Burgo Group SpA v Gestore dei Servizi Energetici SpA

Contents

Judgment of the Court (Seventh Chamber)17 September 2020^note(Reference for a preliminary ruling — Environment — Promotion of cogeneration — Provision of national law establishing a support scheme — Scheme supporting non-high-efficiency cogeneration plants extended beyond 31 December 2010)In Case C‑92/19,REQUEST for a preliminary ruling under Article 267 TFEU from the Consiglio di Stato (Council of State, Italy), made by decision of 11 October 2018, received at the Court on 5 February 2019, in the proceedingsBurgo Group SpAvGestore dei Servizi Energetici SpA – GSE,interveners:Ministero dello Sviluppo economico,Autorità per l’Energia elettrica e il Gas,THE COURT (Seventh Chamber),composed of P.G. Xuereb, President of the Chamber, T. von Danwitz and A. Kumin (Rapporteur), Judges,Advocate General: G. Hogan,Registrar: A. Calot Escobar,having regard to the written procedure,after considering the observations submitted on behalf of:– Burgo Group SpA, by R. Montanaro, L.G. Ferrua Magliani and E. Assuntini, avvocati,– Gestore dei Servizi Energetici SpA ‐ GSE, by A. Police, A. Pugliese and P.R. Molea, avvocati,– the Italian Government, by G. Palmieri, acting as Agent, and by G. Palatiello, avvocato dello Stato,– the European Commission, by G. Gattinara, D. Recchia, K. Talabér-Ritz and Y.G. Marinova, acting as Agents,having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,gives the following

Judgment

1This request for a preliminary ruling concerns the interpretation of Article 12(3) of Directive 2004/8/EC of the European Parliament and of the Council of 11 February 2004 on the promotion of cogeneration based on a useful heat demand in the internal energy market and amending Directive 92/42/EEC (OJ 2004 L 52, p. 50), of Article 107(1) TFEU and of the principles of equal treatment and non-discrimination.

2The request has been made in proceedings between Burgo Group SpA and Gestore dei Servizi Energetici SpA – GSE (Energy Services Management Company, Italy) concerning the latter’s refusal to recognise Burgo Group as being eligible for a support scheme which establishes, inter alia, an exemption from the obligation to purchase ‘green certificates’.

Legal context

EU law

3Directive 2004/8 was adopted as part of the European Union’s environment policy on the basis of Article 175(1) EC.

4Recitals 1, 2, 11, 15, 16, 24, 26 and 32 of that directive state:(1) The potential for use of cogeneration as a measure to save energy is underused in the Community at present. Promotion of high-efficiency cogeneration based on a useful heat demand is a Community priority given the potential benefits of cogeneration with regard to saving primary energy, avoiding network losses and reducing emissions, in particular of greenhouse gases. In addition, efficient use of energy by cogeneration can also contribute positively to the security of energy supply and to the competitive situation of the European Union and its Member States. It is therefore necessary to take measures to ensure that the potential is better exploited within the framework of the internal energy market.(2) Directive 2003/54/EC of the European Parliament and of the Council [of 26 June 2003 concerning common rules for the internal market in electricity and repealing Directive 96/92/EC – Statements made with regard to decommissioning and waste management activities (OJ 2003 L 176, p. 37)] establishes common rules for the generation, transmission, distribution and supply of electricity within the internal market in electricity. In this context, the development of cogeneration contributes to enhancing competition, also with regard to new market actors.…(11) High-efficiency cogeneration is in this Directive defined by the energy savings obtained by combined production instead of separate production of heat and electricity. Energy savings of more than 10% qualify for the term “high-efficiency cogeneration”. To maximise the energy savings and to avoid energy savings being lost, the greatest attention must be paid to the functioning conditions of cogeneration units.…(15) The general objective of this Directive should be to establish a harmonised method for calculation of electricity from cogeneration and necessary guidelines for its implementation, taking into account methodologies such as those currently under development by European standardisation organisations. This method should be adjustable to take account of technical progress. Application of the calculations in Annexes II and III to micro-cogeneration units could, in accordance with the principle of proportionality, be based on values resulting from a type testing process certified by a competent, independent body.(16) The definitions of cogeneration and of high-efficiency cogeneration used in this Directive do not prejudge the use of different definitions in national legislation, for purposes other than those set out in this Directive. ……(24) Public support should be consistent with the provisions of the Community guidelines on State aid for environmental protection, including as regards the non-cumulation of aid. These guidelines currently allow certain types of public support if it can be shown that the support measures are beneficial in terms of protection of the environment because the conversion efficiency is particularly high, because the measures will allow energy consumption to be reduced or because the production process will be less damaging to the environment. Such support will in some cases be necessary to further exploit the potential for cogeneration, in particular to take account of the need to internalise external costs.…(26) Member States operate different mechanisms of support for cogeneration at the national level, including investment aid, tax exemptions or reductions, green certificates and direct price support schemes. One important means to achieve the aim of this Directive is to guarantee the proper functioning of these mechanisms, until a harmonised Community framework is put into operation, in order to maintain investor confidence. The Commission intends to monitor the situation and report on experiences gained with the application of national support schemes.…(32) In accordance with the principles of subsidiarity and proportionality as set out in Article 5 [EC], general principles providing a framework for the promotion of cogeneration in the internal energy market should be set at Community level, but the detailed implementation should be left to Member States, thus allowing each Member State to choose the regime which corresponds best to its particular situation. This Directive confines itself to the minimum required in order to achieve those objectives and does not go beyond what is necessary for that purpose.’

