The Court ruled Arcelor's action as inadmissible on the grounds that only companies individually or directly concerned by EU acts can bring a legal challenge to them. It argued that Arcelor is "neither individually nor directly concerned by the directive," which applies generally to all operators that it covers, including those in pig iron or steel production.
The EU directive establishing an emissions trading scheme has since 2005 set an absolute cap on carbon emissions from specified power and industrial sectors (see EurActiv LinksDossier on the 'EU ETS'). It obliges the operators to pay for emission permits for their polluting activities.
Arcelor, the world's largest steel producer since its merger with Mittal in 2006, applied for the annulment of a number of articles under the EU ETS in 2004, arguing that applying these to pig iron or steel production violates several principles under Community law, including the property rights, the freedom to pursue economic activity and the principle of equal treatment.
Arcelor argued that the pig iron and steel producers in the EU face a "unique lock-in situation" as they are the only ETS sector that faces competition from sectors that are not covered by the directive: non-ferrous metals and plastics.
The General Court, previously called the Court of First Instance, also dismissed the steel giant's application for the European Parliament and the Council of the European Union to pay for the damages that it has suffered as a result of the contested rules.
The court decision stated that Arcelor had not proved that the law had "committed a sufficiently serious breach" of the EU's legal principles to justify a liability by the Community.
This is the second case that Arcelor has lost against the ETS provisions.
In 2008, the Court of Justice decided that the law did not violate the principle of equal treatment by excluding the chemical and non-ferrous sectors from the first trading phase of the directive. The sectors were added to the scope of the new revised directive for the post-2012 trading period, adopted in 2009.
Reacting to the decision, ArcelorMittal spokesperson Jean Lasar said while some of the initial shortcomings of the EU ETS which the company criticised in its lawsuit have since been corrected, it remains concerned that the European trading system "might put an excessive strain on the EU steel industry's competitiveness and threaten steelmaking jobs".
"This issue will need to be addressed especially with regards to the third trading period of the ETS which starts in 2012," he added.