Theory and Practice of Emissions Trading in the European Union: Some Reflections on Allowance Allocation in Light of the DK Recycling Case

(Series Information) European Papers - A Journal on Law and Integration, 2016 1(3), 1153-1170 | European Forum Insight of 22 December 2016 | (Table of Contents) I. Introduction - II. The Judgment in Context - II.1. Theory and Practice of Market-Based Environmental Regulation - II.2 Emissions Trading in the EU - III. The DK Recycling Case - III.1 Background - III.2. DK Recycling before the General Court - III.3. DK Recycling before the Court of Justice - IV. A Parallel Between DK Recycling and the Regulatory Shift to Auctioning: The Normative Landscape of Allowance Allocation - V. DK Recycling, Allowance Allocation and Theoretical Constructions of the EU ETS. | (Abstract) In its judgment of 22 June 2016, DK Recycling und Roheisen GmbH v. Commission, the Court of Justice ruled on an appeal brought by a German undertaking operating installations subject to the European Union Emissions Trading System (EU ETS), i.e. a "carbon market" where operators trade greenhouse gas emission allowances. At issue in the case were the rules on free allocation of emission allowances. After putting the case in context by providing an overview of the normative framework of the mechanism, the present analysis examines how the case contributes to the understanding of the theoretical implications of the EU ETS.