emissions reduction target of at least 40% should be delivered collectively by the Union in the most cost-effective manner possible, with the reductions in the European Union emissions trading system (“EU ETS”) laid down in Directive 2003/87/EC of the European Parliament and of the Council [of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC (OJ 2003 L 275, p. 32)] and non-ETS sectors amounting to 43% and 30%, respectively, by 2030 compared to 2005. All sectors of the economy should contribute to achieving these greenhouse gas emission reductions, and all Member States should participate in this effort, balancing considerations of fairness and solidarity. The methodology to set the national reduction targets for the non-[EU] ETS sectors, with all the elements applied in Decision No 406/2009/EC of the European Parliament and of the Council [of 23 April 2009 on the effort of Member States to reduce their greenhouse gas emissions to meet the Community’s greenhouse gas emission reduction commitments up to 2020 (OJ 2009 L 140, p. 136)], should be continued until 2030 with efforts distributed on the basis of relative Gross Domestic Product (GDP) per capita. All Member States should contribute to the overall Union reduction in 2030 with the targets spanning from 0% to -40% compared to 2005. National targets within the group of Member States with a GDP per capita above the Union average should be adjusted relatively to reflect cost-effectiveness in a fair and balanced manner. Achieving these greenhouse gas emission reductions should boost efficiency and innovation in the Union economy and should, in particular, promote improvements, notably in buildings, agriculture, waste management and transport, in so far as they fall under the scope of this Regulation.
(3) This Regulation forms part of the implementation of the Union’s contributions under the Paris Agreement [adopted under the United Nations Framework Convention on Climate Change (OJ 2016 L 282, p. 4; “the Paris Agreement”)]. The Paris Agreement was [approved] on behalf of the Union … by Council Decision (EU) 2016/1841 [of 5 October 2016 on the conclusion, on behalf of the European Union, of the Paris Agreement adopted under the United Nations Framework Convention on Climate Change (OJ 2016 L 282, p. 1)]. The commitment of the Union to economy-wide greenhouse gas emission reductions was set out in the intended nationally determined contribution submitted in view of the Paris Agreement by the Union and its Member States to the Secretariat of the [United Nations Framework Convention on Climate Change (“UNFCCC”)] on 6 March 2015. The Paris Agreement entered into force on 4 November 2016 and replaces the approach taken under the 1997 Kyoto Protocol which will not be continued beyond 2020.
(4) The Paris Agreement, inter alia, sets out a long-term goal in line with the objective to keep the global temperature increase well below 2 °C above pre-industrial levels and to pursue efforts to keep it to 1.5 °C above pre-industrial levels. It also stresses the importance to adapt to the adverse impacts of climate change and to make finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development. The Paris Agreement also calls for a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century, and invites Parties to take action to conserve and enhance, as appropriate, sinks and reservoirs of greenhouse gases, including forests.
(5) In its conclusions of 29-30 October 2009, the European Council supported a Union objective, in the context of necessary reductions according to the Intergovernmental Panel on Climate Change (IPCC) by developed countries as a group, to reduce greenhouse gas emissions by 80-95% by 2050 compared to 1990 levels.
(6) The nationally determined contributions of the Parties to the Paris Agreement are to reflect their highest possible ambition and represent a progression over time. In addition, Parties to the Paris Agreement should strive to formulate and communicate long-term low greenhouse gas emission development strategies, mindful of the objectives of the Paris Agreement. The Council conclusions of 13 October 2017 recognise the importance of the long-term goals and the five-year review cycles in the implementation of the Paris Agreement and highlight the importance of long-term low greenhouse gas emission development strategies as a policy tool for developing reliable pathways and the long-term policy changes needed to achieve the goals of the Paris Agreement.
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(17) The greenhouse gas emissions reduction of each Member State for 2030 should be determined in relation to the level of its 2005 reviewed greenhouse gas emissions covered by this Regulation, excluding verified greenhouse gas emissions from installations that operated in 2005 and which were only included in the EU ETS after 2005. Annual emission allocations from 2021 to 2030 should be determined on the basis of data submitted by the Member States and reviewed by the [European] Commission.
(18) The approach of annually binding national limits taken in Decision [No 406/2009] should be continued from 2021 to 2030. …
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(26) In recognition of previous efforts made since 2013 by those Member States which had a GDP per capita below the Union average in 2013, it is appropriate to establish a limited special purpose safety reserve corresponding to up to 105 million tonnes [carbon dioxide (CO2)] equivalent, while maintaining the environmental integrity of this Regulation as well as incentives for Member States’ actions beyond the minimum contributions under this Regulation. The safety reserve should benefit Member States whose GDP per capita was below Union average in 2013, whose greenhouse gas emissions remain below their annual emission allocations from 2013 to 2020 and which have problems with achieving their 2030 greenhouse gas emission target despite using other flexibilities provided for in this Regulation. A safety reserve of that size would cover a significant part of the projected collective deficit of eligible Member States in the period from 2021 to 2030, without additional policies, while maintaining incentives for additional action. The safety reserve should be available to those Member States in 2032, under certain conditions and provided that its use does not undermine the achievement of the greenhouse gas emission reduction target of the Union of 30% for the year 2030 in the sectors covered by this Regulation.
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(28) This Regulation should be reviewed as of 2024 and every five years thereafter in order to assess its overall functioning, in particular with regard to the need for increased stringency of Union policies and measures. The review should take into account, inter alia, evolving national circumstances and be informed by the results of the 2018 Facilitative Dialogue under the UNFCCC (“Talanoa dialogue”) and the global stocktake under the Paris Agreement. As part of the review, the balance between supply and demand for annual emission allocations should also be considered to ensure the adequacy of the obligations laid down by this Regulation. In addition, as part of its regular reporting under Regulation (EU) No 525/2013 [of the European Parliament and of the Council of 21 May 2013 on a mechanism for monitoring and reporting greenhouse gas emissions and for reporting other information at national and Union level relevant to climate change and repealing Decision No 280/2004/EC (OJ 2013 L 165, p. 13)], the Commission should, by 31 October 2019, assess the outcome of the Talanoa dialogue. The review for the period after 2030 should be in line with the long-term objectives and the commitments made under the Paris Agreement and, to this end, it should reflect a progression over time.’
8 Article 1 of Regulation 2018/842, entitled ‘Subject matter’, provides:
‘This Regulation lays down obligations on Member States with respect to their minimum contributions for the period from 2021 to 2030 to fulfilling the Union’s target of reducing its greenhouse gas emissions by 30% below 2005 levels in 2030 in the sectors covered by Article 2 of this Regulation and contributes to achieving the objectives of the Paris Agreement. This Regulation also lays down rules on determining annual emission allocations and for the evaluation of Member States’ progress towards meeting their minimum contributions.’
9 Article 2 of that regulation, entitled ‘Scope’, provides:
‘1. This Regulation applies to the greenhouse gas emissions from IPCC source categories of energy, industrial processes and product use, agriculture and waste as determined pursuant to Regulation [No 525/2013], excluding greenhouse gas emissions from the activities listed in Annex I to Directive [2003/87].
2. Without prejudice to Article 7 and Article 9(2) of this Regulation, this Regulation does not apply to greenhouse gas emissions and removals covered by Regulation (EU) 2018/841 [of the European Parliament and of the Council of 30 May 2018 on the inclusion of greenhouse gas emissions and removals from land use, land use change and forestry in the 2030 climate and energy framework, and amending Regulation (EU) No 525/2013 and Decision No 529/2013/EU (OJ 2018 L 156, p. 1)].
3. For the purposes of this Regulation, CO2 emissions from IPCC source category “1.A.3.A civil aviation” shall be treated as zero.’
10 Article 4 of Regulation 2018/842, entitled ‘Annual emission levels for the period from 2021 to 2030’, provides:
‘1. Each Member State shall, in 2030, limit its greenhouse gas emissions at least by the percentage set for that Member State in Annex I in relation to its greenhouse gas emissions in 2005, determined pursuant to paragraph 3 of this Article.
2. Subject to the flexibilities provided for in Articles 5, 6 and 7 of this Regulation, to the adjustment pursuant to Article 10(2) of this Regulation and taking into account any deduction resulting from the application of Article 7 of Decision [No 406/2009], each Member State shall ensure that its greenhouse gas emissions in each year between 2021 and 2029 do not exceed the limit defined by a linear trajectory, starting on the average of its greenhouse gas emissions during 2016, 2017 and 2018 determined pursuant to paragraph 3 of this Article and ending in 2030 on the limit set for that Member State in Annex I to this Regulation. The linear trajectory of a Member State shall start either at five-twelfths of the distance from 2019 to 2020 or in 2020, whichever results in a lower allocation for that Member State.
3. The Commission shall adopt implementing acts setting out the annual emission allocations for the years from 2021 to 2030 in terms of tonnes of CO2 equivalent as specified in paragraphs 1 and 2 of this Article. For the purposes of those implementing acts, the Commission shall carry out a comprehensive review of the most recent national inventory data for the years 2005 and 2016 to 2018 submitted by Member States pursuant to Article 7 of Regulation [No 525/2013].
Those implementing acts shall indicate the value for the 2005 greenhouse gas emissions of each Member State used to determine the annual emission allocations specified in paragraphs 1 and 2.
4. Those implementing acts shall also specify, based on the percentages notified by Member States under Article 6(3), the total quantities that may be taken into account for a Member State’s compliance under Article 9 between 2021 and 2030. If the sum of all Member States’ total quantities were to exceed the collective total of 100 million, the total quantities for each Member State shall be reduced on a pro rata basis so that the collective total is not exceeded.
5. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 14.’
11 Article 5 of Regulation 2018/842, entitled ‘Flexibilities by means of borrowing, banking and transfer’, provides:
‘1. In respect of the years 2021 to 2025, a Member State may borrow a quantity of up to 10% from its annual emission allocation for the following year.
2. In respect of the years 2026 to 2029, a Member State may borrow a quantity of up to 5% from its annual emission allocation for the following year.
3. A Member State whose greenhouse gas emissions for a given year are below its annual emission allocation for that year, taking into account the use of flexibilities pursuant to this Article and Article 6, may:
(a) in respect of the year 2021, bank that excess part of its annual emission allocation to subsequent years until 2030; and
(b) in respect of the years 2022 to 2029, bank the excess part of its annual emission allocation up to a level of 30% of its annual emission allocations up to that year to subsequent years until 2030.
4. A Member State may transfer up to 5% of its annual emission allocation for a given year to other Member States in respect of the years 2021 to 2025, and up to 10% in respect of the years 2026 to 2030. The receiving Member State may use that quantity for compliance under Article 9 for the given year or for subsequent years until 2030.
5. A Member State whose reviewed greenhouse gas emissions for a given year are below its annual emission allocation for that year, taking into account the use of flexibilities pursuant to paragraphs 1 to 4 of this Article and Article 6, may transfer that excess part of its annual emission allocation to other Member States. The receiving Member State may use that quantity for compliance under Article 9 for that year or for subsequent years until 2030.
6. Member States may use revenues generated by transfers of annual emission allocations pursuant to paragraphs 4 and 5 to tackle climate change in the Union or in third countries. Member States shall inform the Commission of any actions taken pursuant to this paragraph.
…’
12 Article 6 of that regulation provides for ‘flexibility for certain Member States following reduction of EU ETS allowances’.
13 Article 7 of that regulation, entitled ‘Additional use of up to 280 million net removals from [land use, land use change and forestry (LULUCF)]’, provides, in paragraph (1)(a):
‘To the extent that a Member State’s greenhouse gas emissions exceed its annual emission allocations for a given year, including any annual emission allocations banked pursuant to Article 5(3) of this Regulation, a quantity up to the sum of total net removals and total net emissions from the combined land accounting categories of afforested land, deforested land, managed cropland, managed grassland and, subject to the delegated acts adopted pursuant to paragraph 2 of this Article, managed forest land and managed wetland, as referred to in points (a) and (b) of Article 2(1) of Regulation [2018/841], may be taken into account for its compliance under Article 9 of this Regulation for that year, provided that:
(a) the cumulative quantity taken into account for that Member State for all the years of the period from 2021 to 2030 does not exceed the maximum amount of total net removals set out in Annex III to this Regulation for that Member State’.
14 Article 8 of Regulation 2018/842, entitled ‘Corrective action’, provides:
‘1. If the Commission finds, in its annual assessment under Article 21 of Regulation [No 525/2013] and taking into account the intended use of the flexibilities referred to in Articles 5, 6 and 7 of this Regulation, that a Member State is not making sufficient progress towards meeting its obligations under Article 4 of this Regulation, that Member State shall, within three months, submit to the Commission a corrective action plan that includes:
(a) additional actions that the Member State shall implement in order to meet its specific obligations under Article 4 of this Regulation, through domestic policies and measures and the implementation of Union action;
(b) a strict timetable for implementing such actions, which enables the assessment of annual progress in implementation.
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3. The Commission may issue an opinion regarding the robustness of the corrective action plans submitted in accordance with paragraph 1 and shall in that case do so within four months of receipt of those plans. The Member State concerned shall take utmost account of the Commission’s opinion and may revise its corrective action plan accordingly.’