5As stated in Article 1 of Directive 2004/8, the purpose of the directive is ‘to increase energy efficiency and improve security of supply by creating a framework for promotion and development of high-efficiency cogeneration of heat and power based on useful heat demand and primary energy savings in the internal energy market, taking into account the specific national circumstances especially concerning climatic and economic conditions’.

6Article 2 of Directive 2004/8 provides that the directive is to ‘apply to cogeneration as defined in Article 3 and cogeneration technologies listed in Annex I’.

7Article 3 of that directive, headed ‘Definitions’, states as follows:‘For the purpose of this Directive, the following definitions shall apply:(a) “cogeneration” shall mean the simultaneous generation in one process of thermal energy and electrical and/or mechanical energy;…(i) “high-efficiency cogeneration” shall mean cogeneration meeting the criteria of Annex III;…’

8Article 7 of that directive, headed ‘Support schemes’, provides, in paragraph 1:‘Member States shall ensure that support for cogeneration – existing and future units – is based on the useful heat demand and primary energy savings, in the light of opportunities available for reducing energy demand through other economically feasible or environmental[ly] advantageous measures like other energy efficiency measures.’

9Article 12 of Directive 2004/8, headed ‘Alternative calculations’, provides, in paragraph 3:‘Until the end of 2010, Member States may, using an alternative methodology, define a cogeneration as high-efficiency cogeneration without verifying that the cogeneration production fulfils the criteria in Annex III(a), if it is proved on national level that the cogeneration production identified by such an alternative calculation methodology on average fulfils the criteria in Annex III(a). …’

10Annex III to that directive, headed ‘Methodology for determining the efficiency of the cogeneration process’ states in point (a) that, for the purposes of that directive, high-efficiency cogeneration is to fulfil various criteria, which include, inter alia, a criterion requiring that ‘cogeneration production from cogeneration units [provide] primary energy savings calculated according to point (b) of at least 10% compared with the references for separate production of heat and electricity’.

Italian law

Legislative Decree No 79/1999

11Decreto legislativo n. 79 – Attuazione della direttiva 96/92/CE recante norme comuni per il mercato interno dell’energia elettrica (Legislative Decree No 79 on implementation of Directive 96/92/EC concerning common rules for the internal market in electricity) of 16 March 1999 (GURI No 75 of 31 March 1999), in the version applicable at the time of the facts in the main proceedings (‘Legislative Decree No 79/1999’), provides in Article 2(8):‘Cogeneration is the combined production of electricity and heat in the circumstances defined by the [Autorità per l’Energia elettrica e il Gas (Electricity and Gas Authority, Italy) (“the AEEG”)], which ensures a significant saving of energy when compared with separate production.’

