Several NGOs have filed legal arguments in the General Court of the European Union arguing that Europe’s emissions allowances between now and 2030 are unlawful. The lawsuit argues that the European Commission failed in its duties to adequately assess and set suitable emissions reduction goals for 2030 and that the Union did not properly assess the impacts of climate change on fundamental rights. Climate Action Network Europe states in its press release that:
“The NGOs are calling on the Commission to revise the greenhouse gas emissions it has authorised Member States to emit between now and 2030, as set out in their annual emissions allocations under the Effort Sharing Regulation. The current levels authorised by the Commission are contrary to environmental law because the level of climate ambition is insufficient to protect fundamental human rights.”
The NGOs argue that the emissions reductions planned in the EU’s Fit for 55 package are inadequate to limit global temperatures to the 1.5°C required by the Paris Agreement. If the NGOs succeed in their legal challenge and more stringent targets are set, then the impacts on European companies would be palpable. Any change to the Union’s authorized GHG emissions will likely drive up the cost of carbon allowances in Europe’s Emissions Trading System (ETS). This will carry significant impacts for sectors covered by the ETS as well as importers subject to the Carbon Border Adjustment Mechanism (CBAM). The case is still in its early stages and is already facing headwinds in European courts. However, with the European Court of Human Rights ruling in April that protection from climate change is a human right, there is momentum which could support a verdict in favor of the NGOs.
Our members can learn more about climate litigation here.
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