In re Unión Fenosa Generación, S.A., Judgment No. 6903/2008 of Sept. 30, 2008

Summary:

An energy company, Unión Fenosa Generación, S.A., brought suit against a decision of the Council of Ministers of Spain of January 21, 2005, whereby it approved the assignment of emissions allowances to two of the company’s power plants for the 2005-2007 term under the provisions of Royal Decree 5/2004 of August 27th, which regulated the market for GHG emissions trading. The Court granted plaintiff’s request for an increase in the emission allowances for its combined cycle power plant in Huelva, which had been incorrectly considered a “new entrant” to the emissions market under the regulation’s timetable. Plaintiff’s request for an increase in its emission allowances as to its coal-fired power plant in La Coruña, one of the five worst emitters in the country¸ was denied. The Court found that the government was justified in applying the maximum penalty of 55% over the total 2000-2002 historical emissions for that category of emitter, despite the fact that plaintiff was thus allowed a lower emission factor than other emitters of the same generation of technologies.

At Issue: Challenge to emissions allowance