12Article 3(3) of that legislative decree provides as follows:‘The [AEEG] shall lay down conditions capable of ensuring for all network users freedom of access under the same conditions, impartiality and neutrality of the transmission and call service. In exercising that power, the Authority shall pursue the objective of ensuring the most efficient possible use of electricity produced or, in any event, fed into the national electricity network, in compliance with the latter’s technical constraints. The Authority shall also establish an obligation to use as a priority electricity produced from renewable energy sources and electricity produced by cogeneration.’

13Article 11 of that legislative decree provides:1. In order to support the use of renewable energies, energy savings, the reduction of carbon anhydride emissions and the use of national energy resources from 2001 onwards, importers and entities responsible for plants which, each year, import or produce electricity from non-renewable energy sources have the obligation to feed into the national network, during the following year, a green electricity quota from plants that entered into operation or have increased their production, within the limits of additional production capacity, after the entry into force of the present decree.2. The obligation laid down in paragraph 1 shall apply to imports and production of electricity – not including cogeneration, the power plant’s own consumption and exports – of more than 100 GWh; the quota referred to in paragraph 1 shall initially be set at 2% of that energy exceeding 100 GWh.3. Those entities may also discharge that obligation by acquiring, in whole or in part, the equivalent quota or related rights either from other producers, on the condition that they feed energy from renewable sources into the national electricity network, or from the national transmission network operator. …4. The national transmission network operator shall ensure that priority is given to electricity produced by plants using, first, renewable energy sources, second, cogeneration systems, on the basis of specific criteria laid down by the [AEEG], and, third, national sources of primary fuel energy, the latter for an annual maximum quota not exceeding 15% of all primary energy necessary to produce the electricity consumed.…’

14It is apparent from the order for reference that the support mechanism laid down in Article 11(1) to (4) of Legislative Decree No 79/1999 was abolished for cogeneration plants other than high-efficiency cogeneration plants from 1 January 2016 by Article 25 of decreto legislativo n. 28 – Attuazione della direttiva 2009/28/CE sulla promozione dell’uso dell’energia da fonti rinnovabili, recante modifica e successiva abrogazione delle direttive 2001/77/CE e 2003/30/CE (Legislative Decree No 28 on implementation of Directive 2009/28/EC on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC) of 3 March 2011 (Ordinary Supplement to GURI No 71 of 28 March 2011).

15Moreover, the referring court notes that decreto legislativo n. 102 – Attuazione della direttiva 2012/27/UE sull’efficienza energetica, che modifica le direttive 2009/125/CE e 2010/30/UE e abroga le direttive 2004/8/CE e 2006/32/CE (Legislative Decree No 102 on implementation of Directive 2012/27/EU on energy efficiency, amending Directives 2009/125/EC and 2010/30/EU and repealing Directives 2004/8/EC and 2006/32/EC) of 4 July 2014 (GURI No 165 of 18 July 2014) brought forward the date for the abolition of that support mechanism to19 July 2014.

AEEG Decision No 42/02

16Pursuant to Article 2(8) of Legislative Decree No 79/1999, the AEEG laid down a definition in its Decision No 42/02 of 19 March 2002 of the minimum conditions to be met in order for an electricity production plant to be classified as a ‘cogeneration’ plant.

Legislative Decree No 20/2007

17Decreto legislativo n. 20 – Attuazione della direttiva 2004/8/CE sulla promozione della cogenerazione basata su una domanda di calore utile nel mercato interno dell’energia, nonché modifica alla direttiva 92/42/CEE (Legislative Decree No 20 on implementation of Directive 2004/8) of 8 February 2007 (GURI No 54 of 6 March 2007), in the version applicable at the time of the facts in the main proceedings (‘Legislative Decree No 20/2007’), provides in Article 3(1):‘Until 31 December 2010, and without prejudice to paragraph 2, cogeneration meeting the definition in Article 2(8) of Legislative Decree [No 79/1999] shall be regarded as high-efficiency cogeneration.’

