Electricity generators in the European Union emissions trading system: definitional aspects in the light of a judicial decision

The "electricity generator" definition (introduced through Directive 2009/29/EC, based on electricity sale and effective since 1.1.2005) is significant within the European Union greenhouse gases Emissions Trading System (ETS). Established through Directive 2003/87/EC, ETS currently (2021-2030) runs Phase IV of free allowances distribution (for emitted carbon-dioxide equivalent tonnes), following the 2005-2007, 2008-2012 and 2013-2020 Phases. Starting with Phase III (2013), electricity generators do not receive free allowances (except for specific reasons), with auction intended for the power sector. For Phase III preparation the legally non-binding "Guidance paper to identify electricity generators" (revised v2, 18.03.2010) partly limiting the definition's scope (through comparison of on-site electricity consumption with production), was published by the European Commission; it was withdrawn in preparation for Phase IV, with a European Court of Justice decision (5th Chamber, 20.6.2019, Case C-682/17) involving the definition (among other questions) issued in between. Since the definition reaches beyond the power sector, aspects of it (scope, retroactivity, congruity with the equal treatment principle) are considered, relevant to the decision's content, underlining merits of the Guidance paper provision (differentiation between occasional and core electricity sale, less prominent differences in allowances cost recovery possibilities) and the fairness of a flexible electricity sale starting point.