Contents
Judgment of the Court (Fifth Chamber)22 May 2025note(Appeal — Environment — Directive 2003/87/EC — System for greenhouse gas emission allowance trading within the European Union — Free allocation of allowances — Article 10a(1) — Concept of substitutes — National implementing measures — Article 11(1) — Lists of installations covered by Directive 2003/87 submitted to the European Commission by the Member States — Decision (EU) 2021/355 — Proposal of the Member State concerned to cover by a benchmark for sintered ore a sub-installation producing iron ore pellets — Rejection decision — Establishment of benchmarks by the Commission — General objective of incentivising the reduction of greenhouse gas emissions — No obligation of result — Article 296 TFEU — Obligation to state reasons for decisions of the EU institutions)In Case C‑621/23 P,APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 6 October 2023,Luossavaara‑Kiirunavaara AB, established in Luleå (Sweden), represented by A. Bryngelsson, A. Johansson and F. Sjövall, advokater,the other parties to the proceedings being:European Commission, represented by B. De Meester and G. Wils, acting as Agents,Kingdom of Sweden, represented by C. Meyer‑Seitz and R. Shahsavan Eriksson, acting as Agents,THE COURT (Fifth Chamber),composed of M.L. Arastey Sahún (Rapporteur), President of the Chamber, D. Gratsias, E. Regan, J. Passer and B. Smulders, Judges,Advocate General: J. Kokott,Registrar: A. Calot Escobar,having regard to the written procedure,after hearing the Opinion of the Advocate General at the sitting on 14 November 2024,gives the following
Judgment
1By its appeal, Luossavaara-Kiirunavaara AB seeks to have set aside the judgment of the General Court of the European Union of 26 July 2023, Luossavaara-Kiirunavaara v Commission (T‑244/21, EU:T:2023:428; ‘the judgment under appeal’), by which the General Court dismissed its action for annulment of Article 1(3) of Commission Decision (EU) 2021/355 of 25 February 2021 concerning national implementation measures for the transitional free allocation of greenhouse gas emission allowances in accordance with Article 11(3) of Directive 2003/87/EC of the European Parliament and of the Council (OJ 2021 L 68, p. 221; ‘the decision at issue’).
Legal context
Directive 2003/87/EC
2Article 1 of 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 Union and amending Council Directive 96/61/EC (OJ 2003 L 275, p. 32), as amended by Directive (EU) 2018/410 of the European Parliament and of the Council of 14 March 2018 (OJ 2018 L 76, p. 3) (‘Directive 2003/87’), provides:‘This Directive establishes a system for greenhouse gas emission allowance trading within the Union ([the ‘ETS’]) in order to promote reductions of greenhouse gas emissions in a cost-effective and economically efficient manner.…’
3Article 2 of Directive 2003/87, entitled ‘Scope’, is worded as follows:1. This Directive shall apply to emissions from the activities listed in Annex I and greenhouse gases listed in Annex II.2. This Directive shall apply without prejudice to any requirements pursuant to [Council] Directive 96/61/EC [of 24 September 1996 concerning integrated pollution prevention and control (OJ 1996 L 257, p. 26)].…’
4Article 10a of that directive, entitled ‘Transitional Union-wide rules for harmonised free allocation’, provides, in paragraph 1 thereof:‘The [European] Commission is empowered to adopt delegated acts in accordance with Article 23 to supplement this Directive concerning the [European] Union‑wide and fully harmonised rules for the allocation of allowances referred to in paragraphs 4, 5, 7 and 19 of this Article.The measures referred to in the first subparagraph shall, to the extent feasible, determine Union-wide ex-ante benchmarks so as to ensure that allocation takes place in a manner that provides incentives for reductions in greenhouse gas emissions and energy efficient techniques, by taking account of the most efficient techniques, substitutes, alternative production processes, high efficiency cogeneration, efficient energy recovery of waste gases, use of biomass and capture and storage of CO2, where such facilities are available, and shall not provide incentives to increase emissions. No free allocation shall be made in respect of any electricity production, except for cases falling within Article 10c and electricity produced from waste gases.For each sector and subsector, in principle, the benchmark shall be calculated for products rather than for inputs, in order to maximise greenhouse gas emissions reductions and energy efficiency savings throughout each production process of the sector or the subsector concerned.In defining the principles for setting ex-ante benchmarks in individual sectors and subsectors, the Commission shall consult the relevant stakeholders, including the sectors and subsectors concerned.…’
5Article 10b of that directive, entitled ‘Transitional measures to support certain energy intensive industries in the event of carbon leakage’, provides, in paragraph 1 thereof:‘Sectors and subsectors in relation to which the product resulting from multiplying their intensity of trade with third countries, defined as the ratio between the total value of exports to third countries plus the value of imports from third countries and the total market size for the European Economic Area (annual turnover plus total imports from third countries), by their emission intensity, measured in kgCO2, divided by their gross value added (in euros), exceeds 0,2, shall be deemed to be at risk of carbon leakage. Such sectors and subsectors shall be allocated allowances free of charge for the period until 2030 at 100% of the quantity determined pursuant to Article 10a.’
6Under Article 11 of the same directive, entitled ‘National implementation measures’:1. Each Member State shall publish and submit to the Commission, by 30 September 2011, the list of installations covered by this Directive in its territory and any free allocation to each installation in its territory calculated in accordance with the rules referred to in Article 10a(1) and Article 10c.A list of installations covered by this Directive for the five years beginning on 1 January 2021 shall be submitted by 30 September 2019, and lists for each subsequent period of five years shall be submitted every five years thereafter. Each list shall include information on production activity, transfers of heat and gases, electricity production and emissions at sub-installation level over the five calendar years preceding its submission. Free allocations shall only be given to installations where such information is provided.2. By 28 February of each year, the competent authorities shall issue the quantity of allowances that are to be allocated for that year, calculated in accordance with Articles 10, 10a and 10c.3. Member States may not issue allowances free of charge under paragraph 2 to installations whose inscription in the list referred to in paragraph 1 has been rejected by the Commission.’
7Annex I to Directive 2003/87 lists the categories of activities to which that directive applies.