15 Annex I to Regulation 2018/842, entitled ‘Member State greenhouse gas emission reductions pursuant to Article 4(1)’, contains a table fixing a greenhouse gas emissions reduction target for the Republic of Poland of 7% in 2030 in relation to their 2005 levels.
European Climate Law
16 Regulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021 establishing the framework for achieving climate neutrality and amending Regulations (EC) No 401/2009 and (EU) 2018/1999 (‘European Climate Law’) (OJ 2021 L 243, p. 1), provides in Article 2, entitled ‘Climate-neutrality objective’:
‘1. Union-wide greenhouse gas emissions and removals regulated in Union law shall be balanced within the Union at the latest by 2050, thus reducing emissions to net zero by that date, and the Union shall aim to achieve negative emissions thereafter.
2. The relevant Union institutions and the Member States shall take the necessary measures at Union and national level, respectively, to enable the collective achievement of the climate-neutrality objective set out in paragraph 1, taking into account the importance of promoting both fairness and solidarity among Member States and cost-effectiveness in achieving this objective.’
17 Article 4 of that law, entitled ‘Intermediate Union climate targets’, provides, in paragraphs 1, 2, 5 and 7:
‘1. In order to reach the climate-neutrality objective set out in Article 2(1), the binding Union 2030 climate target shall be a domestic reduction of net greenhouse gas emissions (emissions after deduction of removals) by at least 55% compared to 1990 levels by 2030.
When implementing the target referred to in the first subparagraph, the relevant Union institutions and the Member States shall prioritise swift and predictable emission reductions and, at the same time, enhance removals by natural sinks.
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2. By 30 June 2021, the Commission shall review relevant Union legislation in order to enable the achievement of the target set out in paragraph 1 of this Article and the climate-neutrality objective set out in Article 2(1) and consider taking the necessary measures, including the adoption of legislative proposals, in accordance with the Treaties.
Within the framework of the review referred to in the first subparagraph and future reviews, the Commission shall assess in particular the availability under Union law of adequate instruments and incentives to mobilise the investments needed, and propose measures as necessary.
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5. When proposing the Union 2040 climate target in accordance with paragraph 3, the Commission shall consider the following:
(a) the best available and most recent scientific evidence, including the latest reports of the IPCC and the [European Scientific Advisory Board on Climate Change];
(b) the social, economic and environmental impacts, including the costs of inaction;
(c) the need to ensure a just and socially fair transition for all;
(d) cost-effectiveness and economic efficiency;
(e) [competitiveness] of the Union’s economy, in particular small and medium-sized enterprises and sectors most exposed to carbon leakage;
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(h) fairness and solidarity between and within Member States;
(i) the need to ensure environmental effectiveness and progression over time;
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(l) international developments and efforts undertaken to achieve the long-term objectives of the Paris Agreement and the ultimate objective of the UNFCCC;
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7. The provisions of this Article shall be kept under review in light of international developments and efforts undertaken to achieve the long-term objectives of the Paris Agreement, including with regard to the outcomes of international discussions on common time frames for nationally determined contributions.’
18 Article 5 of that law, entitled ‘Adaptation to climate change’, provides as follows in paragraphs 1 to 3:
‘1. The relevant Union institutions and the Member States shall ensure continuous progress in enhancing adaptive capacity, strengthening resilience and reducing vulnerability to climate change in accordance with Article 7 of the Paris Agreement.
2. The Commission shall adopt a Union strategy on adaptation to climate change in line with the Paris Agreement and shall regularly review it in the context of the review provided for in point (b) of Article 6(2) of this Regulation.
3. The relevant Union institutions and the Member States shall also ensure that policies on adaptation in the Union and in Member States are coherent, mutually supportive, provide co-benefits for sectoral policies, and work towards better integration of adaptation to climate change in a consistent manner in all policy areas, including relevant socioeconomic and environmental policies and actions, where appropriate, as well as in the Union’s external action. They shall focus, in particular, on the most vulnerable and impacted populations and sectors, and identify shortcomings in this regard in consultation with civil society.’
The contested regulation
19 Recitals 1 to 8 and 11 to 19 of the contested regulation state:
‘(1) The Paris Agreement … entered into force on 4 November 2016. The Parties to the Paris Agreement have agreed to hold the increase in the global average temperature well below 2 °C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 °C above pre-industrial levels. That commitment has been reinforced with the adoption under the UNFCCC of the Glasgow Climate Pact on 13 November 2021, in which the Conference of the Parties to the UNFCCC, serving as the meeting of the Parties to the Paris Agreement, recognises that the impacts of climate change will be much lower at a temperature increase of 1.5 °C compared with 2 °C, and resolves to pursue efforts to limit the temperature increase to 1.5 °C.
(2) The need for action to reduce greenhouse gas emissions is becoming increasingly urgent, as stated by the [IPCC] in its reports of 7 August 2021 entitled “Climate change 2021: The Physical Science Basis”, of 28 February 2022 entitled “Climate Change 2022: Impacts, Adaptation and Vulnerability” and of 4 April 2022 entitled “Climate Change 2022: Mitigation of Climate Change”. The Union should therefore address that urgency by stepping up its efforts.
(3) The Union has in place a regulatory framework to achieve the 2030 greenhouse gas emission reduction target of at least 40% that was endorsed, before the entry into force of the Paris Agreement, by the European Council in 2014. That regulatory framework consists, inter alia, of Directive [2003/87], Regulation [2018/841] requiring Member States to balance greenhouse gas emissions and removals from land use, land use change and forestry (LULUCF), and Regulation [2018/842] establishing national targets for reduction of greenhouse gas emissions by 2030 in the sectors which are not covered by Directive [2003/87] or by Regulation [2018/841].
(4) The communication of the Commission of 11 December 2019 on “The European Green Deal” provides a starting point for the achievement of the Union’s climate-neutrality objective at the latest by 2050 and the aim of achieving negative emissions thereafter as laid down in Article 2(1) of Regulation (EU) 2021/1119 of [the European Climate Law]. The European Green Deal combines a comprehensive set of mutually reinforcing measures and initiatives aimed at achieving climate neutrality in the Union by 2050 and sets out a new growth strategy that aims to transform the Union into a fair and prosperous society, with a modern, resource-efficient and competitive economy, where economic growth is decoupled from resource use. It also aims to protect, conserve and enhance the Union’s natural capital, and protect the health and well-being of citizens from environment-related risks and impacts. At the same time, that transition has gender equality aspects as well as a particular impact on some disadvantaged and vulnerable groups, such as older people, persons with disabilities and persons with a minority racial or ethnic background. It must therefore be ensured that the transition is just and inclusive, leaving no one behind.
(5) On 16 June 2022, the Council adopted a Recommendation on ensuring a fair transition towards climate neutrality, … in which it highlighted the need for accompanying measures and for paying particular attention to supporting those regions, industries, micro, small and medium-sized enterprises, workers, households and consumers that will face the greatest challenges. That Recommendation encourages Member States to consider a set of measures in the areas of employment and labour market transitions, job creation and entrepreneurship, health and safety at work, public procurement, taxation and social protection systems, essential services and housing, as well as, inter alia, with a view to strengthening gender equality, education and training.
(6) Through the adoption of [the European Climate Law], the Union has enshrined in legislation a binding objective of economy-wide climate neutrality by 2050, thus reducing emissions to net zero by that date, and the aim of achieving negative emissions thereafter. That Regulation also establishes a binding Union domestic reduction target for net greenhouse gas emissions (emissions after deduction of removals) of at least 55% compared to 1990 levels by 2030. Furthermore, it establishes that the contribution of net removals to the Union 2030 climate target is to be limited to 225 million tonnes of CO2 equivalent.
(7) In order to implement the commitments laid down in [the European Climate Law] as well as the Union’s contributions under the Paris Agreement, the Union regulatory framework for achieving the 2030 greenhouse gas emission reduction target should be adapted.
(8) Regulation [2018/842] lays down obligations on Member States with respect to their minimum contributions for the period from 2021 to 2030 to fulfilling the Union’s current greenhouse gas emission reduction target of 30% below 2005 levels in 2030 in the sectors covered by Article 2 of that Regulation. It also lays down rules on determining annual emission allocations and for the evaluation of Member States’ progress towards meeting their minimum contributions.
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(11) In some sectors, greenhouse gas emissions have either increased or remained stable. In its communication of 17 September 2020 on “Stepping up Europe’s 2030 climate ambition – Investing in a climate-neutral future for the benefit of our people”, the Commission indicated that the increased 2030 overall greenhouse gas emission reduction target can only be achieved with the contribution of all sectors.
(12) In its conclusions of 11 December 2020, the European Council stated that the new 2030 greenhouse gas emission reduction target will be delivered collectively by the Union in the most cost-effective manner possible, that all Member States will participate in that effort, taking into account considerations of fairness and solidarity, while leaving no one behind, and that the new 2030 target needs to be achieved in a way that preserves the Union’s competitiveness and takes account of Member States’ different starting points and specific national circumstances and greenhouse gas emission reduction potential, including those of island Member States and islands, as well as efforts made.
(13) In order to achieve the new Union 2030 target of reducing net greenhouse gas emissions by at least 55% compared to 1990 levels, the sectors covered by Regulation [2018/842] will need to reduce their greenhouse gas emissions progressively until they reach ‑40% in 2030 compared to 2005 levels. Regulation [2018/842] also contributes to achieving the objectives of the Paris Agreement, as well as the Union’s objective of climate neutrality at the latest by 2050 under [the European Climate Law], the achievement of which requires convergence of all Member States’ efforts over time, while taking into account specific national circumstances.
(14) The greenhouse gas emission reduction target for 2030 laid down in Regulation [2018/842] needs to be revised for each Member State. The methodology used for the revision of the 2030 national greenhouse gas emission reduction targets should be the same as the one that was used when Regulation [2018/842] was adopted, where the national contributions were determined in consideration of the different capacities and cost-efficiency opportunities in Member States so as to ensure a fair and balanced distribution of the effort. The greenhouse gas emission reduction target for each Member State in 2030 should thus be determined in relation to the level of its 2005 greenhouse gas emissions covered by that Regulation, as reviewed pursuant to Article 4(3) thereof, excluding verified greenhouse gas emissions from installations that operated in 2005 and which were only included in the EU ETS after 2005.
(15) As a consequence, as from the year of entry into force of this Regulation, new binding national limits, expressed in annual emission allocations, are necessary. Those limits will progressively lead to the 2030 greenhouse gas emission reduction target of each Member State. The annual limits for the years preceding the year of entry into force of this Regulation set out in Commission Implementing Decision (EU) 2020/2126 [of 16 December 2020 on setting out the annual emission allocations of the Member States for the period from 2021 to 2030 pursuant to Regulation (EU) 2018/842 of the European Parliament and of the Council (OJ 2020 L 426, p. 58)] are maintained.
(16) The COVID-19 pandemic and [the Federation of] Russia’s war of aggression against Ukraine are impacting the Union’s economy and the level of its greenhouse gas emissions to a degree that cannot yet be fully quantified. On the other hand, the Union is deploying its largest stimulus package ever and accelerating the transition away from fossil fuels, which also has a potential impact on the level of greenhouse gas emissions. Due to those uncertainties and other unforeseen events having an impact on greenhouse gas emissions, it is appropriate to review the emissions data in 2025 and, if necessary, update the annual emission allocations in 2025 for the years 2026 to 2030. That update should be based on a comprehensive review of the national inventory data carried out by the Commission in order to determine the average greenhouse gas emissions of each Member State in the years 2021, 2022 and 2023.
(17) In accordance with [the European Climate Law], priority should be given to reductions in direct greenhouse gas emissions, which will have to be complemented by increased carbon removals in order to achieve climate neutrality. …
(18) In order to incentivise earlier action and further ensure environmental integrity, it is necessary and appropriate to lower the ceilings for borrowing and banking of annual emission allocations for the whole period from 2021 to 2030. On the other hand, Member States should be able to reduce progressively their greenhouse gas emissions and reach their increased national greenhouse gas emission reduction targets for 2030 in a cost-effective manner. In view of the new and more stringent annual emission allocations required by this Regulation, it is appropriate to increase the existing ceilings on transfers of annual emission allocations between Member States. The possibility of transferring annual emission allocations promotes cooperation between Member States, allowing them to achieve their greenhouse gas emission reduction targets cost-effectively, while preserving environmental integrity. The transparency of such transfers should be ensured, so that they are carried out in a manner that is mutually convenient, including by means of auctioning, by the use of market intermediaries acting on an agency basis, by way of bilateral arrangements or by the use of an electronic interface aiming to facilitate the exchange of information on intended transfers and to reduce transaction costs.
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(19) For certain Member States, it is possible to have a limited cancellation of EU ETS emission allowances taken into account for the purposes of compliance with Regulation [2018/842] ([“the] EU ETS flexibility”). Of those Member States that are eligible, two have not made use of the EU ETS flexibility and one has not made full use of it. In view of the increased ambition level set by this Regulation, those Member States should be granted a new opportunity to make use or further use of that flexibility. …’
20 Article 1 of the contested regulation provides, in paragraphs 1 to 7 and 9:
‘Regulation [2018/842] is amended as follows:
(1) Article 1 is replaced by the following:
“Article 1
Subject matter
This Regulation lays down obligations on Member States with respect to their minimum contributions for the period from 2021 to 2030 to fulfilling the Union’s target of reducing its greenhouse gas emissions by 40% below 2005 levels in 2030 in the sectors covered by Article 2 of this Regulation. It contributes to the long-term target of climate neutrality in the Union at the latest by 2050, with the aim of achieving negative emissions thereafter. It thereby contributes to achieving the objectives of [the European Climate Law] and the Paris Agreement. This Regulation also lays down rules on determining annual emission allocations and for the evaluation of Member States’ progress towards meeting their minimum contributions.”
