1.

Granarolo SpA is a company operating in the food sector, specifically that of fresh milk. It also produces and distributes dairy products. It holds, in relation to its Pasturago di Vernate (Italy) site, where it has a production facility and an electricity and heat cogeneration installation, ( 2 ) a single greenhouse gas emissions permit. However, in fact, Granarolo is no longer the owner of the cogeneration installation, which it transferred to E.On Business Solutions (formerly E.On Connecting Energies Italia Srl; ‘EBS’), a company which specialises in energy production. Granarolo is therefore seeking to have its greenhouse gas emissions permit updated so that the emissions relating to the cogeneration installation are no longer attributed to it. To date, this request has been refused by the competent authority. ( 3 )

2.

Against that background, Granarolo brought an action before the Tribunale amministrativo regionale per il Lazio (Regional Administrative Court, Lazio, Italy). ( 4 ) That court has submitted to the Court of Justice a request for a preliminary ruling on the interpretation of Article 3(e) of Directive 2003/87/EC, ( 5 ) which defines ‘installation’.

3.

The question being put to the Court is essentially whether, in circumstances where a single greenhouse gas emissions permit covers more than one technical unit on the same industrial site, and the units have been treated, within the permit, as one and the same ‘installation’, the transfer of one of those units by the undertaking holding the permit to a natural or legal person results in that unit no longer forming part of such an installation.

4.

I will suggest below that the Court should answer this question in the affirmative, adding that, in my opinion, there are two exceptions. The first of these is where, despite the change of ownership, the activity carried out in the transferred unit has a ‘technical connection’ with the activities of the transferor and is ‘directly associated’ ( 6 ) with the transferor’s installation, and the second is where the transferor remains the ‘operator’ ( 7 ) able to control the unit’s emissions. It does not seem to me that either of those exceptions applies in the main proceedings.

5.

Article 3 of Directive 2003/87, headed ‘Definitions’, provides:

‘For the purposes of this directive:

…

…’

6.

Article 4 of that directive, headed ‘Greenhouse gas emissions permits’, provides:

‘Member States shall ensure that, from 1 January 2005, no installation carries out any activity listed in Annex I resulting in emissions specified in relation to that activity unless its operator holds a permit issued by a competent authority in accordance with Articles 5 and 6, or the installation is excluded from the Community scheme pursuant to Article 27 …’

7.

Article 6 of the directive, headed ‘Conditions for and contents of the greenhouse gas emissions permit’, states as follows:

‘1.   The competent authority shall issue a greenhouse gas emissions permit granting authorisation to emit greenhouse gases from all or part of an installation if it is satisfied that the operator is capable of monitoring and reporting emissions.

A greenhouse gas emissions permit may cover one or more installations on the same site operated by the same operator.

…’

8.

Article 7 of the directive, headed ‘Changes relating to installations’, provides:

‘The operator shall inform the competent authority of any planned changes to the nature or functioning of the installation, or any extension or significant reduction of its capacity, which may require updating the greenhouse gas emissions permit. Where appropriate, the competent authority shall update the permit. Where there is a change in the identity of the installation’s operator, the competent authority shall update the permit to include the name and address of the new operator.’

9.

Annex I to Directive 2003/87, entitled ‘Categories of activities to which this Directive applies’, contains a table listing those activities. Among them is ‘combustion of fuels in installations with a total rated thermal input exceeding 20 MW (except in installations for the incineration of hazardous or municipal waste)’. Paragraph 3 of Annex I provides that ‘when the total rated thermal input of an installation is calculated in order to decide upon its inclusion in the [ETS], the rated thermal inputs of all technical units which are part of it … are added together’.

10.

Article 3(1)(t) of Legislative Decree No 30/2013 ( 8 ) defines ‘operator’ as ‘the person who possesses or manages an installation, or to whom decisive economic power over the technical functioning of the installation has been delegated’. ( 9 )

11.

Article 3(1)(v) of that legislative decree defines ‘installation’ as ‘a stationary technical unit where one or more activities listed in Annex I are carried out and any other directly associated activities which have a technical connection with the activities carried out on the same site and which could have an effect on emissions and pollution’.

12.