Directive 2009/29/EC
8Recitals 24 and 25 of Directive 2009/29/EC of the European Parliament and of the Council of 23 April 2009 amending Directive 2003/87/EC so as to improve and extend the greenhouse gas emission allowance trading scheme of the Community (OJ 2009 L 140, p. 63) state:(24) … In the event that other developed countries and other major emitters of greenhouse gases do not participate in [the international agreement on climate change that will achieve the objective of limiting global temperature increase to 2 C], this could lead to an increase in greenhouse gas emissions in third countries where industry would not be subject to comparable carbon constraints (carbon leakage), and at the same time could put certain energy-intensive sectors and subsectors in the Community which are subject to international competition at an economic disadvantage. This could undermine the environmental integrity and benefit of actions by the Community. To address the risk of carbon leakage, the [European] Community should allocate 100% of allowances free of charge to sectors or subsectors meeting the relevant criteria. …(25) The Commission should therefore review the situation by 30 June 2010, consult with all relevant social partners, and, in the light of the outcome of the international negotiations, submit a report accompanied by any appropriate proposals. In this context, the Commission should identify which energy-intensive industry sectors or subsectors are likely to be subject to carbon leakage by 31 December 2009. It should base its analysis on the assessment of the inability of industries to pass on the cost of required allowances in product prices without significant loss of market share to installations outside the Community which do not take comparable action to reduce their emissions. Energy-intensive industries which are determined to be exposed to a significant risk of carbon leakage could receive a higher amount of free allocation; …’
Delegated Regulation (EU) 2019/331
9Commission Delegated Regulation (EU) 2019/331 of 19 December 2018 determining transitional Union-wide rules for harmonised free allocation of emission allowances pursuant to Article 10a of Directive 2003/87/EC of the European Parliament and of the Council (OJ 2019 L 59, p. 8) determines the benchmarks, in particular for products, to be used as a basis for the free allocation of greenhouse gas emission allowances for EU installations and sub-installations using the products concerned. Delegated Regulation 2019/331 also defines the values of those benchmarks.
10Recital 3 of that delegated regulation is worded as follows:‘In accordance with Article 10a(1) of Directive [2003/87], transitional Union-wide and fully-harmonised measures for the free allocation of emission allowances are to determine, to the extent feasible, ex-ante benchmarks so as to ensure that the free allocation of emission allowances takes place in a manner that provides incentives for reductions in greenhouse gas emissions and energy efficient techniques, by taking account of the most efficient techniques, substitutes, alternative production processes, high efficiency cogeneration, efficient energy recovery of waste gases, use of biomass and capture and storage of carbon dioxide, where such facilities are available. At the same time, those measures must not provide incentives to increase emissions. In order to reduce incentives to flare waste gases, other than for safety flaring, the number of allowances allocated free of charge for relevant sub-installations should be reduced by the historical emissions from waste gases flared, with the exception of safety flaring, and not used for the purpose of the production of measurable heat, non-measurable heat or electricity. However, taking into account the special treatment accorded by Article 10a(2) of Directive [2003/87], and to provide for a transition, this reduction should only apply from 2026.’
11Annex I to that delegated regulation, entitled ‘Benchmarks’, defines, in point 1 thereof, product benchmarks and system boundaries without consideration of exchangeability of fuel and electricity in the following manner:Product benchmark | Definition of products covered | Definition of processes and emissions covered (system boundaries) | Starting point for determination of annual reduction rate for benchmark value update (allowances/t)… | | |Sintered ore | Agglomerated iron-bearing product containing iron ore fines, fluxes and iron-containing recycling materials with the chemical and physical properties such as the level of basicity, mechanical strength and permeability required to deliver iron and necessary flux materials into iron ore reduction processes. Expressed in tonnes of sintered ore as leaving the sinter plant. | All processes directly or indirectly linked to the process units sinter strand, ignition, feedstock preparation units, hot screening unit, sinter cooling unit, cold screening unit and steam generation unit are included. | 0,171…’
Decision 2011/278/EU
12Commission Decision 2011/278/EU of 27 April 2011 determining transitional Union-wide rules for harmonised free allocation of emission allowances pursuant to Article 10a of Directive 2003/87/EC of the European Parliament and of the Council (OJ 2011 L 130, p. 1) was repealed, with effect from 1 January 2021, by Delegated Regulation 2019/331.
13Recital 4 of that decision stated:‘To the extent feasible, the Commission has developed benchmarks for products, as well as intermediate products that are traded between installations, produced from activities listed in Annex I to Directive [2003/87]. In principle, for each product one benchmark should be defined. Where a product is a direct substitute of another product, both should be covered by the same product benchmark and the related product definition.’
The decision at issue
14Under recitals 1 to 5, 12 and 13 of the decision at issue:(1) Auctioning is the rule for the allocation of emission allowances from 2013 onwards to operators of installations within the scope of the [ETS]. Eligible operators will continue to receive free allowances in the trading period 2021 to 2030. The amount of allowances that each such operator receives is determined based on Union-wide harmonised rules set out in Directive [2003/87] and Commission Delegated Regulation [2019/331].(2) Member States were required to submit to the Commission by 30 September 2019 their National Implementation Measures (NIMs), comprising a list of installations covered by Directive [2003/87] on their territory and including information on production activity, transfers of heat and gases, electricity production and emissions at sub-installation level, over the five years of the baseline period (2014-2018) in accordance with Annex IV to Delegated Regulation [2019/331].(3) To ensure data quality and comparability, Member States submitted their NIMs using the electronic template provided by the Commission in accordance with Article 14(1) of Delegated Regulation [2019/331], which included the relevant data per installation. Member States also submitted a methodology report setting out the data collection process conducted by their authorities.(4) Given the wide range of information and data submitted, the Commission first analysed the completeness of all the NIMs. Where the Commission noted that submissions were incomplete, it requested additional information from the Member States concerned. In reply to those requests, the relevant authorities submitted additional relevant information in order to complete the submitted NIMs.(5) The Commission then assessed the NIMs against the criteria contained in Directive [2003/87] and in Delegated Regulation [2019/331], taking into account the Commission’s guidance documents to Member States published between January and April 2020. Those consistency checks constituted the second phase of the NIMs assessment.…(12) Sweden proposed the inclusion of one installation whose emissions originate from a lime kiln in which lime mud, a residue from the recovery of the cooking chemicals in kraft pulp mills, is calcined. The process of recovering lime from lime mud is covered by the definitions of the system boundaries of short/long fibre kraft pulp. Thus, the concerned installation imports an intermediate product that is covered by a product benchmark. Given that emissions should not be double-counted, as recalled in Article 16(7) of Delegated Regulation [2019/331], the free allocation data of that installation is to be rejected.(13) Sweden proposed that three installations would use different benchmark sub-installations compared to what they used in phase 3 NIMs for production of iron ore pellets. Sweden proposed the use of a sintered ore benchmark sub-installation for the production of iron ore pellets, while in phase 3 heat and fuel benchmarks were used. However, the sintered ore benchmark is defined in Annex I to Delegated Regulation [2019/331], and the definition of products as well as the definition of processes and emissions covered by that product benchmark are tailored to sinter production and do not include iron ore pellets. Moreover, Article 10a(2) of Directive [2003/87] requires an update of the benchmark values for phase 4, and does not provide for any adjustment of the interpretation of the benchmark definitions. The data submitted for the production of iron ore pellets based on a sintered ore sub-installation are therefore to be rejected.’
15Article 1(3) of that decision provides:‘The data corresponding to the product benchmark sub-installations of the installations listed in Annex III to this Decision on the lists of installations covered by Directive [2003/87] and submitted to the Commission pursuant to Article 11(1) of Directive [2003/87] are rejected.’