(2) In Article 2, paragraph 1 is replaced by the following:
“1. This Regulation applies to the greenhouse gas emissions from IPCC source categories of energy, industrial processes and product use, agriculture and waste as determined pursuant to Regulation [2018/1999], excluding greenhouse gas emissions from the activities listed in Annex I to Directive [2003/87], other than the activity ‘maritime transport’ and activities only listed therein for the purposes of Articles 14 and 15 of that Directive.”
(3) Article 4 is amended as follows:
(a) paragraphs 1 to 4 are replaced by the following:
“1. Each Member State shall, in 2030, limit its greenhouse gas emissions at least by the percentage set for that Member State in column 2 of Annex I in relation to its greenhouse gas emissions in 2005, determined pursuant to paragraph 3 of this Article.
2. Subject to the flexibilities provided for in Articles 5, 6 and 7 of this Regulation and to the adjustment pursuant to Article 10(2) of this Regulation, and taking into account any deduction resulting from the application of Article 7 of Decision [No 406/2009], each Member State shall ensure that its greenhouse gas emissions:
(a) do not exceed, in the years 2021 and 2022, the limit defined by a linear trajectory, starting on the average of that Member State’s greenhouse gas emissions in 2016, 2017 and 2018, as set out pursuant to paragraph 3 of this Article, and ending in 2030 at the limit set for that Member State in column 1 of Annex I to this Regulation; the linear trajectory of a Member State shall start either at five-twelfths of the distance from 2019 to 2020 or in 2020, whichever results in a lower annual emission allocation for that Member State;
(b) do not exceed, in the years 2023, 2024 and 2025, the limit defined by a linear trajectory, starting in 2022 at the annual emission allocation for that Member State, as set out pursuant to paragraph 3 of this Article for that year, and ending in 2030 at the limit set for that Member State in column 2 of Annex I to this Regulation;
(c) do not exceed, in the years 2026 to 2030, the limit defined by a linear trajectory, starting on the average of that Member State’s greenhouse gas emissions in 2021, 2022 and 2023, as submitted by that Member State pursuant to Article 26 of [Regulation 2018/1999] and in accordance with paragraph 3 of this Article, and ending in 2030 at the limit set for that Member State in column 2 of Annex I to this Regulation; the linear trajectory of a Member State shall start at nine-twelfths of the distance from 2023 to 2024.
3. The Commission shall adopt implementing acts setting out the annual emission allocations for each Member State for the years from 2021 to 2030 in tonnes of CO2 equivalent in accordance with the linear trajectories set out in paragraph 2 of this Article.
For the years 2021 and 2022, the Commission shall determine the annual emission allocations based on a comprehensive review of the most recent national inventory data for the years 2005, 2016, 2017 and 2018, submitted by the Member States pursuant to Article 7 of Regulation [No 525/2013], and shall indicate the value for the 2005 greenhouse gas emissions of each Member State used to determine those annual emission allocations.
For the years 2023, 2024 and 2025, the Commission shall determine the annual emission allocations based on the value for the 2005 greenhouse gas emissions of each Member State indicated pursuant to the second subparagraph of this paragraph and on the reviewed values of the national inventory data for the years 2016, 2017 and 2018 referred to in that second subparagraph.
For the years 2026 to 2030, the Commission shall determine the annual emission allocations based on the value for the 2005 greenhouse gas emissions of each Member State indicated pursuant to the second subparagraph of this paragraph and on a comprehensive review of the most recent national inventory data for the years 2021, 2022 and 2023 submitted by the Member States pursuant to Article 26 of Regulation [2018/1999].
4. The implementing acts referred to in paragraph 3 shall also specify, based on the percentages notified by Member States pursuant to Article 6(3), (3a) and (3b), the total quantities that may be taken into account for a Member State’s compliance under Article 9 between 2021 and 2030. If the sum of all Member States’ total quantities exceeds the collective total of 100 million, the total quantities for each Member State shall be reduced on a pro rata basis so that the collective total is not exceeded.”
(b) the following paragraph is added:
“6. When undertaking the actions to limit the greenhouse gas emissions under paragraphs 1 and 2, Member States shall consider the need to ensure a just and socially fair transition for all. The Commission may issue guidance to support Member States in that regard.”
(4) Article 5 is amended as follows:
(a) paragraph 1 is replaced by the following:
“1. In respect of the years 2021 to 2025, a Member State may borrow a quantity of up to 7.5% from its annual emission allocation for the following year.”
(b) paragraphs 3 and 4 are replaced by the following:
“3. A Member State whose greenhouse gas emissions for a given year are below its annual emission allocation for that year, taking into account the use of flexibilities pursuant to this Article and Article 6, may:
(a) in respect of the year 2021, bank the excess part of its annual emission allocation up to a level of 75% of its annual emission allocation for 2021 to subsequent years until 2030; and
(b) in respect of the years 2022 to 2029, bank the excess part of its annual emission allocation up to a level of 25% of its annual emission allocations up to that year to subsequent years until 2030.
4. A Member State may transfer up to 10% of its annual emission allocation for a given year to other Member States in respect of the years 2021 to 2025, and up to 15% in respect of the years 2026 to 2030. The receiving Member State may use that quantity for compliance under Article 9 for the given year or for subsequent years until 2030.”
(c) the following paragraph is inserted:
“5a. Before any transfer of annual emission allocations pursuant to paragraphs 4 and 5, a Member State shall inform, in electronic form, the Climate Change Committee established by [Regulation 2018/1999] of its intention to transfer part of its annual emission allocation for any given year.”
(d) paragraph 6 is replaced by the following:
“6. Member States should use revenues, or their equivalent in financial value, generated by transfers of annual emission allocations pursuant to paragraphs 4 and 5 to tackle climate change in the Union or in third countries. Member States shall inform the Commission of any actions taken pursuant to this paragraph and shall make that information public in an easily accessible form.”
(5) Article 6 is amended as follows:
(a) in paragraph 3, the second subparagraph is replaced by the following:
“The Member States listed in Annex II may decide to revise the notified percentage once in 2024 and once in 2027. In such case, the Member State concerned shall notify the Commission thereof by 31 December 2024 or by 31 December 2027, respectively.”;
…
(6) Article 7 is amended as follows:
(a) the title is replaced by the following:
“Additional use of net removals from LULUCF”;
(b) paragraph 1 is amended as follows:
(i) the introductory sentence is replaced by the following:
“1. To the extent that a Member State’s greenhouse gas emissions exceed its annual emission allocations for a given year, including any annual emission allocations banked pursuant to Article 5(3) of this Regulation, a quantity up to the sum of total net removals and total net emissions from the combined land accounting categories included in the scope of Regulation [2018/841], may be taken into account for its compliance under Article 9 of this Regulation for that year, provided that:”
(ii) point (a) is replaced by the following:
“(a) the cumulative quantity taken into account for that Member State for the years 2021 to 2025 does not exceed half of the maximum amount of total net removals set out in Annex III to this Regulation for that Member State;
(aa) the cumulative quantity taken into account for that Member State for the years 2026 to 2030 does not exceed half of the maximum amount of total net removals set out in Annex III to this Regulation for that Member State;”;
(c) paragraph 2 is deleted;
(7) Article 8 is replaced by the following:
“Article 8
Corrective action
1. If the Commission finds, in its annual assessment under Article 29 of [Regulation 2018/1999] and taking into account the intended use of the flexibilities referred to in Articles 5, 6 and 7 of this Regulation, that a Member State is not making sufficient progress towards meeting its obligations under Article 4 of this Regulation, that Member State shall, within three months, submit to the Commission a corrective action plan that includes:
(a) a detailed explanation of why that Member State is not making sufficient progress towards meeting those obligations;
(b) an assessment of how Union funding has supported that Member State’s efforts towards meeting those obligations and of how it intends to use such funding to make progress towards meeting them;
(c) additional actions, complementing the integrated national energy and climate plan of that Member State pursuant to [Regulation 2018/1999] or reinforcing its implementation, that it is to implement in order to meet those obligations, through domestic policies and measures and the implementation of Union action, accompanied by a detailed assessment, which is underpinned by quantitative data, where available, of the envisaged greenhouse gas emission reductions resulting from those actions;
(d) a strict timetable for implementing such actions, which enables the assessment of annual progress in implementation.
…
3. The Commission may issue an opinion regarding the robustness of the corrective action plans submitted in accordance with paragraph 1 and shall in that case do so within four months of receipt of those plans. The Member State concerned shall take utmost account of the Commission’s opinion and may revise its corrective action plan accordingly. If the Member State concerned does not address the Commission’s opinion or a substantial part thereof, that Member State shall provide a justification to the Commission.
…”
…
(9) Article 15 is replaced by the following:
“Article 15
Review
1. This Regulation shall be kept under review taking into account, inter alia, evolving national circumstances, the manner in which all sectors of the economy contribute to the reduction of greenhouse gas emissions, international developments and efforts undertaken to achieve the long-term objectives of the Paris Agreement and of [the European Climate Law].
2. The Commission shall submit a report to the … Parliament and to the Council, within six months of each global stocktake agreed under Article 14 of the Paris Agreement, on the operation of this Regulation, including the balance between supply and demand for annual emission allocations, as well as on the suitability of the national greenhouse gas emission reduction targets contained in Annex I to this Regulation as regards their contribution to the Union’s climate objectives pursuant to [the European Climate Law] and to the goals of the Paris Agreement. That report shall include in particular an assessment of the need for additional Union policies and measures in view of the necessary greenhouse gas emission reductions by the Union and its Member States in a post-2030 framework. It shall also include an assessment of a reduction pathway for the greenhouse gas emissions covered by this Regulation that is compatible with the objective of climate neutrality at the latest by 2050, taking into account the projected indicative Union greenhouse gas budget referred to in Article 4(4) of [the European Climate Law] as well as the importance of promoting both fairness and solidarity among Member States and cost-effectiveness in achieving that objective. That report may be accompanied, if appropriate, by legislative proposals.
The report referred to in the first subparagraph shall take into account the long-term strategies of Member States prepared and submitted pursuant to Article 15(1) of Regulation [2018/1999] and the assessment thereof made by the Commission pursuant to Article 15(9) of that Regulation.”’
21 Point 1 of the Annex to the contested regulation amends the table in Annex I to Regulation 2018/842 as follows:
‘Annex I
Member State greenhouse gas emission reductions pursuant to Article 4(1)
|
|
Member State greenhouse gas emission reductions in 2030 in relation to their 2005 levels determined in accordance with Article 4(3) | ||
|
|
Column 1 |
Column 2 |
|
|
… |
… |
… |
|
|
Poland |
‑7% |
‑17.7% |
|
|
… |
… |
…’ |
|
The Better Law-Making Agreement
22 The Interinstitutional Agreement between the European Parliament, the Council of the European Union and the European Commission on Better Law-Making (OJ 2016 L 123, p. 1; ‘the Better Law-Making Agreement’) of 13 April 2016, contains Chapter III, entitled ‘Tools for better law-making’, points 12 to 16 of which state:
‘12. The three Institutions agree on the positive contribution of impact assessments in improving the quality of Union legislation.
Impact assessments are a tool to help the three Institutions reach well-informed decisions and not a substitute for political decisions within the democratic decision-making process. Impact assessments must not lead to undue delays in the law-making process or prejudice the co-legislators’ capacity to propose amendments.
Impact assessments should cover the existence, scale and consequences of a problem and the question whether or not Union action is needed. They should map out alternative solutions and, where possible, potential short and long-term costs and benefits, assessing the economic, environmental and social impacts in an integrated and balanced way and using both qualitative and quantitative analyses. The principles of subsidiarity and proportionality should be fully respected, as should fundamental rights. Impact assessments should also address, whenever possible, the “cost of non-Europe” and the impact on competitiveness and the administrative burdens of the different options, having particular regard to [small and medium-sized enterprises (SMEs)] (“Think Small First”), digital aspects and territorial impact. Impact assessments should be based on accurate, objective and complete information and should be proportionate as regards their scope and focus.
13. The Commission will carry out impact assessments of its legislative and non-legislative initiatives, delegated acts and implementing measures which are expected to have significant economic, environmental or social impacts. The initiatives included in the Commission Work Programme or in the joint declaration will, as a general rule, be accompanied by an impact assessment.
In its own impact assessment process, the Commission will consult as widely as possible. The Commission’s Regulatory Scrutiny Board will carry out an objective quality check of its impact assessments. The final results of the impact assessments will be made available to the […] Parliament, the Council and national parliaments, and will be made public along with the opinion(s) of the Regulatory Scrutiny Board at the time of adoption of the Commission initiative.