18Article 6(1) of Legislative Decree No 20/2007 provides:‘In order to ensure that support for cogeneration is based on the useful heat demand and, at the same time, on primary energy savings, high-efficiency cogeneration shall be subject to the provisions of Article 3(3), Article 4(2) and Article 11(2) and (4) of Legislative Decree [No 79/1999]. High-efficiency cogeneration shall be eligible for the advantages derived from the application of the measures implementing Article 9(1) of Legislative Decree [No 79/1999] and Article 16(4) of Legislative Decree No 164 of 23 May 2000.’

19It is apparent from the order for reference that Annex III to Legislative Decree No 20/2007 transposed into Italian law Annex III to Directive 2004/8.

The dispute in the main proceedings and the questions referred for a preliminary ruling

20Burgo Group owns numerous cogeneration plants in Italy, which produce electricity and useful heat simultaneously. That company applied to GSE for an exemption from the obligation under national law to purchase green certificates for its cogeneration plants for the years 2011 to 2013.

21It is apparent from the order for reference that those plants had enjoyed such an exemption up to 31 December 2010, pursuant to Decision No 42/02 adopted by the AEEG.

22Each of Burgo Group’s requests for exemption from the obligation to purchase green certificates from GSE for the years 2011 to 2013 was rejected by GSE on the ground that the national legislation in force, namely Legislative Decree No 20/2007, which transposed Directive 2004/8 into national law, provides that, as from 1 January 2011, only cogeneration plants which comply with the criteria laid down in Annex III to that decree, which transposes Annex III to that directive, would be eligible for the advantages provided for in national law, which include the exemption from the obligation to purchase green certificates. The cogeneration plants belonging to Burgo Group did not, however, in the view of GSE, comply with those criteria since they did not have the characteristics of high-efficiency plants.

23Burgo Group brought several actions for annulment of those rejection decisions before the Tribunale amministrativo regionale per il Lazio (Regional Administrative Court, Lazio, Italy), all of which were dismissed by judgments delivered in 2015.

24The referring court states that, in those judgments, the Tribunale amministrativo regionale per il Lazio (Regional Administrative Court, Lazio) held, in essence, in the first place, that, under Article 12(3) of Directive 2004/8 and in accordance with the national measure transposing that provision, with effect from 1 January 2011, only high-efficiency cogeneration plants which complied with, or had been adapted to comply with, the energy efficiency criteria set out in Annex III to that directive were eligible for the advantages provided for in national law and, in particular, for the exemption from the obligation to purchase green certificates. It stated, in the second place, that the court of first instance had taken the view that it also followed from Article 12(3) of Directive 2004/8 and from the national measure transposing it that, until 31 December 2010, the Member States had the option of setting a different method of defining high-efficiency cogeneration, provided that it had been shown that that method corresponded on average to the criteria referred to in Annex III.

25Thus, Decision No 42/02 of the AEEG provided for such an alternative method for defining high-efficiency cogeneration, which could, in accordance with Article 12(3) of Directive 2004/8 and the national law transposing that article, apply until 31 December 2010. Moreover, any interpretation to the contrary, first, would deprive of all meaning the deadline provided for in that provision, namely 31 December 2010, second, would negate the scope of the criteria defined in Annex III to that directive and, third, would mean that the technological and economic effort invested by individuals to adapt cogeneration plants in order to make them comply with the energy-efficiency criteria laid down in that annex had been in vain.

26Burgo Group maintained that the Tribunale amministrativo regionale per il Lazio (Regional Administrative Court, Lazio) had erred in its interpretation and application, in particular, of Directive 2004/8 and appealed against those judgments to the Consiglio di Stato (Council of State, Italy).