16Annex III to that decision, entitled ‘Installations using sintered ore product benchmark instead of heat or fuel benchmarks’, mentions, in that respect, the identifiers of the following installations:SE000000000000497 | SE000000000000498 | SE000000000000499
Background to the dispute
17The background to the dispute, as is apparent from paragraphs 2 to 6 of the judgment under appeal, may be summarised as follows.
18The appellant is a Swedish State-owned mining company. It produces, inter alia, iron ore, the main raw material used for the production of steel. The present case concerns three of its installations, referred to in Annex III to the decision at issue, namely the installations bearing the identifiers SE‑497, SE‑498 and SE‑499, situated respectively in Kiruna, Malmberget (Gällivare) and Svappavaara in Sweden (‘the installations at issue’).
19The installations at issue are covered by the ETS established by Directive 2003/87.
20As is apparent from the decision at issue, from the year 2013 onwards, auctioning became the rule for the allocation of emission allowances to operators of installations within the scope of the ETS. However, eligible operators will continue to receive free allowances in the trading period 2021 to 2030, also known as the ‘fourth trading period’. During that period, the amount of allowances that each such operator receives is determined based on the harmonised rules set out in Directive 2003/87 and in Delegated Regulation 2019/331.
21In 2019, in order to prepare the transitional free allocation for that period, beginning 1 January 2021, the Kingdom of Sweden, through the Naturvårdsverket (Environmental Protection Agency, Sweden), submitted to the Commission, in accordance with Article 11 of Directive 2003/87, a list of the installations covered by that directive and the free allowances allocated to each installation. In that context, that Member State proposed that sub-installations of the installations at issue be included in the list for free allocation of allowances on the basis of the product benchmark for sintered ore, as defined in point 1 of Annex I to Delegated Regulation 2019/331 (‘the benchmark for sintered ore’), whereas heat and fuel benchmarks had been used in that respect previously.
22Following its analysis of the information sent by the Kingdom of Sweden in the light of the criteria set out by Directive 2003/87 and Delegated Regulation 2019/331, the Commission decided to reject that Member State’s proposal for the reasons set out in recital 13 of the decision at issue.
The procedure before the General Court and the judgment under appeal
23By application lodged at the Registry of the General Court on 4 May 2021, the appellant brought an action for annulment of the decision at issue.
24In support of its action, the appellant relied on six pleas in law, alleging (i) infringement of Annex I to Delegated Regulation 2019/331 and of Article 10a(1) of Directive 2003/87, (ii) infringement of the principles of equal treatment and non-discrimination, (iii) breach of the European Union’s obligations and commitments under international environmental law, (iv) breach of the duty of the competent institution to examine carefully and impartially all the relevant aspects of the individual case, and (v) breach of the obligation to state reasons laid down in Article 296 TFEU. Finally, by its sixth plea, submitted in the alternative, the appellant sought a declaration, pursuant to Article 277 TFEU, that Delegated Regulation 2019/331 was invalid in so far as it applied to the decision at issue.
25By the judgment under appeal, the General Court rejected all the pleas raised by the appellant and, consequently, dismissed the action in its entirety.
Forms of order sought by the parties to the appeal
26By its appeal, the appellant claims that the Court should:– set aside the judgment under appeal in its entirety;– annul Article 1(3) of the decision at issue, and– order the Commission to pay the costs.
27The Commission contends that the Court should:– dismiss the appeal and– order the appellant to pay the costs.
28The Kingdom of Sweden claims that the Court should uphold the appeal.
The appeal
29The appellant puts forward five grounds of appeal, the first and third of which are supported by the Kingdom of Sweden.
First ground of appeal
Arguments of the parties
30The first ground of appeal is divided into two parts and alleges, in essence, that the General Court misinterpreted the expression ‘substitutes’ in Article 10a(1) of Directive 2003/87.
31By the first part of the first ground of appeal, the appellant submits that, in paragraph 88 of the judgment under appeal, the General Court was wrong to find that it was for the appellant to establish that iron ore pellets were ‘directly substitutable’ for sintered ore, when the word ‘directly’ appears neither in Directive 2003/87, in the decision at issue nor in Delegated Regulation 2019/331. Accordingly, the General Court infringed Article 10a(1) of Directive 2003/87 by adopting an interpretation of that provision which has the effect of altering the legal test applicable to substitutes in the determination of benchmarks for the allocation of allowances.
32It states, first, that the wording of that provision does not allow for such an interpretation. Although the term ‘substitute’ designates a product which may replace another product for a certain use, the fact remains that a substitute is not necessarily identical or comparable to the thing that it is replacing.
33Thus, in the judgment of 26 July 2017, ArcelorMittal Atlantique et Lorraine (C‑80/16, EU:C:2017:588, paragraph 45), the Court of Justice held, in essence, that, if one product can replace another for the same use, the products concerned are ‘substitutes’, within the meaning of Article 10a(1) of Directive 2003/87, which was the case for the sintered ore and pellets used in the installation at issue in the case which gave rise to that judgment.
34Second, relying on the context into which the said provision fits, the appellant submits that the provision must be interpreted broadly and that, therefore, the term ‘substitutes’ which appears in that provision cannot simply refer to the same products resulting from different methods of production.
35Third, that interpretation is supported by the objective of Article 10a of Directive 2003/87, namely the reduction of greenhouse gas emissions by taking account of the most efficient techniques.
36According to the appellant, in the light of that objective, a product which generates fewer emissions, such as iron ore pellets, than another substitutable product, such as sintered ore, cannot be excluded from the benchmark for sintered ore.
37The appellant submits, fourth, that the term ‘substitutes’, within the meaning of Article 10a(1) of that directive, must be interpreted in accordance, first, with the sub-objective of preserving the integrity of the internal market and of conditions of competition and, second, with the principle of equal treatment. That means that that term may not be interpreted in such a way as to distort competition or to treat installations in similar situations differently.
38By the second part of the first ground of appeal, the appellant complains, in the first place, that the General Court erred in law in holding, in paragraph 69 of the judgment under appeal, that it follows from the words ‘to the extent feasible’ in Article 10a(1) of Directive 2003/87 that that provision imposes no obligation of result on the Commission.
39In reality, that term should be interpreted as referring to the very fact that it is possible to adopt a benchmark.
40Where such a benchmark is adopted by the Commission, that institution cannot depart from the obligation to determine its content, so as to encourage reductions of greenhouse gas emissions and the use of energy efficient techniques.
41In the second place, the General Court, in paragraphs 93 to 99 of the judgment under appeal, incorrectly replaced a test of the substitutability of the products with a test of ‘similarity’ between them, relying on irrelevant differences between sintered ore and iron ore pellets, with the result that the term ‘substitutes’, within the meaning of Article 10a(1) of Directive 2003/87, was interpreted too restrictively and contrary to its ordinary meaning. Furthermore, the General Court failed to interpret that term in accordance with the objective pursued by the provision of which it forms part – in this case, the reduction of greenhouse gas emissions – and in compliance with the principle of equal treatment.
42The Commission contends that the first ground of appeal is unfounded.