14. The … Parliament and the Council, upon considering Commission legislative proposals, will take full account of the Commission’s impact assessments. To that end, impact assessments shall be presented in such a way as to facilitate the consideration by the … Parliament and the Council of the choices made by the Commission.
15. The … Parliament and the Council will, when they consider this to be appropriate and necessary for the legislative process, carry out impact assessments in relation to their substantial amendments to the Commission’s proposal. The […] Parliament and the Council will, as a general rule, take the Commission’s impact assessment as the starting point for their further work. The definition of a “substantial” amendment should be for the respective Institution to determine.
16. The Commission may, on its own initiative or upon invitation by the … Parliament or the Council, complement its own impact assessment or undertake other analytical work it considers necessary. When doing so, the Commission will take into account all available information, the stage reached in the legislative process and the need to avoid undue delays in that process. The co-legislators will take full account of any additional elements provided by the Commission in that context.’
Forms of order sought and procedure before the Court of Justice
23 The Republic of Poland claims that the Court should:
– annul the contested regulation in its entirety; and
– order the Parliament and the Council to pay the costs.
24 The Parliament contends that the Court should:
– dismiss the action; and
– order the Republic of Poland to pay the costs.
25 The Council contends that the Court should:
– dismiss the action in its entirety as unfounded; and
– order the Republic of Poland to pay the costs.
26 By decision of the President of the Court of 15 November 2023, the Commission was granted leave to intervene in support of the form of order sought by the Parliament and the Council.
The action
27 The Republic of Poland puts forward four pleas in law in support of its action, alleging infringement of: (i) point (c) of the first subparagraph of Article 192(2) TFEU; (ii) the principle of energy solidarity, laid down in Article 194(1)(b) TFEU; (iii) the principle of proportionality, laid down in Article 5(4) TEU; and (iv) the principle of sincere cooperation., laid down in Article 4(3) TEU.
First plea in law: infringement of point (c) of the first subparagraph of Article 192(2) TFEU
Arguments of the parties
28 By its first plea in law, the Republic of Poland submits that, by adopting the contested directive on the basis of Article 192(1) TFEU, the EU legislature infringed point (c) of the first subparagraph of Article 192(2) TFEU, under which, by way of an exception to the decision-making procedure provided for in Article 192(1) TFEU, the Council must act unanimously when adopting measures significantly affecting a Member State’s choice between different energy sources and the general structure of its energy supply.
29 It claims, in essence, that that regulation will have a significant impact on the freedom of Member States in determining the structure of their energy supply, with the result that it should have been adopted on the basis of point (c) of the first subparagraph of Article 192(2) TFEU, in accordance with the principle of lex specialis; otherwise that provision will remain a dead letter. Thus, when the EU legislature draws up a draft legislative act on the basis of Article 192(1) TFEU, it is required to examine beforehand whether the conditions laid down in point (c) of the first subparagraph of Article 192(2) TFEU are satisfied. That examination should be set out explicitly in the travaux préparatoires for that draft, so that the Court is able to exercise its power of review.
30 Moreover, the determination of the legal basis for an act must be based on objective factors which include the aim and content of the measure. Those, however, are not the only or most important factors that must be taken into account. In the present case, account must be taken of the actual effects of the implementation of the environmental measures provided for by the contested regulation, not the aims pursued at the time of its adoption. Only that interpretation is capable of enabling the Court to exercise its power of review of whether the EU legislature has made a manifest error, misused its power or manifestly exceeded the limits of its discretion.
31 In that regard, contrary to what the Court of Justice held in its judgment of 21 June 2018, Poland v Parliament and Council (C‑5/16, EU:C:2018:483, paragraph 42), point (c) of the first subparagraph of Article 192(2) TFEU should apply as soon as a measure significantly affects a Member State’s choice between different energy sources and the general structure of its energy supply, and not only where the ‘principal aim’ of that measure is significantly to affect such a choice. Since that provision expressly lays down the criterion of the effect of the act in order for the exception that it provides for to apply, it would be contra legem to replace that criterion with that of the aim and content of the measure. The Republic of Poland adds that the criterion of the effect of the act is, moreover, used for the application of certain legislative procedures in given areas of EU law, such as those relating to competition law or the freedoms of movement.
32 Otherwise, it would be sufficient for the institution, which is the author of an EU act, to claim, in the act itself, that its principal objective is not to influence the choice of a Member State between different sources of energy in order to justify the fact that point (c) of the first subparagraph of Article 192(2) TFEU does not constitute its legal basis. However, that interpretation runs counter to settled case-law according to which the choice of the legal basis for a legal act of the European Union cannot be based on the subjective intention of the EU institutions.
33 In any event, it follows from paragraph 42 of that judgment that the assessment by the EU legislature of the effects of an act is relevant only in relation to the aim and content of that act for the purposes of examining an infringement of point (c) of the first subparagraph of Article 192(2) TFEU. Thus, since the main objective or main effect of the contested regulation is to affect a Member State’s choice between different energy sources and the general structure of its energy supply, it should have been adopted on the basis of that provision.
34 Increasing the Union’s greenhouse gas emission reduction target for 2030 from 30% to 40% in the sectors covered by Regulation 2018/842, and increasing the reduction target set for the Republic of Poland in those sectors, as provided for in Article 1(1) of and Annex I to the contested regulation, respectively, affects the structure of its energy supply. Those increases force the Member States, given the effect of that regulation on cost-effectiveness, to stop relying on fossil fuels, in particular coal, in their national energy supplies. Thus, it is apparent from recital 16 of that regulation that increasing the level of the reduction of greenhouse gas emissions affects the cost-effectiveness of electricity and heat generation from coal, and is intended to discourage the use of that energy source.
35 According to the Republic of Poland, the aim of the contested regulation should also be analysed in the light of the overall aim of the ‘Fit for 55’ legislative package, which is a comprehensive set of mutually reinforcing measures and initiatives aimed at achieving climate neutrality in the European Union by 2050. However, that package imposes such a high level of reduction in greenhouse gas emissions that its implementation incentivises Member States to stop using fossil fuels, including coal.
36 More specifically, the contested regulation significantly affects the Republic of Poland’s decisions in choosing between different energy sources, the operation of undertakings in the energy sector and citizens’ choice of those sources, which restricts that Member State’s right to determine freely the conditions for the use of its energy resources, to choose between different energy sources and to determine the general structure of its energy supply. That regulation also significantly affects the waste management, road transport, construction and agricultural economic sectors, and requires radical changes to be made in those sectors, which has serious economic and social consequences.
37 The fact that the contested regulation is intended to amend Regulation 2018/842, which was adopted on the basis of Article 192(1) TFEU, is irrelevant. Apart from the fact that an amending act need not necessarily be adopted on the same legal basis as the act it amends, the respective contexts in which Regulation 2018/842 and the contested regulation were adopted differ, given that the former was adopted before the COVID-19 pandemic and before the Federation of Russia’s war of aggression against Ukraine, and that the economic consequences of setting the level of reduction in greenhouse gas emissions at 30%, as introduced by that first regulation, were not known.
38 Lastly, the Republic of Poland disputes the statement, contained in the judgment of 21 June 2018, Poland v Parliament and Council (C‑5/16, EU:C:2018:483, paragraph 41), that the assumptions as to the likely impact of a measure on which the EU legislature bases its choices are, by their nature, speculative, and thus are in no way objective factors amenable to judicial review. That interpretation would render the preparation of an impact assessment superfluous and infringe the Better Law-Making Agreement.
39 The Parliament and the Council, supported by the Commission, contend that the first plea in law must be rejected as unfounded.
Findings of the Court
40 By its first plea in law, the Republic of Poland submits, in essence, that the contested regulation should have been adopted on the basis of point (c) of the first subparagraph of Article 192(2) TFEU.
41 In that regard, it should be borne in mind that the selection of point (c) of the first subparagraph of Article 192(2) TFEU as the legal basis for a measure is based on the same factors as those consistently taken into account by the Court in its case-law (judgment of 21 June 2018, Poland v Parliament and Council, C‑5/16, EU:C:2018:483, paragraphs 37 to 39).
42 The Court has repeatedly held, first, that the choice of the legal basis for a measure may not depend simply on an institution’s conviction as to the aim pursued but must rest on objective factors which are amenable to judicial review, such as the aim and content of the measure itself (see, to that effect, judgments of 26 March 1987, Commission v Council, 45/86, EU:C:1987:163, paragraph 11; of 29 April 2004, Commission v Council, C‑338/01, EU:C:2004:253, paragraph 54; and of 16 February 2022, Poland v Parliament and Council, C‑157/21, EU:C:2022:98, paragraph 121).
43 If the choice of the legal basis for a legislative measure depended on the assessment of its likely effects, which, by its nature, is speculative, only an ex post analysis would make it possible to ascertain the real and specific effects of such a measure. That assessment cannot therefore in any way constitute an objective factor amenable to judicial review (see, to that effect, judgment of 21 June 2018, Poland v Parliament and Council, C‑5/16, EU:C:2018:483, paragraph 41).
44 Furthermore, it is settled case-law that the legality of an EU act cannot depend on retrospective considerations of its efficacy (judgments of 7 February 1973, Schroeder, 40/72, EU:C:1973:14, paragraph 14; of 5 October 1994, Crispoltoni and Others, C‑133/93, C‑300/93 and C‑362/93, EU:C:1994:364, paragraph 43; and of 12 July 2001, Jippes and Others, C‑189/01, EU:C:2001:420, paragraph 84).
45 It follows that the assessment of the expected effect of an EU act on the energy policy of a Member State may be taken into consideration only in the context of the assessment of the aim or content of that act (see, to that effect, judgment of 21 June 2018, Poland v Parliament and Council, C‑5/16, EU:C:2018:483, paragraph 42).
46 Secondly, the choice of the legal basis for a measure may also be based on its context, provided that that context is capable of shedding light on the objective pursued by that measure (see, to that effect, judgments of 27 February 2014, United Kingdom v Council, C‑656/11, EU:C:2014:97, paragraph 50; of 3 December 2019, Czech Republic v Parliament and Council, C‑482/17, EU:C:2019:1035, paragraph 32; of 8 December 2020, Hungary v Parliament and Council, C‑620/18, EU:C:2020:1001, paragraph 39; and of 16 February 2022, Poland v Parliament and Council, C‑157/21, EU:C:2022:98, paragraph 122).
47 In that regard, a distinction must be drawn between an act analogous to a pre-existing act and an act which amends a pre-existing act. According to the Court of Justice’s settled case-law, the legal basis for a measure must be determined autonomously, having regard to its own aim and content, and not to the legal basis used for the adoption of other EU measures that might, in certain cases, display similar characteristics (judgments of 10 January 2006, Commission v Parliament and Council, C‑178/03, EU:C:2006:4, paragraph 55, and of 21 June 2018, Poland v Parliament and Council, C‑5/16, EU:C:2018:483, paragraph 49). By contrast, in the case of a measure amending existing rules, it is important to take into account, for the purposes of identifying the legal basis for that measure, the existing rules which it amends and, in particular, their objective and content (judgments of 3 December 2019, Czech Republic v Parliament and Council, C‑482/17, EU:C:2019:1035, paragraph 42, and of 8 December 2020, Hungary v Parliament and Council, C‑620/18, EU:C:2020:1001, paragraph 40).
48 Thirdly, if the examination of an EU measure reveals that it pursues several purposes or that it comprises several components and if one of those purposes or components is identifiable as the main or predominant purpose or component, whereas the others are merely incidental or are only extremely limited in scope, the legal basis for adopting that measure must be determined in accordance with that main purpose or component (see, to that effect, judgments of 23 February 1999, Parliament v Council, C‑42/97, EU:C:1999:81, paragraphs 39 and 40; of 8 December 2020, Hungary v Parliament and Council, C‑620/18, EU:C:2020:1001, paragraph 38; and of 21 March 2024, Landeshauptstadt Wiesbaden, C‑61/22, EU:C:2024:251, paragraph 47).
49 Fourthly, a broad interpretation of the first subparagraph of Article 192(2) TFEU would risk having the effect of turning recourse to the special legislative procedure into the general rule, whereas the FEU Treaty intended it to be an exception. In accordance with the principle that exceptions must be interpreted strictly, point (c) of the first subparagraph of Article 192(2) TFEU can form the legal basis of an EU measure only if it follows from the aim and content of that measure that the primary outcome sought by that measure is significantly to affect a Member State’s choice between different energy sources and the general structure of the energy supply of that Member State (judgment of 21 June 2018, Poland v Parliament and Council, C‑5/16, EU:C:2018:483, paragraphs 44 to 46).
50 In the present case, the contested regulation amends Regulation 2018/842, in particular by inserting new provisions, with the result that the latter constitutes the legal context of which the contested regulation forms part. Accordingly, it is necessary, in accordance with the case-law referred to in paragraph 47 of the present judgment, to identify the legal basis on which the contested regulation had to be adopted, taking into account both the context established by Regulation 2018/842 and the legislation resulting from the amendments made to it by the contested regulation.
51 Recitals 1 to 4, 6 to 8 and 11 to 18 of the contested regulation confirm that it pursues the same purpose as the regulation it amends, namely to reduce net greenhouse gas emissions in 2030 compared to1990 levels in the sectors covered by those regulations, with a view to achieving the objectives of the Paris Agreement.