27Before the referring court, Burgo Group claims, inter alia, that the Tribunale amministrativo regionale per il Lazio (Regional Administrative Court, Lazio) was wrong not to have taken account of the judgment of the Court of Justice of 26 September 2013, IBV & Cie (C‑195/12, EU:C:2013:598), in which the Court applied the national support scheme at issue in the case that gave rise to that judgment not only to high-efficiency cogeneration plants, but to all cogeneration plants equally. Furthermore, according to that company, national law allows benefits and, in particular, the exemption from the obligation to purchase green certificates to be applied to companies operating cogeneration plants which are not high-efficiency plants, even after December 2010. Thus, it argues, Article 11 of Legislative Decree No 79/1999, which lays down, in particular, an exemption from the obligation to purchase green certificates for cogeneration plants, was repealed only with effect from 19 July 2014.

28In those circumstances the Consiglio di Stato (Council of State) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:(1) Does Directive [2004/8] (in particular Article 12 thereof) preclude an interpretation of Articles 3 and 6 of Legislative Decree No 20/2007 as allowing the benefits referred to in Legislative Decree No 79/1999 (in particular in Article 11 thereof and in Decision No 42/02 of the AEEG which constitutes implementation of the preceding provision) to be granted also to non-high-efficiency cogeneration installations even beyond 31 December 2010?(2) Does Article 107 TFEU preclude an interpretation of Articles 3 and 6 of Legislative Decree No 20/2007, in the sense set out under the first question, in so far as those provisions, as thus interpreted, might constitute “State aid” and therefore be incompatible with the principle of free competition?(3) In line with what is set out under the first and second questions, and having regard to what is expressly put forward by [Burgo Group], does a provision of national law which allows support schemes to continue to be granted to non-high-efficiency cogeneration until 31 December 2015 comply with the EU-law principles of equal treatment and non-discrimination, since that could be the interpretation of domestic Italian law as a result of Article 25(11)(c)(1) of Legislative Decree No 28/2011, which repeals the abovementioned provisions of Article 11 of Legislative Decree No 79/1999 with effect from 1 January 2016, or rather now by 19 July 2014 (as a result of Article 10(15) of Legislative Decree No 102/2014)?’

Consideration of the questions referred

The first question

29By its first question, the referring court asks, in essence, whether Article 12(3) of Directive 2004/8 must be interpreted as precluding a provision of national law which allows cogeneration plants which are not high-efficiency cogeneration plants within the meaning of that directive to continue to be eligible, even after 31 December 2010, for a cogeneration support scheme under which they are, inter alia, exempt from the obligation to purchase green certificates.

30It should be noted that cogeneration support schemes which may be established at national level are governed not by Article 12(3) of Directive 2004/8, but by Article 7 thereof.

31The Court has interpreted Article 7 of Directive 2004/8 as having a scope which is not limited solely to cogeneration plants which are high-efficiency cogeneration plants within the meaning of that directive. It has stated that the EU legislature did not intend to limit that scope solely to high-efficiency cogeneration within the meaning of Article 3(i) of that directive and has held that Article 2 of that directive – the purpose of which, as indicated by its heading, is to define the ‘Scope’ of that directive – states that the directive is to apply to ‘cogeneration as defined in Article 3’ and that the EU legislature took care to define the respective concepts of ‘cogeneration’ and ‘high-efficiency cogeneration’ for the purposes of Directive 2004/8 (see, to that effect, judgment of 26 September 2013, IBV & Cie, C‑195/12, EU:C:2013:598, paragraphs 36 and 37).

32Since the scope of Article 7 of Directive 2004/8, relating to national support schemes, is not limited solely to ‘high-efficiency’ cogeneration (see, to that effect, judgment of 26 September 2013, IBV & Cie, C‑195/12, EU:C:2013:598, paragraph 38), Member States may, under the conditions set out in that article, establish support schemes for cogeneration plants which are not high-efficiency cogeneration plants.

33Article 12(3) of that directive, which confers on Member States, ‘until the end of 2010’, the option of determining ‘a cogeneration as high-efficiency cogeneration’ on the basis of their own criteria, has no bearing on the interpretation of that Article 7.

34Although Article 12(3) of Directive 2004/8 allows Member States, until 31 December 2010, to define a cogeneration as high-efficiency cogeneration using a methodology other than that provided for in Annex III(a) to that directive in certain circumstances, that provision has no bearing on whether Member States may establish support schemes for cogeneration which is not high-efficiency cogeneration or support schemes that are common to those two forms of cogeneration.