Findings of the Court
–Second part of the first ground of appeal
43So far as concerns the second part of the first ground of appeal, which it is appropriate to examine in the first place, it must be borne in mind that, in paragraph 69 of the judgment under appeal, the General Court held that the general objective of incentivising the reduction of greenhouse gas emissions by rewarding low-emission technologies over technologies which are inferior from an emissions point of view is to be achieved ‘to the extent feasible’, according to Article 10a(1) of Directive 2003/87, recital 4 of Decision 2011/278 or recital 3 of Delegated Regulation 2019/331. According to the General Court, the Commission therefore has no obligation of result in that regard. A technique or an activity may in itself have advantages over another in terms of efficiency, but that other technique or activity may also have its own interests, liable as such to be taken into account under the legislation in an overall assessment comparing one with the other. Moreover, in the light of the content of the sector reports, the other technique or activity in question, while being less efficient, may nevertheless enable the recycling of materials which would otherwise become waste.
44In paragraph 70 of the judgment under appeal, the General Court found that it was therefore appropriate for the Commission, in order to assess several techniques or activities, to take account of all the parameters that characterise them rather than focus on only one of them.
45In that regard, it should be recalled that, according to the first sentence of the second subparagraph of Article 10a(1) of Directive 2003/87, the measures adopted by the Commission in accordance with the first subparagraph of that Article 10a(1) are, to the extent feasible, to determine Union-wide ex-ante benchmarks so as to ensure that allocation takes place in a manner that provides incentives for reductions in greenhouse gas emissions and energy efficient techniques, by taking account of the most efficient techniques, substitutes, alternative production processes, high efficiency cogeneration, efficient energy recovery of waste gases, use of biomass and capture and storage of CO2, where such facilities are available, and are not to provide incentives to increase emissions.
46As the Advocate General observed in point 80 of her Opinion, the very wording of that provision shows that, in adopting the measures at issue, the Commission must take various factors into account.
47Even though the first sentence of the second subparagraph of Article 10a(1) of Directive 2003/87 refers expressly to the objective of incentivising the use of effective techniques to reduce greenhouse gas emissions, the fact remains that, in accordance with the case-law of the Court, that principal objective must be achieved in compliance with a series of sub-objectives. As indicated in recitals 5 and 7 of Directive 2003/87, those sub-objectives include the safeguarding of economic development and employment and the preservation of the integrity of the internal market and of conditions of competition (judgment of 22 June 2016, DK Recycling und Roheisen v Commission, C‑540/14 P, EU:C:2016:469, paragraph 49 and the case-law cited).
48In the light of those considerations, it must be held that the General Court did not commit an error of law in holding, in paragraph 69 of the judgment under appeal, that, in the context of the development of benchmarks, the Commission must pursue a general objective of incentivising the reduction of greenhouse gas emissions to the extent feasible, that obligation not having the character of an obligation of result.
49Consequently, the second part of the first ground of appeal must be rejected as unfounded.
–First part of the first ground of appeal
50In order to examine the first part of the first ground of appeal, by which the appellant challenges the examination of the substitutability of the products at issue carried out in the judgment under appeal, it should be recalled that, in paragraphs 86 and 87 of that judgment, the General Court relied on recital 4 of Decision 2011/278 and on paragraph 47 of the judgment of 26 July 2017, ArcelorMittal Atlantique et Lorraine (C‑80/16, EU:C:2017:588), in order to conclude, in paragraph 88 of the judgment under appeal, that the appellant was right to claim that, if it were shown that iron ore pellets were directly substitutable for sintered ore, it would have been necessary, in principle, to ensure that those two products were covered by the same product benchmark and by the corresponding product definition.
51In paragraphs 93 to 99 of the judgment under appeal, the General Court examined, in the exercise of its exclusive jurisdiction to appraise the facts, the direct substitutability of the said products.
52In paragraph 94 of that judgment, it found that, despite certain similarities between sintered ore and iron ore pellets, as it was possible to use both of those products for the production of steel in a blast furnace through technical adaptations in the event of a switch from one to the other, they nevertheless had differences.
53Among those differences, the General Court referred, in paragraph 95 of the judgment under appeal, to the fact that the production of each of those two products was based on a different substrate, with the result that the iron content of sintered fines, which was between 55 and 58%, typically differed from that of iron ore pellets, which was between 62 and 66%.
54In paragraph 96 of the judgment under appeal, the General Court found that, first, during the production of iron ore pellets, the appellant needed smaller quantities of coke breeze than those used for the production of sintered ore and, second, in the latter production, iron-bearing residues were recycled directly as inputs, whereas the production of iron ore pellets required that another solution be found in that regard.
55In paragraph 97 of that judgment, the General Court highlighted other differences between those products in terms of their composition and respective characteristics as well as their production process.
56In paragraph 98 of the judgment, the General Court added that, given that the greenhouse gas emission intensity during the production of sintered ore was approximately six to seven times higher than during the production of iron ore pellets, the inclusion of new categories of installations in the benchmark for sintered ore risked causing a significant imbalance for installations falling under that benchmark.
57In paragraph 99 of the judgment under appeal, the General Court concluded that those differences proved sufficient for the Commission to be justified in considering, on the basis of its broad discretion, that there was no direct substitutability between iron ore pellets and sintered ore so far as concerns the determination of the installations concerned by the benchmark for sintered ore.
58In that regard, it should be recalled that, as the Court of Justice held in paragraphs 31 and 37 of the judgment of 26 July 2017, ArcelorMittal Atlantique et Lorraine (C‑80/16, EU:C:2017:588), and as the General Court itself noted in paragraphs 13 to 15 of the judgment under appeal, the Commission has broad discretion in determining the benchmarks in individual sectors or subsectors under Article 10a(2) of Directive 2003/87. That exercise entails, on the institution’s part, choices and complex technical and economic assessments as well. The legality of a measure adopted in that area can be affected only if the measure is manifestly inappropriate.
59In that judgment, the Court examined the validity of Decision 2011/278, which, like the decision at issue, was adopted on the basis of Directive 2003/87, defining the benchmarks for the products now listed in Annex I to Delegated Regulation 2019/331.
60As recital 13 of the decision at issue states, on the one hand, the benchmark for sintered ore is defined in point 1 of Annex I to Delegated Regulation 2019/331, the definition of products as well as the definition of the processes and emissions covered by that product benchmark being tailored to the production of sintered ore and not including iron ore pellets. On the other hand, that recital specifies that Article 10a(2) of Directive 2003/87 requires an update of the benchmark values for phase 4, and does not provide for any adjustment of the interpretation of the benchmark definitions.
61Decision 2011/278 stated, in recital 4 thereof, that, where a product is a direct substitute of another product, both ought to be covered by the same product benchmark and the related product definition.
62It was in that context that, in paragraph 40 of the judgment of 26 July 2017, ArcelorMittal Atlantique et Lorraine (C‑80/16, EU:C:2017:588), the Court examined whether the products at issue in that case could be substituted for one another, referring to their characteristics and composition.