52 Indeed, as set out in recitals 1 to 6 of Regulation 2018/842, recitals 1 to 4 of the contested regulation state that, in order to limit the rise in global average temperature to well below 2 °C above pre-industrial levels and to pursue efforts to limit that rise to 1.5 °C above pre-industrial levels, the Union has established a regulatory framework, of which Regulation 2018/842 forms part, which sets national greenhouse gas emission reduction targets by 2030 in sectors not covered by either Directive 2003/87 or Regulation 2018/841.
53 It is true that the EU legislature referred in recital 2 of Regulation 2018/842 to setting the ‘reductions in the … [non-EU ETS] sectors amounting to … 30% … by 2030 compared to 2005’ and stated that ‘all sectors of the economy should contribute [thereto]’, by setting ‘annually binding national limits’, as referred to in recital 18 of that regulation, and by determining, as referred to in recital 17 of that regulation, the ‘greenhouse gas emissions reduction of each Member State for 2030 … in relation to the level of its 2005 reviewed greenhouse gas emissions’. However, recital 6 of the contested regulation states, in essence, that, in adopting the European Climate Law, the Union ‘has enshrined in legislation a binding objective of economy-wide climate neutrality by 2050’ and that, in Article 4(1) of that law, it has also set for itself a ‘binding Union domestic reduction target for net greenhouse gas emissions … of at least 55% compared to 1990 levels by 2030’.
54 Under recitals 7 and 13 of that regulation, meeting those commitments requires that ‘the Union regulatory framework for achieving the 2030 greenhouse gas emission reduction target should be adapted’ by progressively reducing the greenhouse gas emissions of the ‘sectors covered by Regulation [2018/842] … until they reach ‑40% in 2030 compared to 2005 levels’.
55 Recital 13 states that ‘achieving the objectives of the Paris Agreement, as well as the Union’s objective of climate neutrality at the latest by 2050 … requires convergence of all Member States’ efforts over time, while taking into account specific national circumstances’. In that regard, recitals 11 and 14 of the contested regulation both state that the ‘increased’ 2030 overall greenhouse gas emission reduction target ‘can only be achieved with the contribution of all sectors’ and that that target initially ‘laid down in [Regulation 2018/842] needs to be revised for each Member State’. Recital 18 of the contested regulation adds that ‘Member States should be able to reduce progressively their greenhouse gas emissions and reach their increased national greenhouse gas emission reduction targets for 2030 in a cost-effective manner’ and that, in order to reach that target, that regulation requires ‘new and more stringent annual emission allocations’ and increases ‘the existing ceilings on transfers of annual emission allocations between Member States’.
56 Moreover, recital 28 of Regulation 2018/842 stated that that regulation ‘should be reviewed as of 2024 and every five years thereafter in order to assess its overall functioning, in particular with regard to the need for increased stringency of Union policies and measures’. Thus, at the time that regulation was adopted, the EU legislature had envisaged the possibility of amending it in order to improve its overall functioning and to adopt more stringent measures if necessary.
57 That is precisely the ambition of the contested regulation. It is set against a new backdrop, characterised, on the one hand, by the urgency and necessity of stepping up the Union’s efforts to adopt measures aimed at accelerating the reduction of greenhouse gas emissions and, on the other hand, by the adoption of the European Climate Law, Article 4(1) of which sets a binding target to reduce net greenhouse gas emissions in the Union by at least 55% by 2030 compared to 1990 levels, and Article 2(1) of which provides for those emissions to be reduced to zero in the Union by 2050 at the latest.
58 It follows that the contested regulation is designed to further the objectives of the Paris Agreement and is fully in line with Regulation 2018/842 in seeking to address the climate and environmental challenges facing the Union.
59 As regards the content of the contested regulation, it is important to note that the provisions thereof do not, in and of themselves and primarily, have as their object the establishment of measures which significantly affect a Member State’s choice between different energy sources or the general structure of its energy supply, but have, at most, indirect and incidental effects on the general structure of Member States’ energy supply (see, by analogy, judgment of 23 February 1999, Parliament v Council, C‑42/97, EU:C:1999:81, paragraph 63).
60 As observed in paragraph 49 of the present judgment, it should be borne in mind that, in accordance with the principle of strict interpretation of exceptions, point (c) of the first subparagraph of Article 192(2) TFEU can form the legal basis of an EU measure only if it follows from the aim and content of that measure that the primary outcome sought by that measure is significantly to affect a Member State’s choice between different energy sources and the general structure of the energy supply of that Member State.
61 In the present case, it is apparent, in the first place, from Article 1 of Regulation 2018/842, as amended by the contested regulation (‘Regulation 2018/842, as amended’), that Regulation 2018/842, as amended, lays down, first, for the Member States, obligations relating to their minimum contributions for the period from 2021 to 2030, with a view to achieving the Union’s target of reducing its greenhouse gas emissions by 40% by 2030 compared to 2005 levels in the sectors covered by Article 2 of that Regulation and, secondly, rules on the determination of annual greenhouse gas emission allowances, as well as rules on the assessment of Member States’ progress towards meeting their minimum contributions. Consequently, the object of Regulation 2018/842, as amended, as set out in Article 1 thereof, differs from that of Regulation 2018/842 only in terms of the heightened ambition pursued by the EU legislature, consisting in setting the target for reducing greenhouse gas emissions at ‑40% by 2030 compared to 2005 levels, whereas it had previously been set at ‑30% by Regulation 2018/842.
62 In the second place, Article 2 of Regulation 2018/842, as amended, specifies that its scope includes greenhouse gas emissions from IPCC source categories of energy, industrial processes and product use, agriculture and waste, to the exclusion of greenhouse gas emissions resulting from the activities listed in Annex I to Directive 2003/87; in that respect, it does not differ from what was, in essence, provided for by Article 2 of Regulation 2018/842. The only difference between those two regulations, in terms of their respective scopes, is that the contested regulation covers part of the maritime transport sector.
63 In the third place, the wording of Article 4 of Regulation 2018/842, as amended, as it stands following the amendments made by Article 1(3) of the contested regulation, is very similar to that of Article 4 of Regulation 2018/842. Indeed, in addition to referring to the greenhouse gas emission reduction target set for each Member State for the period from 2021 to 2030, it also sets out a method for calculating those emissions which is very similar to that established by Article 4(2) of Regulation 2018/842, in that it takes into account the flexibilities provided for in Articles 5 to 7 of the Regulation 2018/842, as amended, as well as the adjustment mechanism provided for in Article 10(2) of that regulation, it takes account of the deduction resulting from Article 7 of that Regulation, and it requires Member States to adhere to a linear trajectory for the reduction of those emissions. In that regard, Article 4(2) of Regulation 2018/842, as amended, differs from Article 4(2) of Regulation 2018/842, in that it divides the period from 2021 to 2030 into three ‘sub-periods’ for which the linear trajectory is determined on the basis of ‘updated’ data.
64 In the fourth place, Article 1(4) and (5) of the contested regulation amends Articles 5 and 6 of Regulation 2018/842 concerning flexibility mechanisms, by reducing the rates at which those allowances are withdrawn and placed in reserve, or by increasing the rates at which those allowances are transferred.
65 In the fifth place, Article 7 of Regulation 2018/842, as amended, is, in essence, very similar to Article 7 of Regulation 2018/842 that it amends. Whilst the latter made the possibility of using the net greenhouse gas removals generated by the LULUCF sector for the period from 2021 to 2030 subject to certain conditions set out in paragraph 2(a) to (e), Regulation 2018/842, as amended, identifies two ‘sub-periods’ – namely, the period from 2021 to 2025 and the period from 2026 to 2030, for the use of those net greenhouse gas removals. That division of the period from 2021 to 2030 into two ‘sub-periods’ is therefore intended to ensure that Member States adopt a strategy to increase their total net removals, as set out in Annex III to Regulation 2018/842, as amended, over that 10-year period, following a trajectory that enables Member States to focus their efforts more evenly throughout that period and, consequently, meet their final target sustainably by the end of that same period.
66 In the sixth place, Article 1(7) of the contested regulation supplements Article 8 of Regulation 2018/842 concerning the corrective measures a Member State must take where it fails to comply with the obligations laid down in Article 4 of that regulation, without, however, altering its nature or scope.
67 In the seventh and last place, Article 1(9) of the contested regulation replaces Article 15 of Regulation 2018/842, entitled ‘Review’, with new provisions, requiring that the content of the report which the Commission is to submit to the Parliament and the Council on the functioning of that regulation cover new aspects, in particular the relevance of the national greenhouse gas emission reduction targets as regards their contribution to the achievement of the Union’s climate objectives, and also the assessment of the greenhouse gas emission reduction trajectory under that regulation.
68 Hence it is apparent from both its object and its content that the contested regulation is not intended to lay down measures which significantly affect a Member State’s choice between different energy sources or the general structure of its energy supply. It follows that the choice of Article 192(1) TFEU as the legal basis for that regulation is not incorrect and that point (c) of the first subparagraph of Article 192(2) TFEU could not constitute the legal basis on which the contested regulation was to be adopted.
69 As regards the argument that the EU legislature failed to state the reasons why it had ruled out point (c) of the first subparagraph of Article 192(2) TFEU as the legal basis for the contested regulation, suffice it to note that, in accordance with the case-law referred to in paragraph 42 of the present judgment, the legal basis of an act is determined by reference to the specific aim and content of the act in question, and that it is in the light of those factors that the appropriate legal basis must be identified.
70 Furthermore, it should be noted that no provision of EU law requires the EU institutions to state the reasons why they do not rely on Article 192(2) TFEU as the legal basis for an EU act, provided that the choice of Article 192(1) TFEU appears to be duly justified. Indeed, the choice of a legal basis implies, by definition, that the other potential legal bases, which might have served as a basis for that act, were not deemed appropriate.
71 Similarly, in accordance paragraph 45 of the present judgment, the assessment of the expected effect of an EU act on the energy policy of a Member State may be taken into consideration only in the context of the assessment of the aim or content of that act. Consequently, the argument that the EU legislature did not examine the effects of the proposed measures in sufficient detail and comprehensively cannot be assessed in isolation.
72 Lastly, nor can the wording of recital 16 of the contested regulation be relied upon to argue that, in adopting that regulation, the EU legislature sought to discourage the use of fossil fuels. Indeed, in that recital, the EU legislature explains that, in addition to the acceleration of the phase-out of those fuels brought about by the adoption of the recovery programme, the outbreak of the COVID-19 pandemic and the Federation of Russia’s war of aggression against Ukraine are events which gave rise to uncertainty as to their impact on greenhouse gas emissions and led to the need to provide for a review of the data relating to those emissions in 2025 and, if necessary, an update in 2025 of the annual allowances for those emissions for the years 2026 to 2030. To argue that, in doing so, the EU legislature sought to discourage the use of those fuels is therefore based on a partial and incorrect reading of that recital.
73 In the light of the foregoing considerations, the Republic of Poland’s first plea in law must be rejected as unfounded.
Second plea in law: infringement of the principle of energy solidarity laid down in Article 194(1)(b) TFEU
Arguments of the parties
74 By its second plea in law, the Republic of Poland submits that the contested regulation infringes the principle of energy solidarity laid down in Article 194(1)(b) TFEU. It submits that the concept of energy solidarity must be taken into consideration jointly with the principle of sincere cooperation, laid down in Article 4(3) TEU.
75 In the first place, it submits that the contested regulation has a deterrent effect on the use of fossil fuels and could lead to the bankruptcy of numerous undertakings in the energy sector which use fossil fuels, including coal, to generate electricity. In so doing, that regulation would jeopardise the energy supply of Member States whose energy system is highly dependent on the use of those fuels. The Court of Justice has recognised the serious risk posed by the interruption of the supply from an energy source to the public security of a Member State (judgment of 10 July 1984, Campus Oil and Others, 72/83, EU:C:1984:256).
76 In the second place, in adopting the contested regulation, the EU legislature infringed the principle of energy solidarity referred to in Article 194(1) TFEU, by failing to take account of the interests of the Member States, such as those of the Republic of Poland, and by failing to include any balancing of the interests of the European Union and those of the various Member States where they conflict (judgment of 15 July 2021, Germany v Poland, C‑848/19 P, EU:C:2021:598, paragraph 73). Even though it was formally adopted as part of the EU’s environmental policy, the contested regulation undoubtedly relates to its energy policy.
77 Moreover, the Republic of Poland submits that, by also failing to include a comparative analysis of the interests of the European Union and those of the Member States liable to be affected, or any balancing of those interests where they conflict, the Commission document COM(2021) 555 final of 14 July 2021 Proposal for a regulation of the European Parliament and of the Council amending Regulation (EU) 2018/842 on binding annual greenhouse gas emission reductions by Member States from 2021 to 2030 contributing to climate action to meet commitments under the Paris Agreement, also infringed the principle of energy solidarity.