Article 13(1) of that legislative decree provides that no installation may undertake any activity which is listed in Annex I to the decree and results in emissions of greenhouse gases unless a permit has been obtained from the ETS committee.

13.

As set out in Article 16 of Legislative Decree No 30/2013, the operator is to inform the ETS committee of any change in the identity of the operator or the nature and functioning of the installation, or any extension or significant reduction of its capacity.

14.

Granarolo is a company operating in the food sector, specifically that of fresh milk. It also produces and distributes dairy products. It has, in Pasturago di Vernate, a production facility equipped with a thermal power plant consisting of three boilers which produce the heat required for its processing activities.

15.

In respect of its production facility, the company held a greenhouse gas emissions permit relating to the ‘combustion of fuels in installations with a total rated thermal input exceeding 20 MW’. This is one of the activities listed in Annex I of Legislative Decree No 30/2013, which transposes Directive 2003/87 into Italian law. The company is subject, in respect of that facility, to the ‘small emitters’ scheme. ( 10 )

16.

In 2013, Granarolo constructed a cogeneration installation on the site of its production facility to produce electricity and heat for the purposes of food production. It had its greenhouse gas emissions permit updated by the ETS committee, so as to incorporate the emissions of the cogeneration installation.

17.

In 2017, Granarolo transferred its cogeneration installation to EBS. At the same time, it entered into an energy supply contract with that company, under which it could continue to use the heat and electricity produced by the installation to meet the energy needs of its production facility.

18.

Following that transfer, Granarolo applied to the ETS committee for its greenhouse gas emissions permit to be updated so as to remove the cogeneration installation emissions from the calculation of its greenhouse gas emissions, on the basis that that installation was no longer operated by it or under its control.

19.

After that application was rejected by the ETS committee, Granarolo brought the matter before the referring court seeking an annulment of that decision rejecting the application.

20.

The referring court states that, in support of its action, Granarolo argues that the ETS committee misinterpreted the requirements of Directive 2003/87 in the rejection decision. In particular, Granarolo submits that it is apparent from Article 3(f) and Article 6 of that directive that the greenhouse gas emissions permit is to be issued to the operator of the installation. It argues that, in the present case, the energy supply contract between Granarolo and EBS cannot be interpreted as meaning that Granarolo retains a power of management and control of the emissions of the cogeneration installation, such that it continues to operate that installation.

21.

For its part, the ETS committee submits before the referring court that the transfer of the branch of activity to EBS did not affect the configuration of Granarolo’s installation, which is made up of the production facility and the cogeneration installation. It argues that the cogeneration installation should be regarded as having a ‘technical connection’ with the production facility, and as being capable of affecting the emissions to be attributed to Granarolo. It submits that once the greenhouse gas emissions permit has been issued, the fact that the permit holder is not the operator of the installation is irrelevant. In that regard, the ETS committee maintains that, in any event, it is apparent from the terms of the energy supply contract that Granarolo retains decisive power over the operation of the cogeneration installation.

22.

Against that background, the referring court wishes to establish the correct interpretation of ‘installation’ and ‘activities which have a technical connection’, within the meaning of Article 3(e) of Directive 2003/87. It also wishes to establish whether, as the ETS committee suggests, an interpretation according to which the initial installation should be regarded as having been divided into two installations would result in the rules of the emission allowance trading scheme being circumvented. In the event of such an interpretation, the cogeneration installation, which has a thermal input of less than 20 MW, would not fall within the activities covered by Annex I to Directive 2003/87, and would therefore be excluded from the substantive scope of that directive.

23.

On the basis of those considerations, the Tribunale amministrativo regionale per il Lazio (Regional Administrative Tribunal, Lazio), by decision of 13 March 2019, received at the Court on 14 August 2019, decided to stay the proceedings and refer the following questions to the Court of Justice for a preliminary ruling:

24.

Granarolo, EBS, the Italian and Czech Governments and the European Commission submitted written observations to the Court.

25.

Those parties and interested parties, with the exception of the Czech Government, were represented at the hearing of 17 September 2020.

26.