63In those circumstances, it must be held that the General Court committed no error of law in taking into account, in paragraphs 94 to 98 of the judgment under appeal, the respective characteristics and composition of sintered ore and iron ore pellets in order to ascertain whether those products were directly substitutable.
64The General Court was therefore entitled, in paragraph 99 of the judgment under appeal, to hold, in essence, that, in the light of the broad discretion enjoyed by the Commission, that institution could lawfully decide, by the decision at issue, not to apply the benchmark for sintered ore to the iron ore pellets produced by the installations at issue, given the lack of direct substitution between those products on account of their different characteristics and compositions.
65The examination necessary in order to adopt such a decision, involving an assessment of the characteristics of the product in question, its composition and its production, falls within the sphere of complex technical assessment, in which the Commission has broad discretion (see, by analogy, judgment of 26 July 2017, ArcelorMittal Atlantique et Lorraine, C‑80/16, EU:C:2017:588, paragraph 44).
66That conclusion is not invalidated by the appellant’s argument that, in paragraph 42 of the judgment of 26 July 2017, ArcelorMittal Atlantique et Lorraine (C‑80/16, EU:C:2017:588), the Court of Justice found that the Commission had been able validly to consider the pellets and the sintered ore at issue in the case giving rise to that judgment to be substitutable products.
67As the General Court noted, in essence, in paragraphs 106 to 112 of the judgment under appeal, that finding was made by the Court of Justice in the specific context of that case, in which, as is apparent from paragraphs 42, 44 to 46 and 48 of the judgment of 26 July 2017, ArcelorMittal Atlantique et Lorraine (C‑80/16, EU:C:2017:588), at issue was an integrated steel plant including both a production unit for pellets and a production unit for sintered ore which were connected in order to provide a mixture directly feeding blast furnaces, that mixture being capable, owing to its properties, of being used in blast furnaces as a direct substitute for sintered ore.
68However, in the light of the file before the Court, the present case is not characterised by a specific context wholly analogous to that of the case which gave rise to the judgment of 26 July 2017, ArcelorMittal Atlantique et Lorraine (C‑80/16, EU:C:2017:588).
69With regard to the appellant’s argument, referred to in paragraph 35 of the present judgment, by which it submits, in essence, that the General Court disregarded the objective pursued by Article 10a of Directive 2003/87, namely the reduction of greenhouse gas emissions by taking account of the most efficient techniques, it should be pointed out that the General Court noted, in paragraph 68 of the judgment under appeal, that it is true that one of the objectives of Directive 2003/87 is, as is apparent in particular from the second subparagraph of Article 10a(1) thereof, to incentivise the reduction of greenhouse gas emissions by rewarding low-emission technologies over technologies which are inferior from an emissions point of view, with the result that the measures taken to establish ex-ante benchmarks must have the prospect of encouraging the adoption of the most effective techniques for reducing emissions.
70However, as the General Court correctly indicated in paragraph 99 of the judgment under appeal, and as is apparent from the examination of the second part of the first ground of appeal, Directive 2003/87 pursues various objectives, since, according to Article 1 thereof, the reduction of greenhouse gas emissions must be carried out ‘in a cost-effective and economically efficient manner’. Thus, as the General Court emphasised in paragraph 69 of that judgment, that objective of reducing greenhouse gas emissions is to be achieved, in accordance with the second subparagraph of Article 10a(1) of that directive, ‘to the extent feasible’, in the sense that a less efficient greenhouse gas emission saving technique or activity may, in the context of an overall assessment, have its own advantages in terms of economic efficiency.
71In that regard, the General Court found, in paragraph 96 of the judgment under appeal, in the exercise of its exclusive jurisdiction to appraise the facts, that the iron-bearing residues resulting from the production of sintered ore were recycled directly as inputs, whereas that is not the case in the context of the production of iron ore pellets.
72In addition, in paragraph 98 of the judgment under appeal, the General Court noted, also in the exercise of its exclusive jurisdiction to appraise the facts, that, the greenhouse gas emission intensity during the production of sintered ore being approximately six to seven times higher than during the production of iron ore pellets, the inclusion of new categories of installations in the benchmark for sintered ore risked causing a significant imbalance for installations then falling under that benchmark.
73The risk of such a significant imbalance must be understood, in particular, in the light of recital 24 of Directive 2009/29 which emphasises the fact that the European Union has taken steps to avoid, first, an increase in greenhouse gas emissions in third countries where industry would not be subject to restrictions comparable to those to which carbon emissions are subject within the European Union (‘carbon leakage’) and, second, economic disadvantage for certain energy-intensive sectors and subsectors in the European Union which are subject to international competition. In the eyes of the EU legislature, that phenomenon could undermine the environmental integrity and benefit of actions by the European Union. To address the said risk of carbon leakage, the said legislature decided to allocate 100% of allowances free of charge to sectors or subsectors meeting the relevant criteria.
74It is common ground that the Commission has thus recognised both the mining of iron ores and the manufacture of basic iron and steel and of ferro-alloys as being sectors in which there is a risk of ‘carbon leakage’, within the meaning of Article 10b(1) of Directive 2003/87.
75It is in that context that the Commission adopted the decision at issue which states, in recital 13 thereof, that the benchmark for sintered ore is defined in Annex I to Delegated Regulation 2019/331, and the definition of products as well as the definition of the processes and emissions covered by that product benchmark are tailored to the production of sintered ore and do not include iron ore pellets.
76In so far as, as the appellant has acknowledged in its appeal, the production of iron ore pellets generates fewer greenhouse gas emissions than the production of sintered ore, the producers of those pellets receive, free of charge, a correspondingly smaller amount of allowances, according to the heat and fuel benchmarks referred to in the said recital 13. It follows that, as the Advocate General observed, in essence, in point 108 of her Opinion, if the production of iron ore pellets were included in the benchmark for sintered ore, the value of that benchmark would be lower, with the result that the production of sintered ore would benefit from only a fraction of the emission allowances required in respect of that production.
77As the Advocate General emphasised, in essence, in point 107 of her Opinion, however, the free allocation of emission allowances in respect of the production, first, of iron ore pellets and, second, of sintered ore corresponds to the choice made by the EU legislature in the field of environmental protection as regards combating ‘carbon leakage’, referred to in paragraph 73 of the present judgment, in order to ensure, first, that neither iron ore pellet producers nor sintered ore producers have to purchase emission allowances when using the most efficient methods and, second, that they do not cease production or relocate it from the European Union to third countries on account of the cost of emission allowances.
78In the light of those considerations, the General Court was entitled to hold, in paragraph 99 of the judgment under appeal, that the Commission was justified in considering, on the basis of its broad discretion and in the light of the various objectives pursued by Directive 2003/87, that a sub-installation for the production of iron ore pellets could not fall within the benchmark for sintered ore.
