Federal Environment Minister Sigmar Gabriel has welcomed the decision of the Federal Constitutional Court on emissions trading. "The decisions of the supreme court fully confirm the position of the Federal Government and improve legal certainty for the implementation of emissions trading in Germany," said Gabriel. "With emissions trading we are creating incentives for the urgently needed modernisation of the power plant park in Germany. This not only benefits the climate but also offers opportunities for industry and employment. These opportunities should now be consistently used."
Background:
Today, the Federal Constitutional Court published three decisions on emissions trading. These confirmed the constitutionality of the legal regulations on the introduction of emissions trading in Germany.The complaint of unconstitutionality lodged by several aluminium producers against the Allocation Act 2007 (1 BvR 1874/05) was rejected by the Federal Constitutional Court because the time limit had lapsed. The complaint of a company in the cement industry (1BvR 2036/05) was also unsuccessful. This company had filed a suit against its obligations under the Greenhouse Gas Emissions Trading Act. The decision of the Federal Constitutional Court confirmed the 2005 ruling of the Federal Administrative Court, which stated that the introduction of emissions trading does not injure the company's fundamental legal position. The Court ruled that the distribution of administrative competences between the Federation and the Länder is also in line with the constitution. "For installations requiring a licence and subject to air quality legislation the Länder authorities decide only on the obligations in the context of reporting, hence also on the provisions for monitoring and calculating the emissions." With this clear assessment the Federal Constitutional Court opposed the opinion held in particular by the federal Länder Bavaria and Hesse that the Länder are not responsible for the enforcement tasks.
In its third decision, the Federal Constitutional Court rejected Saxony-Anhalt's application for standards control. This application was aimed at establishing the unconstitutionality of a regulation in the Allocation Act 2007 relating to privileges for installations which had taken early action on emissions reduction. Saxony-Anhalt felt this privilege did not go far enough. The decision of the Federal Constitutional Court established that the regulation objected to does not breach the requirement for equal treatment stipulated in the act. While installations which had modernised before the introduction of emissions trading were not in exactly the same position as those which only modernised later, the legislator was permitted to "prescribe particular incentives for future modernisations, if the reductions achieved are substantial. This is precisely the spirit of emissions trading". The Court stated that privileging early action, on the other hand, does not serve to motivate for the future, but is to be seen "simply as an appropriate recognition of the past."