35Accordingly, that paragraph does not preclude Member States from implementing, even after 31 December 2010, cogeneration support mechanisms, such as an exemption from the obligation to purchase green certificates, in favour of cogeneration which is not high-efficiency cogeneration.

36In the light of all of the foregoing, the answer to the first question is that Article 12(3) of Directive 2004/8 must be interpreted as not precluding a provision of national law which allows cogeneration plants which are not high-efficiency cogeneration plants within the meaning of that directive to continue to be eligible, even after 31 December 2010, for a cogeneration support scheme under which they are, inter alia, exempt from the obligation to purchase green certificates.

The second and third questions

37By its second and third questions, the referring court asks, in essence, whether Article 107 TFEU and the principles of equal treatment and non-discrimination preclude a provision of national law which allows cogeneration plants which are not high-efficiency cogeneration plants within the meaning of that directive to continue to be eligible, even after 31 December 2010, for a cogeneration support scheme under which they are, inter alia, exempt from the obligation to purchase green certificates.

38In this respect, it should be noted that, in order to allow the Court to provide an interpretation of EU law that will be of assistance to the national court, Article 94(c) of the Rules of Procedure of the Court of Justice requires, inter alia, that the request for a preliminary ruling contain a statement of the reasons which prompted the referring court or tribunal to inquire about the interpretation or validity of certain provisions of EU law, and the relationship between those provisions and the national legislation applicable to the main proceedings.

39According to the Court’s settled case-law, in the context of the cooperation between the Court and the national courts provided for in Article 267 TFEU, it is solely for the national court before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine, in the light of the particular circumstances of the case, both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court. Consequently, where the questions submitted concern the interpretation of EU law, the Court is in principle required to give a ruling (judgment of 4 December 2018, Minister for Justice and Equality and Commissioner of An Garda Síochána, C‑378/17, EU:C:2018:979, paragraph 26 and the case-law cited).

40It follows that questions relating to EU law enjoy a presumption of relevance. The Court may refuse to rule on a question referred by a national court for a preliminary ruling only where it is quite obvious that the interpretation of EU law that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (judgment of 4 December 2018, Minister for Justice and Equality and Commissioner of An Garda Síochána, C‑378/17, EU:C:2018:979, paragraph 27 and the case-law cited).

41The order for reference, however, does not meet the admissibility requirements referred to in paragraphs 38 to 40 above with regard to the second and third questions.

42In the first place, that order does not make it possible to understand why the referring court is uncertain whether the legislation at issue in the main proceedings is compatible with Article 107 TFEU. It is true that, in certain circumstances, such support schemes could constitute State aid for the purpose of that provision. However, first, the order for reference does not specify the circumstances in which those schemes apply and, in particular, what factors would make it possible to classify them as State aid for the purpose of Article 107 TFEU. Second, the referring court does not state why an interpretation of Article 107 TFEU by the Court is necessary for resolution of the dispute pending before it.

43Nor, in the second place, does that order explain why the EU-law principles of equal treatment and non-discrimination preclude a provision of national law which allows the continued application of support schemes for cogeneration which is not high-efficiency cogeneration up to 31 December 2015. The referring court does not set out the reasons which may have led it to question the compatibility of the legislation at issue with those principles, but merely restates the submissions of the parties to the main proceedings on that point.

44As the Court does not have the information necessary to enable it to give a useful answer to the second and third questions referred, those questions must be declared inadmissible.

Costs

45Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

Operative part

On those grounds, the Court (Seventh Chamber) hereby rules: Article 12(3) of Directive 2004/8/EC of the European Parliament and of the Council of 11 February 2004 on the promotion of cogeneration based on a useful heat demand in the internal energy market and amending Directive 92/42/EEC must be interpreted as not precluding a provision of national law which allows cogeneration plants which are not high-efficiency cogeneration plants within the meaning of that directive to continue to be eligible, even after 31 December 2010, for a cogeneration support scheme under which they are, inter alia, exempt from the obligation to purchase green certificates.