78 Moreover, the mere reference, in recital 12 of the contested regulation, to the Council’s conclusions of 11 December 2020, to the effect that the 2030 greenhouse gas emission reduction target will be delivered collectively by the Union in the most cost-effective manner possible, that ‘all Member States will participate in that effort, taking into account considerations of fairness and solidarity … and that the new 2030 target needs to be achieved in a way that preserves the Union’s competitiveness and takes account of Member States’ different starting points and specific national circumstances and greenhouse gas emission reduction potential, … as well as efforts made’, does not suffice for compliance with the principle of energy solidarity or reflect a balancing of interests.
79 The contested regulation was accordingly adopted contrary to the principle of energy solidarity and should be annulled.
80 The Parliament and the Council, supported by the Commission, contend that this plea in law must be rejected as unfounded.
Findings of the Court
81 By its second plea in law, the Republic of Poland submits, by way of principal argument, that the contested regulation infringes the principle of energy solidarity laid down in Article 194(1)(b) TFEU and, in the alternative, that it infringes the general principle of solidarity.
82 That said, it should be borne in mind that Article 194(1) TFEU provides that, in the context of the establishment and functioning of the internal market and with regard for the need to preserve and improve the environment, European Union policy on energy is to aim, in a spirit of solidarity between Member States, to ensure the functioning of the energy market, ensure security of energy supply in the European Union, promote energy efficiency and energy saving and the development of new and renewable forms of energy and promote the interconnection of energy networks.
83 In that regard, the Court has held that the principle of energy solidarity, referred to in that provision, is a specific expression, in the field of energy, of the principle of solidarity. As is apparent from the wording and structure of Article 194(1) TFEU, the principle of energy solidarity forms the basis of all of the objectives of the European Union’s energy policy, serving as the thread that brings them together and gives them coherence, so that acts adopted by the EU institutions under that policy must be interpreted, and their legality assessed, in the light of that principle (see, to that effect, judgment of 15 July 2021, Germany v Poland, C‑848/19 P, EU:C:2021:598, paragraphs 38, 43 and 44).
84 It follows that that principle is relevant for assessing the lawfulness of acts adopted by the Union in the field of energy policy, but not for assessing the lawfulness of acts adopted by the Union in the field of other policies, such as environmental protection. As noted in paragraph 68 of the present judgment, the contested regulation was, correctly, adopted on the basis of Article 192(1) TFEU and falls not within the sphere of energy policy, but rather that of environmental protection.
85 Therefore, the argument to the effect that the contested regulation infringes the principle of energy solidarity provided for in Article 194(1) TFEU can only be rejected as ineffective.
86 The Republic of Poland submits, in the alternative, that the contested regulation infringes the general principle of solidarity. In that regard, it should be noted that that principle constitutes one of the fundamental principles of EU law, which underpins the entire legal system of the European Union and is closely linked to the principle of sincere cooperation, laid down in the first subparagraph of Article 4(3) TEU, pursuant to which the European Union and the Member States are, in full mutual respect, to assist each other in carrying out tasks which flow from the Treaties (see, to that effect, judgment of 15 July 2021, Germany v Poland, C‑848/19 P, EU:C:2021:598, paragraphs 38 and 41 and the case-law cited).
87 That said, the Republic of Poland’s argument, alleging infringement of the general principle of solidarity inasmuch as the EU legislature failed to take account of the interests of the Member States and balance them with those of the Union, cannot succeed.
88 It is apparent, first, from recital 12 of the contested regulation, which refers to the conclusions of the European Council of 11 December 2020, that the new greenhouse gas emission reduction target for 2030 must be achieved collectively by the Union ‘in the most cost-effective manner possible, [and] all Member States will participate in that effort, taking into account considerations of fairness and solidarity, while leaving no one behind’, and also ‘Member States’ different starting points and specific national circumstances and greenhouse gas emission reduction potential’.
89 Secondly, it is apparent from the very aim of the national greenhouse gas emission targets, as amended by Article 1(1) and (3) of the contested regulation, now laid down in Articles 1 and 4 of Regulation 2018/842, as amended, as well as from the revision of the levels of those targets, set at different levels in Annex I to that regulation, that the EU legislature took account of the respective capacities of the Member States and, consequently, of their interests.
90 Similarly, Article 1(9) of the contested regulation, which replaces Article 15 of Regulation 2018/842 with new provisions, also reflects the fact that the EU legislature intended to take account of the Member States’ interests by including a provision providing for a review of that regulation in order to take account of changes in the national context, the manner in which all sectors of the economy contribute to the reduction of greenhouse gas emissions, international developments, and the efforts undertaken to achieve the long-term objectives of the Paris Agreement and the European Climate Law. In that regard, the report to be presented by the Commission to the Parliament and the Council under Article 15(2) of Regulation 2018/842, as amended, is to include an assessment of a reduction pathway for the greenhouse gas emissions covered by that regulation that is compatible with the objective of climate neutrality at the latest by 2050, taking into account the projected indicative Union greenhouse gas budget referred to in Article 4(4) of the European Climate Law, as well as the importance of promoting both fairness and solidarity among Member States.
91 Thirdly, the Republic of Poland’s argument also conflicts with the wording of the Commission staff working document of 14 July 2021, entitled ‘Impact Assessment Report accompanying the document Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) 2018/842 on binding annual greenhouse gas emission reductions by Member States from 2021 to 2030 contributing to climate action to meet commitments under the Paris Agreement’ (‘the impact assessment’), which makes several references to taking into account the situation of the various Member States in order to set separate targets for them (see sections 1.1, 1.3, 2.1, 4.2, 6.1.2 and 8 of the impact assessment).
92 Thus, in section 1.1 of the impact assessment, which describes the overall policy context, the Commission notes that, following the adoption of the European Climate Law, the December 2020 European Council asked for delivering the greenhouse gas emission reduction target collectively by the European Union in the most cost-effective manner possible, preserving the European Union’s competitiveness and ‘taking account of Member States’ different starting points, specific national circumstances and emission reduction potential’.
93 In section 1.3 of that assessment, which describes the key aspects of Regulation 2018/842, the Commission states that that regulation ‘sets “minimum contributions” in the form of binding national emission reduction targets for each Member State for the period from 2021 to 2030’ according to a ‘distribution key … based on economic capacity, i.e. [gross domestic product (GDP)] per capita, with some limited adjustments to reflect cost-efficiency in a fair and balanced manner’.
94 Section 2.1 of the impact assessment, which identifies the problems and factors relating to the Union 2030 climate ambition, states that ‘fairness and cost efficiency remain key principles for [Regulation 2018/842]’, the implementation of which ‘includes a target setting approach that takes into account differences in capacity to act while considering adjustments to take into account specific national circumstances’. Although Regulation 2018/842 ‘differentiat[ed] national targets according to relative differences in GDP per capita’, the Commission observed that ‘setting targets based solely on GDP per capita may result in large differences in the costs per ton reduced [greenhouse gas] emissions between Member States if the reductions have to be achieved domestically, and might induce very costly efforts for those higher income Member States with more limited remaining mitigation potentials’. For that reason, in that regulation, ‘the targets for [those Member States] have been relatively adjusted to reflect cost-efficiency in a fair and balanced manner’, and the Commission made provision for the need to reassess that question ‘in the context of the higher ambition’.
95 Similarly, section 4.2 of the impact assessment, which addresses specific objectives for the review of Regulation 2018/842, states that that review was undertaken in view of, inter alia, the specific objective consisting in having ‘additional efforts … shared in a consistent, fair and equitable manner between Member States’ and that ‘fairness is a core principle of [Regulation 2018/842]’.
96 Section 6.1.2 of the impact assessment, entitled ‘national targets and distributional impacts in [Regulation 2018/842]’, also states that the ‘national targets under [Regulation 2018/842] for 2030 … are based on differentiation of efforts depending on relative GDP per capita for 2013’ and that the majority of stakeholders were of the view ‘that the ambition increase … should be in line with the cost effective reduction potential’. It is also stated therein that that majority of parties considered that fairness and cost-efficiency were ‘the key parameters for setting national targets in [Regulation 2018/842], taking into account specific national circumstances’.
97 Lastly, in section 8 of the impact assessment, relating to the preferred option, it is stated that ‘increasing the national targets under Regulation [2018/842] will require revisiting fairness and cost efficiency within the instrument’, that ‘as regards fairness, the assessment concludes that an update of the target setting approach based on GDP per capita is still appropriate, while applying a limited amount of targeted corrections to address cost efficiency concerns’, and that ‘overall this will drive towards convergence of per capita emissions in these sectors across the [European Union]’.
98 It follows from the considerations set out in paragraphs 93 to 98 of the present judgment that the Member States’ interests were indeed taken into account in the impact assessment.
99 Fourthly, the argument based on the judgment of 10 July 1984, Campus Oil and Others (72/83, EU:C:1984:256), is irrelevant to the assessment of observance of the principle of solidarity, since that judgment did not concern that principle, but solely the question of whether a Member State could, without infringing the principle of the free movement of goods, adopt national legislation aimed at remedying the consequences of a disruption to the supply of petroleum products for the very existence of that State, by imposing on importers of petroleum products an obligation to purchase those products at prices fixed on the basis of costs incurred by a refinery situated within the territory of that State. Furthermore, the import of that judgment is all the more limited given that it was delivered before any objectives relating to the environment or the principle of energy solidarity were introduced into the Treaties.
100 Fifthly, it should also be borne in mind that the application of the principle of energy solidarity does not mean that an EU act must never, under any circumstances, have negative impacts for the particular interests of a Member State in that field (see, by analogy, judgment of 15 July 2021, Germany v Poland, C‑848/19 P, EU:C:2021:598, paragraph 73).
101 In that regard, the Court finds that the Republic of Poland’s assertion that the contested regulation has a deterrent effect on the use of fossil fuels and could thus lead to the bankruptcy of numerous energy sector undertakings that use fossil fuels to generate electricity, as referred to in paragraph 75 of the present judgment, is in no way substantiated and must accordingly be rejected.
102 It follows that, contrary to the claims of the Republic of Poland, the interests of each Member State were indeed taken into account and weighed up against those of the other Member States and of the Union as a whole when the EU legislature made its distribution of the efforts to reduce greenhouse gas emissions at the time the contested regulation was adopted.
103 The second plea in law must accordingly be rejected as unfounded.
Third plea in law: infringement of the principle of proportionality laid down in Article 5(4) TEU
Arguments of the parties
104 By its third plea in law, the Republic of Poland submits, in essence, that the adoption of the contested regulation infringes the principle of proportionality laid down in Article 5(4) TEU.
105 That plea in law in broken down into three parts: (i) insufficient and inaccurate impact assessment; (ii) unequal and unfair distribution of national greenhouse gas emission reduction targets, which lead to excessive social and economic costs for the Republic of Poland; and (iii) outdated data forming the basis of the impact assessment.
106 By the first part, the Republic of Poland submits that the impact assessment suffers from a number of shortcomings, thereby disregarding point 12 of the Better Law-Making Agreement, which requires an impact assessment for draft legislation to cover the existence, scale and consequences of a problem and to examine the question whether or not Union action is needed. It should also map out alternative solutions and, where possible, potential short and long-term costs and benefits, assessing the economic, environmental and social impacts in an integrated and balanced way on the basis of both qualitative and quantitative analyses. In failing to rectify the shortcomings of the impact assessment, the Parliament and the Council also infringed point 16 of that agreement. The contested regulation was thus adopted on the basis of an insufficient and inaccurate impact assessment.
107 First, that assessment is insufficient because the Commission rejected option 1.2, consisting in setting the greenhouse gas emission reduction target for the sectors coming under Regulation 2018/842 at a lower level, ‑35%, than the ‑40% set under the contested regulation. However, that lower target would have resulted, for the Republic of Poland, in a national greenhouse gas emission reduction target for the Republic of Poland of ‑11%, instead of ‑17.7%, as set out in the contested regulation, and would have avoided the excessively painful economic and social adjustments imposed by that regulation.
108 Secondly, the impact assessment effects an incorrect distribution of the national greenhouse gas emission reduction targets among the Member States. The distribution key used by the Commission is based on the GDP per capita criterion, which itself is adjusted for those Member States whose GDP per capita is highest in order to take account of cost efficiency. However, such an adjustment is questionable, given that the link between poor cost efficiency and the distribution of those targets is artificial. According to the Republic of Poland, it would have been sufficient to improve the flexibility mechanisms in order to improve cost efficiency. More specifically, that adjustment method led to a 0.7% increase in the greenhouse gas emission reduction target assigned to it.
109 Thirdly, the Commission failed to conduct a sufficient examination of the options enabling it to impose greater greenhouse gas emission reduction obligations on Member States with a higher GDP per capita. In so doing, it failed to take account of the scale of the greenhouse gas emission reduction targets assigned to the various Member States, which range from 0% to 60%, and to take sufficient account of the burden of the additional adjustment that would fall on Member States with the lowest GDP per capita, with the result that the reduction efforts required of the Republic of Poland are greater (‑31.7%) than the average for such efforts across the Union (‑30.7%).
110 Fourthly, contrary to point 12 of the Better Law-Making Agreement, the Commission failed to examine sufficiently the impact of the distribution of the new greenhouse gas emission reduction target among the Member States or show the specific impact of the implementation of a reduction target of ‑40% relative to the reference emission in 2005. Yet that information is essential for the poorest Member States. The absence of a cost-benefit analysis that could inform Member States as to the potential effectiveness of the measures to be taken at national level, as well as the absence of an analysis of the anticipated costs arising from greenhouse gas emission reductions at national level, are particularly problematic, inasmuch as they make it impossible for the Republic of Poland to ascertain the costs it will have to bear when implementing the contested regulation.