79For those reasons, the appellant’s arguments relating to the equal treatment of economic operators within the internal market and to the preservation of the conditions of undistorted competition cannot call into question the assessment made by the General Court in paragraph 98 of the judgment under appeal, either.
80In those circumstances, the first part of the first ground of appeal must be rejected as unfounded.
81Consequently, the first ground of appeal must be rejected in its entirety as unfounded.
Second ground of appeal
Arguments of the parties
82By its second ground of appeal, the appellant claims that the General Court committed an error of law in paragraphs 93 to 99 of the judgment under appeal by replacing the reasoning relating to the Commission’s assessment of substitutability in the decision at issue with its own reasoning concerning that assessment.
83First of all, the appellant argues that the reasons mentioned in paragraphs 93 to 99 of the judgment under appeal are not reflected in the wording of the decision at issue. The only reasons given in support of that decision are that the benchmark is tailored to the production of sintered ore and that Article 10a(1) of Directive 2003/87 does not provide for any adjustment of the interpretation of the benchmark definitions.
84It maintains, next, that, even if the correspondence exchanged between the Commission and the Kingdom of Sweden were to be considered as part of the reasoning for the decision at issue, that correspondence does not mention a number of characteristics which were nevertheless taken into consideration by the General Court, namely the provenance of the iron ore, beneficiation, iron content and a haematite/magnetite distinction, the lesser quantity of coke breeze needed for the production of iron ore pellets, or the fact that the inclusion, in the benchmark for iron ore, of installations for the production of those pellets risked causing a significant imbalance for installations then falling under that benchmark.
85Last, the appellant claims, relying on the judgment of 6 October 2021, Sigma Alimentos Exterior v Commission (C‑50/19 P, EU:C:2021:792), that the General Court, without reference to the decision at issue and on the basis of its own interpretation, established a rationale for the decision at issue ex post facto, on the basis of specific facts invoked for the first time in the proceedings before it. Consequently, by substituting its own reasoning for that of the decision at issue, the General Court committed an error of law.
86The Commission contends that the second ground of appeal should be rejected.
Findings of the Court
87In paragraphs 93 to 99 of the judgment under appeal, which are the subject of the second ground of appeal, the General Court examined the appellant’s argument, raised in the first plea of its application at first instance, based on the alleged infringement, by the Commission, of Annex I to Delegated Regulation 2019/331 and of Article 10a(1) of Directive 2003/87, concerning the direct substitutability of the products at issue.
88That examination was preceded, first, by the finding, in paragraph 89 of the judgment under appeal, that it was not apparent from the decision at issue that the Commission had carried out a detailed analysis of the direct substitutability between the two products. Second, in paragraph 90 of the judgment under appeal, the General Court, in the exercise of its exclusive jurisdiction to appraise the facts and evidence, referred to the exchanges between the Kingdom of Sweden and the Commission, at the end of which the Commission clearly indicated to the Swedish authorities that iron ore pellets were not directly substitutable for sintered ore.
89In paragraph 91 of the judgment under appeal, the General Court considered that it was in that context that the various arguments put forward by the parties in favour of or against the direct substitutability between iron ore pellets and sintered ore had to be assessed.
90In that regard, it should be pointed out that, admittedly, in the first plea of its application at first instance, the appellant maintained that the reasons for excluding the production of iron ore pellets from the benchmark for sintered ore, set out in recital 13 of the decision at issue, were ‘unconvincing’.
91However, the line of argument developed in support of that first plea related not to the Commission’s breach of its obligation to state reasons under the second paragraph of Article 296 TFEU, but to the lack of conformity of the decision at issue with Annex I to Delegated Regulation 2019/331 and with Article 10a(1) of Directive 2003/87, in view of the Commission’s choice to refuse to include the production of iron ore pellets in the benchmark for sintered ore.
92In reality, the breach of the Commission’s obligation to state reasons was alleged in the fifth plea of the application at first instance, which was examined by the General Court in paragraphs 149 to 160 of the judgment under appeal. Those latter paragraphs, however, are the subject of the fifth ground of appeal.
93Accordingly, by its line of argument developed under the second ground of appeal, alleging that the General Court committed an error of law in its examination of the Commission’s obligation to state reasons, the appellant cannot call into question the line of argument developed in the judgment under appeal relating to the merits of the decision at issue.
94The second ground of appeal must therefore be rejected as unfounded.
Third ground of appeal
Arguments of the parties
95By its third ground of appeal, the appellant claims that the General Court committed an error of law, in paragraphs 116 and 117 of the judgment under appeal, in that it distorted evidence therein, namely the expert opinion of Mr S. Kallo, the chief technology officer and metallurgist of the steel company SSAB Europe, responsible for SSAB’s production in Sweden and Finland (‘Mr Kallo’s opinion’).
96It states, in that regard, that the evidence referred to by the General Court in those paragraphs of the judgment under appeal cannot suffice to justify the General Court’s conclusion, in paragraph 99 of that judgment, relating to the lack of direct substitutability between iron ore pellets and sintered ore.
97In support of its ground of appeal, the appellant submits two tables setting out, in one column, the paragraphs of the judgment under appeal in which the General Court relied on that expert opinion and in which, in that context, it allegedly distorted that individual’s testimony and, in the other column opposite, the corresponding passages of Mr Kallo’s opinion, as were submitted to the General Court.
98The appellant thus submits, first, that, in paragraph 117 of the judgment under appeal, the General Court misrepresented paragraphs 15 and 19 of Mr Kallo’s opinion, in so far as it inter alia considered, in that paragraph of the judgment under appeal, that it was apparent from that opinion that an installation’s switching from a sintered ore feed to an iron ore pellet feed, in diverse proportions, required test runs and adaptations. According to the appellant, however, Mr Kallo’s opinion indicated that it was easy to change the proportions of the two products used.
99Second, the General Court found, in paragraph 116 of the judgment under appeal, that switching from a sintered ore feed to an iron ore pellet feed could not be done ‘by the press of a button’, whereas Mr Kallo’s opinion expressly states that ‘the raw material input is automatically calculated and altered accordingly’.
100Third, the appellant submits that, in paragraph 116 of the judgment under appeal, the General Court also found that ‘substantial adjustments are necessary to allow the switch from one feed to another’. That finding is, in its view, also incompatible with Mr Kallo’s opinion, according to which, ‘as the sinter is produced at the site of the steel plant, such adaptations can be made on very short notice’.
101The Commission contends that the third ground of appeal should be rejected.
Findings of the Court
102In paragraphs 100 to 118 of the judgment under appeal, the General Court examined whether the Commission had made a manifest error of assessment by excluding the production of iron ore pellets from the benchmark for sintered ore and, in so doing, by failing to recognise, contrary to the solution adopted by the Court of Justice in paragraph 42 of the judgment of 26 July 2017, ArcelorMittal Atlantique et Lorraine (C‑80/16, EU:C:2017:588), with regard to the integrated steel plant at issue in the case which gave rise to that judgment, that such pellets are substitutable for sintered ore.
