State Aid and Selectivity in the Context of Emissions Trading: Comment on the NOx Case

Wolf Sauter*, Hans Vedder

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

1 Citation (Scopus)


Article 107(1) TFEU only applies to State measures that favour certain undertakings or productions. This concept of selectivity features prominently in a number of recent cases and plays a controversial role in Commission and Court practice in the application of art. 107(1) to seemingly general schemes. In this recent appeal from a judgment of the General Court, the highest EU Court examined the Netherlands scheme for NOx emissions trading from a State aid perspective and, notably, the selectivity criterion. The ECJ found for the Commission on the ground that the measure was selective because only the largest polluters had been granted (tradable, and hence valuable) emission rights free of charge. However the largest polluters were also the only ones caught by the scheme and it would have been impossible to determine the value of the rights up-front in a dynamic cap scheme. The approach chosen by the Court casts doubt on the ability of Member States to design national schemes that avoid the State aid rules even if they are in line with EU environmental policy. This comment also addresses the wider implications of the Court's interpretation of selectivity in the light of recent case law where the Commission and EU Courts are restricting national tax sovereignty.

Original languageEnglish
Pages (from-to)327-339
Number of pages13
JournalEuropean Law Review
Issue number3
Publication statusPublished - Jun-2012


  • Admissibility
  • Emissions trading
  • EU law
  • Netherlands
  • State aid

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