As I indicated in the introduction to this Opinion, the referring court is essentially seeking to clarify which undertaking (transferee or transferor) is to have the greenhouse gas emissions of a cogeneration installation attributed to it, in circumstances where ownership of the installation has been transferred by the undertaking which holds a single permit for the site where it is located. Where the installation and the transferor’s production facility have initially been treated, in that permit, as one and the same ‘installation’, within the meaning of Article 3(e) of Directive 2003/87, must that remain the case after the transfer?

27.

That, essentially, is the issue to which the referring court’s first two questions relate, and I will consider those questions together in this Opinion.

28.

As for the third question referred, this seeks to establish whether, supposing that a cogeneration installation such as that at issue in the main proceedings is, once transferred, no longer to be regarded as forming part of the transferor’s ‘installation’, the fact that the greenhouse gas emissions of that installation, considered in isolation, do not reach the threshold of 20 MW, as they would have to in order to be covered by Directive 2003/87, might lead to infringement of the ‘aggregation rule’ contained in paragraph 3 of Annex I to that directive. ( 11 )

29.

In concrete terms, if, after completion of the transaction between Granarolo and EBS, the cogeneration installation and the production facility were regarded as forming one and the same ‘installation’, their rated thermal inputs would be added together under the ‘aggregation rule’ and their emissions would be covered by the ETS. On the other hand, if the cogeneration installation was no longer part of the same ‘installation’ as the production facility, its total rated thermal input would not reach the 20 MW minimum threshold. The greenhouse gas emissions of that installation would therefore fall outside the substantive scope of Directive 2003/87, and not be included in the ETS.

30.

I note that the purpose of Directive 2003/87 is to establish an emission allowance trading scheme which seeks to reduce greenhouse gas emissions into the atmosphere and has the ultimate aim of protecting the environment. There is an economic logic underlying the scheme that encourages a participant in the scheme to emit smaller quantities of greenhouse gases than it was originally allowed to emit, in order to sell the surplus to another participant which has emitted more than its allowance. ( 12 )

31.

This principle of auctioning allowances, which the legislature described as ‘the simplest, and generally considered to be the most economically efficient, system’, ( 13 ) in relation to the objective of ‘[reducing] greenhouse gas emissions in a cost-effective and economically efficient manner’, ( 14 ) thus depends on the ability of participants to control their greenhouse gas emissions.

32.

In the present case, having regard to the contractual terms referred to in the national court’s questions, it seems to me, from the outset, that it is only EBS that is in a position to control the emissions of the cogeneration installation at issue in the main proceedings.

33.

First, as I stated in the introduction to this Opinion, Granarolo is no longer the owner of the installation. The referring court states that Granarolo and EBS agreed contractual clauses providing for the installation and the documents required to operate it to be transferred to EBS, and for EBS to be granted a surface right and easements intended to enable it to operate and maintain that installation.

34.

Secondly, I deduce from the wording of the referring court’s questions that, while EBS has agreed to supply Granarolo with the minimum amount of thermal and electrical energy required for the production facility, for a period of 12 years, this contractual obligation does not confer any power on Granarolo to control the emissions of the cogeneration installation. In the event that EBS did not supply the necessary energy, the only consequence would be, as the referring court states, that it would be obliged to reimburse Granarolo an amount representing the difference between the market price of the energy supply and the price agreed in the energy supply contract entered into by EBS and Granarolo.

35.

Thirdly, while the referring court states that Granarolo has an option to repurchase the cogeneration installation, and could exercise that option at any time, in my view the mere fact that the option exists is not a basis for concluding that the company has the power to increase or reduce the total amount of energy produced by the installation, since no concrete steps have ever been taken to retake ownership of the installation.

36.

Fourthly, the same applies, in my view, to the contractual obligation, also referred to by the national court, under which EBS must seek authorisation from Granarolo before carrying out works to the cogeneration installation. That obligation cannot alter the conclusion that it is only EBS that controls the quantity of emissions produced by that installation.

37.

On the basis of those facts and matters, the parties and interested parties in the present case advance, essentially, two different views.

38.

On the one hand, Granarolo, EBS and the Commission submit, on the basis that Granarolo can no longer control the emissions of the cogeneration installation which has been transferred to EBS, that it is essential, with regard to Directive 2003/87, that the emissions of that installation are no longer incorporated into Granarolo’s greenhouse gas emissions permit. The provisions of that directive indicate, they submit, that the greenhouse gas emissions permit is issued to the ‘operator’ of the installation, as defined in Article 3(f) of the directive, and only EBS can be regarded as fulfilling that function.