103In paragraph 114 of the judgment under appeal, the General Court ruled out the existence of such a manifest error of assessment, relying, on the one hand, on the conclusion set out in paragraph 99 of that judgment, which has been challenged unsuccessfully by the appellant in the first ground of the present appeal.
104On the other hand, first, the General Court found, in paragraph 115 of the judgment under appeal, that the examples of exclusive use of iron ore pellets to feed the blast furnaces, referred to by the appellant, showed that they were fall-back approaches or tested solutions, which were, moreover, relatively old.
105That finding, however, is not challenged by the appellant in the present appeal.
106Second, in paragraphs 116 and 117 of the judgment under appeal, the General Court relied on a report by the consultancy firm CRU and on Mr Kallo’s opinion to support its conclusion that the Commission had not made a manifest error of assessment in not considering that, in the case at hand, iron ore pellets could be regarded as substitutable for sintered ore.
107In that regard, it should be held that, on the basis of the examination of the substitutability of those products carried out by the General Court in paragraphs 94 to 99 of the judgment under appeal, which has been challenged unsuccessfully by the first ground of appeal, and in the light of the finding contained in paragraph 115 of the judgment under appeal, which, as is apparent from paragraph 105 of the present judgment, is not being challenged at the stage of the present appeal, the General Court could validly find that the Commission had not made any manifest error of assessment in adopting the decision at issue.
108Moreover, and in any event, as regards the allegation that the General Court distorted the evidence appearing in paragraphs 116 and 117 of the judgment under appeal, it should be borne in mind that, in accordance with settled case-law, the appraisal of the facts does not constitute, save where the clear sense of that evidence is distorted, a question of law which is subject, as such, to review by the Court of Justice. There is such distortion where, without recourse to new evidence, the assessment of the existing evidence is clearly incorrect or manifestly at odds with its wording. However, that distortion must be obvious from the documents on the Court’s file, without there being any need to carry out a new assessment of the facts and evidence (judgment of 27 April 2023, Fondazione Cassa di Risparmio di Pesaro and Others v Commission, C‑549/21 P, EU:C:2023:340, paragraph 73 and the case-law cited).
109In the present case, it is apparent from paragraph 15 of Mr Kallo’s opinion, annexed to the application at first instance, that, admittedly, altering the proportions of iron ore pellets and sintered ore for blast furnace feed is easy and occurs regularly at most steel plants. However, in paragraph 22 of that opinion, it is nevertheless specified that, if the alterations in that regard are significant or include a raw material that has never previously been used in the installation in question, they are normally preceded by trial runs to evaluate their impact on the process, productivity and total costs. In addition, it is apparent from paragraph 25 of the said opinion that, in order to allow for a more permanent change of the installation so as to use a feed consisting solely of iron ore pellets, it may be necessary to update internal logistics to adapt to a new raw material flow, in order to optimise further the operations carried out within the installation concerned.
110The decision at issue, however, concerns the Commission’s refusal to include iron ore pellets in the benchmark for sintered ore as regards the installations at issue and not the specific case of an integrated steel plant, as referred to in paragraph 42 of the judgment of 26 July 2017, ArcelorMittal Atlantique et Lorraine (C‑80/16, EU:C:2017:588).
111In those circumstances, the General Court did not distort Mr Kallo’s opinion by finding, in paragraph 117 of the judgment under appeal, in essence, that it was apparent from that opinion, notwithstanding his conclusion that iron ore pellets are immediate substitutes for sintered ore, that switching from sintered ore to iron ore pellets, in diverse proportions, required test runs and adaptations as well as preparatory work, including adapting internal logistics to a new raw material flow.
112The third ground of appeal must therefore be rejected as unfounded.
Fourth ground of appeal
Arguments of the parties
113By its fourth ground of appeal, the appellant submits that the General Court committed an error of law in finding, in paragraph 148 of the judgment under appeal, that, contrary to what the appellant argued in support of the fourth plea of its application at first instance, the Commission had fulfilled its duty to examine carefully and impartially all the relevant aspects of the individual case.
114It maintains that, before adopting the decision at issue, the Commission did not carry out such a careful and impartial examination. Indeed, the General Court found, in paragraph 89 of the judgment under appeal, that that decision did not show that the Commission had carried out a detailed analysis of the direct substitutability between the two products concerned. In particular, assessing the relative ease or difficulty associated with controlling the basicity of the blast furnace burden when switching inputs requires consulting a metallurgy expert.
115The Commission contends that that ground of appeal should be rejected.
Findings of the Court
116In the examination of the first plea raised at first instance, the General Court found, in paragraph 89 of the judgment under appeal, that it was not actually apparent from the decision at issue that the Commission had carried out a detailed analysis of the direct substitutability between the two products, that institution having confined itself to examining the wording of the benchmark for sintered ore and to recalling that it was not required to make an ‘adjustment of the interpretation of the benchmark definitions’.
117However, in paragraph 90 of the judgment under appeal, the General Court mentioned the exchanges between the Commission and the Kingdom of Sweden, which submitted to that institution, before the adoption of the decision at issue, proposals taking into account the interests of the operators of the installations at issue and was thus closely involved in the procedure which culminated in the adoption of that decision. In those exchanges, the Commission had clearly indicated to the Swedish authorities that it considered that iron ore pellets were not directly substitutable for sintered ore, in particular because of what the Court of Justice had decided in the judgment of 26 July 2017, ArcelorMittal Atlantique et Lorraine (C‑80/16, EU:C:2017:588).
118In the light of the content of those exchanges, the General Court was entitled to conclude, in paragraph 147 of the judgment under appeal, that the Commission could not be criticised for having failed in its duty to examine such arguments carefully and impartially during the administrative procedure.
119In those circumstances, it must be held that the General Court did not commit an error of law in deciding, in paragraph 148 of the judgment under appeal, that the fourth plea of the application at first instance had to be rejected.
120The fourth ground of appeal must therefore be rejected as unfounded.
Fifth ground of appeal
Arguments of the parties
121By its fifth ground of appeal, the appellant complains that the General Court committed an error of law in finding, in paragraph 160 of the judgment under appeal, that the Commission had fulfilled its obligation to state reasons.
122The appellant submits that, in view of the technical complexity of the assessment of substitutability, the decision at issue should have contained a sufficient statement of the scientific reasons justifying its conclusion. In that regard, it maintains that the Commission was under an obligation to explain, in the decision at issue, not only whether or not iron ore pellets were substitutable for sintered ore, but also why it considered that that was not the case here.
123The appellant refers, to that end, to the judgments of the General Court of 2 July 1992, Dansk Pelsdyravlerforening v Commission (T‑61/89, EU:T:1992:79, paragraph 131); and of 14 May 1998, Stora Kopparbergs Bergslags v Commission (T‑354/94, EU:T:1998:104, paragraph 126); and of the Court of Justice of 26 November 1981, Michel v Parliament (195/80, EU:C:1981:284, paragraph 22); and of 16 November 2000, Stora Kopparbergs Bergslags v Commission (C‑286/98 P, EU:C:2000:630), maintaining that, in accordance with that case-law, the statement of reasons for a Commission decision must appear in the body of the decision itself, as explanations given by that institution ex post facto may not, save in exceptional circumstances, be taken into account.
