E-12/23 Norwegian Air Shuttle ASA v Staten r Klima- og miljodepartementet


E-12/23 Norwegian Air Shuttle ASA v Staten r Klima- og miljodepartementet


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Deadlines: Motivation ministry:    23 November 2023
Written observations:                    9 January 2024

Keywords: gas emissions, insolvency, dividend

Subject:  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: articles 12 and 16.

Facts of the case:

The Plaintiff, Norwegian Air Shuttle ASA (“NAS”) is a Norwegian airline company subject to an obligation to surrender emissions allowances. In 2020, NAS was allocated free greenhouse gas emissions allowances, which were placed in the company’s allowance account in the greenhouse gas emissions allowance registry. The Norwegian Environment Agency and the Defendant, the Ministry of Climate and Environment, are the authorities responsible for the system of greenhouse gas emissions allowance in Norway. In 2020, Norway introduced travel restrictions due to the COVID-19 pandemic and in the course of a few days NAS had to cancel flights and furlough employees. The Ministry of Climate and Environment stated among other things that the ETS Directive does not allow for extensions to the time limit or other exemptions from the obligation to surrender emissions allowances. After NAS attempting to implement an out-of-court restructuring, the company drew up a draft restructuring plan in Norway and a Scheme of Arrangement in Ireland. The NAS’s Scheme of Arrangement was confirmed by the Irish High Court and Oslo District. By way of settlement for the obligation to surrender allowances for emissions in the period from 1 January to 17 November 2020 and 18 November 2020 to 31 December 2020, NAS made a dividend offers. The Norwegian Environment Agency did not accept to receive a dividend settlement, on the ground that the obligation to surrender allowances could be settled only by surrendering allowances that fully covered the total emissions for 2020. In 2021, the Norwegian Environment Agency NAS gave notice of an imminent administrative penalty for failure to surrender greenhouse gas emissions allowances. NAS appealed against the decision, but the Ministry of Climate and Environment decided to uphold the Norwegian Environment Agency’s decision. NAS has stated that an Irish subsidiary, Norwegian Air International Limited, was also in examinership in Ireland. In 2021, the High Court delivered a decision which, according to NAS, entailed that Norwegian Air International Limited’s obligation to surrender allowances was covered by the Irish Scheme of Arrangement and could be settled by dividend. The Environmental Protection Agency in Ireland received its dividend, waived the claim for surrender of greenhouse gas emissions allowances and did not impose an administrative penalty.

Request for an advisory opinion:

Does Article 12(2a) of Directive 2003/87/EC preclude national legislation that provides that the obligation to surrender emissions allowances may be settled by dividend in a compulsory debt settlement in connection with restructuring of an insolvent company?

Cited (recent) case-law: C-203/12 Billerud; C-580/14 Sandra Bitter; Case C-113/19 Luxaviation; C-165/20 Air Berlin.

Policy Area: EZK, IenW