111 By the second part, the Republic of Poland submits that the contested regulation will have a negative social and economic impact on significant sectors of the Polish economy, namely, in particular, the agriculture, agri-food, construction and road transport sectors, and that it will affect rural areas to a greater extent. The national greenhouse gas emission reduction target assigned to it is unfair from a social standpoint, as it affects Poland more than other, more industrialised Member States. That regulation also leads to an increase in the prices of home heating, vehicle fuel, fertilisers and agricultural machinery, as well as higher waste management costs, with the result that it could lead to a drop in the Republic of Poland’s GDP. Thus, in view of such social and economic consequences, the Republic of Poland is not in a position to achieve the objectives set out in that regulation.
112 Furthermore, whilst the contested regulation leads to an unequal and unfair distribution of the social costs arising from reductions in greenhouse gas emissions, an increase in energy poverty and the exclusion of part of the population from the use of means of transport as well as, more generally, an increase in the cost of electricity and heat generation, it contains no measures to give effect to the objective of safeguarding the interests of disadvantaged groups, despite the reference thereto in recital 4, and nor does it provide for any additional support measures aimed at dovetailing with the Union’s increased ambition. In that regard, the lack of direct incentives for farmers who are, after all, economic operators taking measures that promote CO2 removal, does not encourage them to reduce their greenhouse gas emissions or increase greenhouse gas removal.
113 By the third part, the Republic of Poland submits that the impact assessment is incorrect and outdated, as it has not been updated since the Federation of Russia’s war of aggression against Ukraine began, even though that war has had significant consequences for its situation. According to various scenarios, the Republic of Poland’s population could increase by 1.75 to 6 million people due to the influx of Ukrainian refugees. That situation could lead to a significant increase in Poland’s greenhouse gas emissions, which will ultimately affect the scale of the reduction effort to be achieved in the 2026-2030 period. In its impact assessment, however, the Commission projected a decline in Poland’s total population for the period from 2020 to 2030.
114 In that regard, the EU legislature should have provided for a ‘crisis clause’ allowing for the updating of Member States’ demographic data, similar in its mechanism to the ‘natural disturbances clause’ contained in Regulation 2018/841. However, the EU legislature erred in failing to adopt a provision to that effect, which would have made it possible to review the GDP per capita criterion and the inclusion of which had, moreover, been requested by the Republic of Poland during the negotiations preceding the adoption of the contested regulation.
115 The Parliament and the Council, supported by the Commission, contend that the third plea in law must be rejected as unfounded.
Findings of the Court
116 The first subparagraph of Article 5(4) TEU provides that, under the principle of proportionality, ‘the content and form of Union action shall not exceed what is necessary to achieve the objectives of the Treaties’.
117 That principle requires that measures implemented through provisions of EU law should be appropriate for attaining the legitimate objectives pursued by the legislation at issue and not go beyond what is necessary to achieve them. Thus, when there is a choice between several appropriate measures, recourse must be had to the least onerous, and the disadvantages caused must not be disproportionate to the aims pursued (judgments of 13 November 1990, Fedesa and Others, C‑331/88, EU:C:1990:391, paragraph 13; of 13 March 2019, Poland v Parliament and Council, C‑128/17, EU:C:2019:194, paragraph 94; and of 3 December 2019, Czech Republic v Parliament and Council, C‑482/17, EU:C:2019:1035, paragraph 76).
118 With regard to judicial review of compliance with that principle, the Court has accepted that, in the exercise of the powers conferred on it, the EU legislature must be allowed a broad discretion in areas in which its action involves political, economic and social choices and in which it is called upon to undertake complex assessments and evaluations, a fortiori where they are of an evolving nature. That broad discretion of the EU legislature applies to the determination of the nature and scope of the measures which it adopts and, to some extent, to the establishment of the basic facts (see, to that effect, judgments of 8 July 2010, Afton Chemical, C‑343/09, EU:C:2010:419, paragraphs 28, 33 and 46; of 21 June 2018, Poland v Parliament and Council, C‑5/16, EU:C:2018:483, paragraphs 150, 151 and 170; and of 4 October 2024, Lithuania and Others v Parliament and Council (Mobility Package), C‑541/20 to C‑555/20, EU:C:2024:818, paragraphs 219 and 242).
119 Consequently, the legality of a measure adopted in one of those areas can be affected only if the measure is manifestly inappropriate having regard to the objective which the EU legislature is seeking to pursue. Therefore, the question is not whether a measure adopted in such an area was the only or the best possible measure, since the EU judicature cannot substitute its assessment of scientific and technical facts for that of the EU legislature on which the Treaties have placed that task (see, to that effect, judgments of 12 July 2001, Jippes and Others, C‑189/01, EU:C:2001:420, paragraphs 82 and 83, and of 4 October 2024, Lithuania and Others v Parliament and Council (Mobility Package), C‑541/20 to C‑555/20, EU:C:2024:818, paragraph 242).
120 However, even where it has broad discretion, the EU legislature is required to base its choice on objective criteria and examine whether the aims pursued by the measure chosen are such as to justify even substantial negative economic consequences for certain operators. The EU institutions which have adopted the act in question must therefore be able to show before the Court that in adopting that act they actually exercised their discretion, which presupposes that consideration was taken of all the relevant factors and circumstances of the situation the act was intended to regulate. It follows that those institutions must at the very least be able to produce and set out clearly and unequivocally the basic facts which had to be taken into account as the basis of the contested measures of that act and on which the exercise of their discretion depended. In that regard, the validity of an EU measure must be assessed in the light of the information available to the EU legislature at the time of the adoption of the legislation in question and cannot depend on retrospective considerations concerning its efficacy (see, to that effect, judgments of 7 February 1973, Schroeder, 40/72, EU:C:1973:14, paragraph 14; of 12 July 2001, Jippes and Others, C‑189/01, EU:C:2001:420, paragraph 84; and of 21 June 2018, Poland v Parliament and Council, C‑5/16, EU:C:2018:483, paragraphs 152 and 153).
121 Furthermore, the EU legislature does not have to take into consideration the particular situation of a Member State where the EU measure concerned has an impact in all Member States and requires that a balance between the different interests involved be ensured, taking account of the objectives of that measure. Therefore, the attempt to strike such a balance taking into account not the particular situation of a single Member State but that of all the Member States of the European Union cannot, in itself, be regarded as contrary to the principle of proportionality (judgments of 18 June 2015, Estonia v Parliament and Council, C‑508/13, EU:C:2015:403, paragraph 39; of 21 June 2018, Poland v Parliament and Council, C‑5/16, EU:C:2018:483, paragraph 167; and of 4 October 2024, Lithuania and Others v Parliament and Council (Mobility Package), C‑541/20 to C‑555/20, EU:C:2024:818, paragraph 246).
122 That case-law must guide the Court in its examination of the three parts of the third plea in law.
123 In the present case, by the first part of that plea in law, the Republic of Poland submits, in essence, that the impact assessment carried out by the Commission is insufficient and incorrect on a number of points, contrary to point 12 of the Better Law-Making Agreement.
124 In that regard, turning first to the argument alleging that the impact assessment was superficial in that the Commission allegedly disregarded option 1.2, consisting in setting the greenhouse gas emissions reduction target for the sectors covered by Regulation 2018/842 at a lower level than that set in the contested regulation, it should be noted first of all that, contrary to the Republic of Poland’s assertion, in section 5.3 of that assessment the Commission described at length the three options and various sub-options available to the EU legislature, before setting out in section 5.4 of that assessment the options ruled out at an early stage of the legislative procedure, and then explaining in detail, in section 6 of the same assessment, the advantages and disadvantages of those three options and their sub-options.
125 Therein it stated that option 1.2 ‘clearly has risks related to environmental integrity’, that ‘assuming the new [EU ETS] sectors meet their cap, [Regulation 2018/842] as a whole may not achieve their required reduction potential (‑40%), if the other [sectors covered by that regulation] not included in the new [EU ETS] do not see additional reductions’ and that ‘if these other sectors were to simply meet their Reference projections, overall [Regulation 2018/842] would achieve ‑36% [greenhouse gas] emission reductions, which would be compliant with [its ‑35% target] but clearly not in line with the required reduction of ‑40%’.
126 In the conclusion part of section 6.1.1, the Commission began by finding that ‘option 1.2 does not have the same environmental integrity [as option 1.1], and clearly risks missing the required reductions in the [Regulation 2018/842] sectors’. Next, it observed that a ‘larger scope of a new [EU ETS] to road transport and building sectors, and a higher target in this new ETS, would lower this risk’. Lastly, it stated that ‘setting higher ambition in the existing [EU ETS] or the LULUCF sector, beyond what is needed under the cost-efficient projections, may compensate for this risk, but may create new issues in terms of environmental integrity or cost in those sectors’.
127 Furthermore, in the comparison of options in section 7 of the impact assessment, the Commission observed that ‘option 1.2 clearly has risks related to environmental integrity in 2030 as the [Regulation 2018/842] target itself would not ensure achievement [of] the overall ambition of ‑40% [greenhouse gas] reductions in [Regulation 2018/842] …’ That option also has the disadvantage of favouring a ‘potential accumulation of [annual emission allocations (AEA)] surpluses early in the period [until 2030]’, thereby giving rise to ‘a too generous [greenhouse gas] AEA trajectory compared to emission profiles’.
128 Consequently, the Republic of Poland is not justified in arguing that the impact assessment is superficial in its examination of option 1.2, given that the EU legislature was entitled to consider that that option did not enable the overall objective of reducing greenhouse gas emissions by 2030 to be achieved. In addition, the increase in the reduction targets of those emissions, resulting from the amendments made to Regulation 2018/842 by Article 1(1) and Article 1(3) of the contested regulation, is clearly not disproportionate to the objective pursued by the EU legislature.
129 Secondly, the argument alleging an insufficient statement of reasons in the impact assessment concerns the adjustment of the GDP per capita criterion, which serves as the distribution key for national greenhouse gas emission reduction targets amongst Member States, in that that adjustment favours those Member States with the highest GDP per capita.
130 In that regard, the Court notes, first of all, that, as observed by the Commission in section 4.2 of that assessment, the review of Regulation 2018/842 is structured around three specific objectives, including the objective of ‘[sharing] additional efforts … in a consistent, fair and equitable manner between Member States’. It is, moreover, emphasised in that regard that ‘fairness is a core principle of the effort sharing legislation’ and that ‘a key element … has been to correlate the ambition level of national targets with national economic capacity’.
131 Those specific objectives also include the promotion of ‘cost-efficient solutions for further reducing emissions in effort sharing sectors’. That entails ensuring that ‘the set targets are achievable with reasonable efforts, taking into account differences in cost-efficient mitigation potentials between Member States’.
132 Next, section 6.1.2 of the impact assessment, entitled ‘National targets and distributional impacts in [Regulation 2018/842]’, states that the ‘current’ targets of that regulation are ‘based on GDP per capita data but also include specific adjustments to take into account that for certain high income Member States a target based purely on GDP is substantially more ambitious than the cost-efficient contribution’. Therefore, ‘without adjustments, high income Member States would be expected to reduce emissions more than their respective cost efficient reduction potential.’ For that reason, the Commission states in that section that ‘in order to reflect high income Member States’ differences between their cost-efficient reduction potential and targets based on GDP per capita only, a limited cost efficiency adjustment to the GDP-based targets can be made …’
133 Moreover, in the comparison set out in section 7 of the impact assessment, the Commission stated that ‘the basic design of the current [Regulation 2018/842] to address the differences in economic capacity of Member States, as well as a relative adjustment to reflect the cost-efficiency in a fair and balanced manner is maintained under both options 1 and 2.’ It stated that those two options are ‘based on GDP/capita with additional adjustments based on cost efficient abatement potential, not only in high-income Member States but also within the group of low and middle-income Member States’.
134 Lastly, in section 8, relating to the preferred option, the Commission stated that ‘increasing the national targets under [Regulation 2018/842] will require revisiting fairness and cost efficiency’ and that ‘the assessment concludes that an update of the target setting approach based on GDP per capita is still appropriate, while applying a limited amount of targeted corrections to address cost efficiency concerns’.
135 Consequently, it is readily clear and unambiguous from the impact assessment that, in relation to the objective pursued, the EU legislature’s decision to adjust the GDP per capita criterion for distributing national greenhouse gas emission reduction targets is clearly not inappropriate.
136 Thirdly, the argument alleging insufficiency of the Commission’s assessment of the possibility of imposing greater greenhouse gas emission reduction obligations on Member States with a higher GDP per capita, an assessment which should have focused on the scale of the targets assigned to those Member States, must be rejected since, as noted in paragraph 132 of the present judgment, for certain high-income Member States, a target based solely on GDP is considerably more ambitious than a cost-effective contribution.
