European Commission v. Kingdom of the Netherlands. Country/Territory European Union Type of court International court Date Sep 8, 2011 Source UNEP, InforMEA Court name European Court of Justice Seat of court Luxembourg Judge Malenovský, J.Lenaerts, K.Silva de Lapuerta, R.Juhász, E.Arestis (Rapporteur), G. Reference number C-297-08P Language English Subject Air & atmosphere, Environment gen. Keyword Court/tribunal Legal proceedings/administrative proceedings Emissions trading Emissions Abstract This case was brought about as a result of a decision adopted by the European Commission, which stated that the Netherlands emissions trading system for nitrogen oxides (NOx) constituted state aid. The Netherlandss scheme set an emissions limit for large industrial facilities. Companies which stayed below this limit were allowed to sell their surplus, and companies whose emissions exceeded the ceiling could escape fines by buying these emissions allowances. This could be very profitable for the companies who stayed below the cap. The Court of First Instance of the European Communities (General Court) found that this did not constitute state aid because it applied to all NOx-producing facilities and it was also justified on the basis of environmental protection. The European Court of Justice Third Chamber set aside the judgment of the Court of First Instance of the European Communities, stating that the Court must look at the impact of the scheme and not its objective of environmental protection. It held that the Dutch NOx emissions trading scheme did constitute state aid because it selectively provided an advantage to a small group of large companies with high emissions. These companies can trade their emission rights, allowing them to avoid the sanction of a fine. This therefore constituted an involvement of state resources. Full text European Commission v. Kingdom of the Netherlands. 08-09-2011 english.pdf