124In its view, the reasons mentioned by the General Court in paragraphs 157 to 159 of the judgment under appeal cannot be considered ‘exceptional circumstances’ within the meaning of that case-law.
125Furthermore, the appellant disputes the fact that the letters sent by the Commission to the Kingdom of Sweden can be regarded as relevant for the purposes of the decision at issue and claims that, even if they were, they would not constitute a sufficient statement of the scientific reasons capable of justifying the conclusion that there was no substitutability between the two products concerned.
126The Commission contends that the fifth ground of appeal should be rejected.
Findings of the Court
127In paragraph 154 of the judgment under appeal, the General Court correctly recalled, first of all, that the statement of reasons required by Article 296 TFEU must show clearly and unequivocally the reasoning of the author of the contested measure, so as to enable the persons concerned to ascertain the reasons for it in order to defend their rights and to enable the EU Courts to exercise their power of review.
128In paragraph 155 of that judgment, the General Court next added, correctly, that it is not necessary for the reasoning to go into all the relevant facts and points of law, inasmuch as the question whether the statement of reasons meets the requirements of Article 296 TFEU must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question.
129Last, in paragraph 156 of the judgment under appeal, the General Court emphasised, without committing an error of law, the fact that compliance with the obligation under Article 296 TFEU to state reasons, in respect of a decision concerning national implementation measures for the transitional free allocation of greenhouse gas emission allowances, in accordance with Article 11(3) of Directive 2003/87, is of particularly fundamental importance because, in that context, exercise of the Commission’s discretionary power under the latter provision entails complex economic and ecological assessments and review by the EU Courts of the legality and merits of those assessments is restricted.
130On the basis of those principles, the General Court held, in paragraphs 157 to 159 of the judgment under appeal, that, in the present case, the appellant could not validly claim not to have been in a position to understand the reasons why the Commission had considered that the benchmark for sintered ore was tailored to the production of sintered ore and could not include, as the Kingdom of Sweden wished, the production of iron ore pellets.
131To that end, the General Court considered, in the first place, in paragraph 158 of the judgment under appeal, that it was apparent from the file before it that the appellant had been in a position to challenge the merits of the decision at issue so far as concerned it, whether it be the wording of the benchmark for iron ore, the impact that the various objectives of the applicable legislation might have on its interpretation or the fact that the Commission had implicitly but necessarily considered, in that case, that it was not appropriate to adopt for the installations at issue the same approach as that which it had previously adopted in relation to the Tata Steel installation (formerly Corus), situated in IJmuiden (Netherlands), part of an integrated steel plant.
132In the second place, the General Court emphasised, in paragraph 159 of the judgment under appeal, that it was apparent from the application at first instance, and in particular from the content of the various pleas submitted in support of it, that the appellant also had good knowledge of the various exchanges that had taken place, during the procedure which led to the adoption of the decision at issue, between the Kingdom of Sweden and the Commission, which formed part of the context.
133In that regard, as the General Court correctly held in paragraph 155 of the judgment under appeal, in accordance with settled case-law, it is not necessary for the statement of reasons for an act of an EU institution to go into all the relevant facts and points of law, since the question whether the statement of reasons meets the requirements of Article 296 TFEU must be assessed with regard not only to the wording of that act but also to its context and to all the legal rules governing the matter in question (see, to that effect, judgments of 12 September 2017, Anagnostakis v Commission, C‑589/15 P, EU:C:2017:663, paragraph 29; of 20 January 2022, Romania v Commission, C‑899/19 P, EU:C:2022:41, paragraph 68; and of 23 January 2025, Neos v Ryanair and Commission, C‑490/23 P, EU:C:2025:32, paragraph 34).
134In the case at hand, recital 13 of the decision at issue states that the Kingdom of Sweden had actually proposed the use of a sub-installation covered by the benchmark for sintered ore for the production of iron ore pellets, whereas, in phase 3, heat and fuel benchmarks had been used. However, in that same recital, the Commission recalled, first, that the benchmark for sintered ore was defined in Annex I to Delegated Regulation 2019/331, second, that the definition of products as well as the definition of processes and emissions covered by that product benchmark were tailored to the production of sintered ore and did not include iron ore pellet production and, third, that Article 10a(2) of Directive 2003/87 required an update of the benchmark values for phase 4, and did not provide for any adjustment of the interpretation of the benchmark definitions.
135In that regard, it should be pointed out, on the one hand, that, by its appeal, the appellant challenges only the decision that the production of iron ore pellets does not fall within the benchmark for sintered ore.
136On the other hand, the legislative context in which the decision at issue was adopted, referred to in recital 13 of that decision and the subject of paragraphs 73 to 77 of the present judgment, combined with the explanations set out in that recital, is sufficient to understand the reasons why the Commission decided that the production of iron ore pellets did not fall within the benchmark for sintered ore.
137Furthermore, not only was the Kingdom of Sweden, which submitted proposals to the Commission taking into account the interests of the operators of the installations at issue, closely involved in the procedure which culminated in the adoption of the decision at issue, but it must be stated that the appellant was, in the light of its written submissions before the General Court, in a position effectively to challenge the merits of that decision (see, by analogy, judgment of 10 September 2024, Commission v Ireland and Others, C‑465/20 P, EU:C:2024:724, paragraph 393).
138In the light of those considerations, it must be held that the statement of reasons for the decision at issue satisfies the requirements of Article 296 TFEU and that the General Court did not commit an error of law in rejecting the fifth plea of the application at first instance, alleging breach by the Commission of its obligation to state reasons.
139The fifth ground of appeal must therefore be rejected as unfounded.
140Since all of the grounds relied on in support of the appeal have been rejected, the appeal must be dismissed in its entirety.
Costs
141Under Article 138(1) of the Rules of Procedure of the Court of Justice, which applies to appeal proceedings by virtue of Article 184(1) thereof, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.
142Since the Commission has applied for costs to be awarded against the appellant and the latter has been unsuccessful, the appellant must be ordered to bear its own costs and to pay those incurred by the Commission.
143In accordance with Article 184(4) of the Rules of Procedure, the Court may decide that, where the appeal has not been brought by an intervener at first instance, that intervener may not be ordered to pay costs in the appeal proceedings unless that intervener participated in the written or oral part of the proceedings. In the present case, the Kingdom of Sweden, which participated in the written part of the procedure before the Court, must be ordered to bear its own costs.
Operative part
On those grounds, the Court (Fifth Chamber) hereby:
1.Dismisses the appeal;
2.Orders Luossavaara-Kiirunavaara AB to bear its own costs and to pay those incurred by the European Commission;
3.Orders the Kingdom of Sweden to bear its own costs.
Delivered in open court in Luxembourg on 22 May 2025.
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