137 However, as observed by the Parliament and the Council, the Republic of Poland has not demonstrated how the system for setting targets for Member States is manifestly incorrect, or how the link between those targets and cost-effectiveness is manifestly incorrect. It follows that it has failed to demonstrate that the EU legislature made a manifest error of assessment in that regard, in view of the objective pursued by the contested regulation.
138 Fourthly, the argument alleging that the Commission failed to examine sufficiently the impact of the distribution of the new greenhouse gas emission reduction target amongst Member States, or to set out the precise impact of implementing a ‑40% reduction in those emissions relative to 2005 greenhouse gas emission levels must be rejected, as it is based solely on general assertions and does not establish that the EU legislature exercised its discretion in a manifestly inappropriate manner.
139 Lastly, as regards the Republic of Poland’s assertion that the Parliament and the Council infringed point 16 of the Better Law-Making Agreement by failing to invite the Commission to supplement the impact assessment, the Court finds that that point merely provides that the Commission may, at the invitation of the Parliament and the Council, supplement its own impact assessment, with the result that it does not lay down any obligation for the institutions concerned to supplement such an assessment (see, by analogy, judgment of 13 March 2019, Poland v Parliament and Council, C‑128/17, EU:C:2019:194, paragraph 43). That allegation must therefore be rejected as unfounded.
140 In those circumstances, the first part of the third plea in law, seeking to establish that the Commission’s impact assessment is insufficient and incorrect, must be rejected.
141 In the second part of the third plea in law, the Republic of Poland submits, in essence, that the contested regulation will have a negative social and economic impact on significant sectors of the Polish economy, namely, in particular, the agriculture, agri-food, construction and road transport sectors, and also rural areas, with the result that the Republic of Poland is not in a position to achieve the objectives set out in that regulation. The national greenhouse gas emissions reduction target assigned to the Republic of Poland is unfair from a social standpoint, as it affects Poland more than other, more industrialised Member States, and is not accompanied by concrete measures designed to safeguard the interests of disadvantaged groups, despite the reference thereto in recital 4 of that regulation, or to encourage farmers to reduce their greenhouse gas emissions or increase their greenhouse gas removals.
142 The Court notes in that regard, first, that the Republic of Poland merely puts forward a general assertion that the contested regulation will have a disproportionate negative impact on the agriculture, agri-food, construction and road transport sectors, and on rural areas, with the result that the Republic of Poland is not in a position to achieve the objectives set out in that regulation, without providing any factual evidence whatsoever to substantiate those assertions.
143 Second, as to the assertion that the contested regulation contains no measures to give effect to the objective of safeguarding the interests of disadvantaged groups, despite the reference thereto in recital 4 of that regulation, the Court finds that that regulation was adopted, not in isolation, but as part of the ‘Fit for 55’ legislative package, which is aimed at giving effect to the Union’s efforts across all areas to achieve the climate targets it has set itself.
144 In that context, as stated by the Parliament and the Council in their written pleadings, the objective of safeguarding the interests of disadvantaged groups must be examined not solely in the light of the contested regulation, but having regard to all the measures and instruments implemented as part of that legislative package. In that regard, the Court notes, first, that, in order to mitigate the impact of increased costs in the construction and road transport sectors, Regulation (EU) 2023/955 of the European Parliament and of the Council of 10 May 2023 establishing a Social Climate Fund and amending Regulation (EU) 2021/1060 (OJ 2023 L 130, p. 1) established a Social Climate Fund in order to provide specific funding to Member States to support those groups of vulnerable persons most affected, in particular households facing energy or transport poverty. Second, regarding more specifically farmers, it is apparent from sections 1.2 and 6.5 of the impact assessment that climate change mitigation is among the specific objectives of the Commission’s proposal for the next Common Agricultural Policy (CAP) and that the Strategic Plans under the CAP allow Member States to focus agriculture funding on improving greenhouse gas efficiency in that sector.
145 In those circumstances, the second part of the third plea in law must be dismissed as unfounded.
146 The third part of the third plea in law alleges that the data underpinning the impact assessment are outdated inasmuch as the Commission failed to take account of the economic, demographic and environmental consequences of the Federation of Russia’s war of aggression against Ukraine, and that nor did the EU legislature take account of the Republic of Poland’s request that a ‘crisis clause’ be inserted into the contested regulation. The Court finds, in the first place, that, contrary to what the Republic of Poland alleges, the EU legislature did take account of the occurrence of that war in recital 16 of the contested regulation, where it is stated that ‘[the Federation of] Russia’s war of aggression against Ukraine [is] impacting the Union’s economy and the level of its greenhouse gas emissions to a degree that cannot yet be fully quantified …’, that ‘due to those uncertainties and other unforeseen events having an impact on greenhouse gas emissions, it is appropriate to review the emissions data in 2025 and, if necessary, update the annual emission allocations in 2025 for the years 2026 to 2030’, and that ‘that update should be based on a comprehensive review of the national inventory data carried out by the Commission in order to determine the average greenhouse gas emissions of each Member State in the years 2021, 2022 and 2023’.
147 In the second place, the Court notes that Article 4(3) of Regulation 2018/842 provides that the Commission is to determine the annual greenhouse gas emission allocations for each Member State on the basis of a review of the national inventory data of the preceding years submitted by Member States pursuant to Regulation 2018/1999, with the result that it is able to take account of the occurrence of exceptional circumstances that Member States might face and, therefore, amend the annual greenhouse gas emission allocations accordingly.
148 It is thus clear that, contrary to what the Republic of Poland submits, the EU legislature did take account of the occurrence of the Federation of Russia’s war of aggression against Ukraine. It should also be borne in mind that it does not follow from points 12 to 15 of the Better Law-Making Agreement that the EU legislature is required to carry out an impact assessment in every circumstance. Not carrying out or updating an impact assessment cannot be regarded as an infringement of the principle of proportionality (see, to that effect, judgment of 3 December 2019, Czech Republic v Parliament and Council, C‑482/17, EU:C:2019:1035, paragraphs 82 to 85).
149 In those circumstances, the third part of the Republic of Poland’s third plea in law must be dismissed as unfounded.
150 In the light of the foregoing considerations, the Republic of Poland’s third plea in law must be rejected as unfounded.
Fourth plea in law: breach of the principle of sincere cooperation laid down in Article 4(3) TEU
Arguments of the parties
151 By its fourth plea in law, the Republic of Poland submits that the greenhouse gas emission reduction targets assigned to the Member States by the contested regulation have been fixed in an unfair manner and contrary to the principle of sincere cooperation laid down in Article 4(3) TEU.
152 First, the target of a 17.7% reduction in greenhouse gas emissions set for it, according to a distribution key using the adjusted GDP per capita criterion, calculated on the basis of average GDP data for the period from 2017 to 2019, is too ambitious and entails excessive costs for the Republic of Poland.
153 Secondly, the EU legislature did not provide for robust financial support to support the Member States’ implementation measures.
154 Thirdly, the greenhouse gas emission reduction target set by the contested regulation for the Republic of Poland has never been discussed or explained. Increasing the national targets for reducing those emissions without taking into account the differences in land area between Member States or the differences in potential for ‘capturing’ CO2 in the sectors covered by the contested regulation leads to unfair outcomes.
155 Fourthly, the distribution key for the greenhouse gas emission reduction target amongst the Member States and the adjustment mechanism applied to it are, in contradiction to recitals 12 and 13 of the contested regulation, intended to ensure that the greatest reduction efforts are borne not by the ‘richest’ Member States, but by the ‘poorest’ Member States.
156 Fifthly, the EU legislature failed to take sufficient account of the fact that the COVID-19 pandemic and the Federation of Russia’s war of aggression against Ukraine affect the Republic of Poland specifically. Given those uncertainties, the EU legislature ought to have confined itself to reviewing the data on greenhouse gas emissions in 2025 and, if necessary, providing for an update of the annual emission limits for the period from 2026 to 2030, rather than setting those limits at the outset in the contested regulation.
157 The Parliament and the Council, supported by the Commission, contend that the plea in law must be rejected as, if not inadmissible, at least unfounded. The Parliament and the Council contend that the present plea in law does not satisfy the requirement of clarity and precision laid down in Article 120(c) of the Rules of Procedure of the Court, inasmuch as the Republic of Poland merely reiterates the arguments put forward in the first and third pleas in law, without explaining why it considers that the EU legislature has infringed the principle of sincere cooperation. The application thus merely contains arguments to the effect that the contested regulation is unfair to those Member States with the lowest GDP per capita and that it imposes excessive costs on the Republic of Poland.
Findings of the Court
158 By its fourth plea in law, the Republic of Poland alleges infringement of the principle of sincere cooperation referred to in Article 4(3) TEU and submits, in essence, that the EU legislature has, first, set a national target for Poland for the reduction of greenhouse gas emissions that is too ambitious and too costly for it; secondly, it has failed to provide for robust financial support for the Member States; thirdly, it has failed to explain to it the method for setting national targets used in the contested regulation; fourthly, it has made an unfair distribution of the efforts to reduce greenhouse gas emissions by placing a greater burden on the ‘poorest’ Member States, to the benefit of the ‘richest’ Member States; and, fifthly, it has failed to take sufficient account of the fact that the COVID-19 pandemic and the Federation of Russia’s war of aggression against Ukraine affected it specifically.
159 At the outset, without it being necessary to rule on the admissibility of this plea in law, it should be borne in mind, as observed in paragraph 86 of the present judgment, that, under Article 4(3) TEU, the Union and the Member States are, in full mutual respect, to assist each other in carrying out tasks which flow from the Treaties.
160 In accordance with the case-law referred to in paragraphs 118 to 120 of the present judgment, in areas in which the EU legislature has a wide discretion, the Court need satisfy itself only that the EU legislature is able to show that, in adopting the act at issue, it effectively exercised its discretion and, for that purpose, is able to set out clearly and unequivocally the basic facts on the basis of which that act was adopted and on which the exercise of its discretion depended (see, to that effect, judgment of 4 October 2024, Lithuania and Others v Parliament and Council (Mobility Package), C‑541/20 to C‑555/20, EU:C:2024:818, paragraph 664).
161 The duty of sincere cooperation cannot have a wider scope, in the sense of requiring the EU legislature, in all circumstances, to produce, at the request of a Member State, documents and information that are allegedly missing or to correct information available to it before being able to adopt an act. Such an interpretation could prevent the institutions from exercising their discretion and block the legislative process. While it is true that the duty of sincere cooperation includes the duty of mutual assistance, which entails, among other things, the exchange of relevant information between the institutions and the Member States during the legislative process, that obligation cannot provide a means for one of those States, in the event of disagreement as to the adequacy, relevance or accuracy of the available data, to challenge the lawfulness of the decision-making process on that ground alone (see, to that effect, judgment of 4 October 2024, Lithuania and Others v Parliament and Council (Mobility Package), C‑541/20 to C‑555/20, EU:C:2024:818, paragraph 665 and the case-law cited).
162 In those circumstances, the adoption of a legislative measure with due regard for the relevant provisions of the FEU Treaty, despite the opposition of a number of Member States, cannot constitute a breach of the duty of sincere cooperation devolving on the Parliament and the Council (see, to that effect, judgment of 4 October 2024, Lithuania and Others v Parliament and Council (Mobility Package), C‑541/20 to C‑555/20, EU:C:2024:818, paragraph 666 and the case-law cited).
163 In the present case, the Court finds, in the first place, that, by the line of argument referred to in paragraphs 152, 153, 155 and 156 of the present judgment, the Republic of Poland does not deny that, during the legislative process, it had access to the documents on which the EU legislature based itself in order to adopt the contested regulation and that it was able to lodge observations on the data contained in those documents and on the EU legislature’s assumptions. Apart from the fact that that line of argument essentially overlaps with that put forward in the first and third pleas in law, observance of the duty of sincere cooperation does not imply that the EU legislature is obliged to agree with that line of argument.
164 In the second place, the line of argument referred to in paragraph 154 of the present judgment, to the effect that the national greenhouse gas emission reduction target set for the Republic of Poland was neither discussed nor explained, is particularly general and unsubstantiated. Moreover, it is important to note that the distribution of national greenhouse gas emission reduction targets, including those assigned to the Republic of Poland, was explained in detail in section 6.1.2 of the impact assessment, so that, from the very outset of the legislative process leading to the adoption of the contested regulation, it was in a position to submit its observations on the level of the national greenhouse gas emission reduction target assigned to it. Accordingly, that line of argument must be rejected.
165 In the light of the foregoing considerations, the fourth plea in law must be dismissed as unfounded.
166 As none of the pleas put forward by the Republic of Poland in support of its action is well founded, the action must, in consequence, be dismissed in its entirety.
Costs
167 Under Article 138(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Parliament and the Council have applied for costs to be awarded against the Republic of Poland, and since the latter has been unsuccessful, the Republic of Poland must be ordered to bear its own costs and to pay those incurred by the Parliament and the Council.
168 In accordance with Article 140(1) of those Rules, which provides that the institutions which have intervened in the proceedings are to bear their own costs, the Commission is to bear its own costs.
On those grounds, the Court (Second Chamber) hereby:
1. Dismisses the action;
2. Orders the Republic of Poland to bear its own costs and to pay those incurred by the European Parliament and the Council of the European Union;
3. Orders the European Commission to bear its own costs.
[Signatures]
* Language of the case: Polish.