39.

On the other hand, the Italian and Czech Governments submit that the concept of ‘installation’, within the meaning of Article 3(e) of Directive 2003/87, is independent of that of ‘operator’. Thus, on the facts of the main proceedings, the cogeneration installation and Granarolo’s production facility can, they argue, still be regarded as forming one and the same ‘installation’, and as being covered by the permit relating to the production facility, regardless of the fact that the operator of the cogeneration installation is not the permit holder. ( 15 )

40.

As regards the configuration of the cogeneration installation, Granarolo stated at the hearing that in the permit it holds, which reflects its position prior to the transfer to EBS, the cogeneration installation and the production facility are treated as two technical units subject to the ‘aggregation rule’ in paragraph 3 of Annex I to Directive 2003/87, and as forming part of one and the same installation.

41.

In its questions, the referring court emphasises that, following the transfer, the cogeneration installation continues to be physically connected to Granarolo’s production facility by means of a distribution network. Nonetheless, it states that Granarolo could continue its activity even in the event that there was an interruption in the supply of energy by EBS or a malfunction affecting the cogeneration installation.

42.

For the reasons I will give below (section B), I do not regard those matters as indicating that, in a case such as that before the referring court, the activities of a cogeneration installation and a production facility must be considered to have a ‘technical connection’ within the meaning of Article 3(e) of Directive 2003/87, and thus to be one and the same installation.

43.

Once those matters have been clarified, it will be necessary to identify the undertaking to which the greenhouse gas emissions produced by a cogeneration installation such as that at issue in the main proceedings are to be attributed. In other words, I will need to establish whether the emissions of such an installation can continue to be covered by a greenhouse gas emissions permit such as that held by Granarolo.

44.

In that regard I will state, first of all, that a greenhouse gas emissions permit can only cover the installations or parts of installations that the undertaking holding the permit ‘operates’ within the meaning of Article 3(f) of Directive 2003/87 (section C). I will go on to explain that, on the facts of the main proceedings, Granarolo is no longer ‘operating’ the cogeneration installation and thus cannot have the emissions attributed to it (section D).

45.

I would observe, straight away, that the contractual terms agreed between transferor and transferee do not seem to me to be relevant to the determination of whether there is a ‘technical connection’ between a transferred activity and the activities of the transferor. Nevertheless, it will be apparent from section D of this Opinion that, in my view, such terms are useful from the point of view of identifying the operator of the technical unit in which such an activity is carried out, or in other words the undertaking to which the resulting emissions are to be attributed.

46.

Finally, I will address the referring court’s third question, which concerns a potential infringement of the ‘aggregation rule’ (section F).

47.

I note that ‘installation’ is defined in Article 3(e) of Directive 2003/87 as ‘a stationary technical unit where one or more activities listed in Annex I are carried out and any other directly associated activities which have a technical connection with the activities carried out on that site and which could have an effect on emissions and pollution’. ( 16 ) Moreover, the ‘aggregation rule’ contained in paragraph 3 of Annex I to that directive presupposes that an ‘installation’ may also be made up of a group of technical units situated on the same site. ( 17 )

48.

On the basis of those provisions, I think it is necessary to distinguish between three different categories of cases in which a branch of activity is transferred by the undertaking holding a single greenhouse gas emissions permit.

49.

In the first category of cases, the operator transfers ownership of all the installations or parts of installations covered by its greenhouse gas emissions permit to another natural or legal person, who becomes the new ‘operator’. This situation is addressed in the third sentence of Article 7 of Directive 2003/87, under which the competent authority is to update the permit to include the name and address of the new operator.

50.

It is apparent from that provision, therefore, that for the purposes of the ETS, an operator is entirely free to transfer all the installations or parts of installations covered by its greenhouse gas emissions permit to another undertaking. Once the transfer has taken place, the emissions are attributed to that other undertaking.

51.

The question is: what is the position where the transfer relates to only one of the technical units which make up an installation already covered by a greenhouse gas emissions permit? The following two categories of cases cover such partial transfers.

52.

Since, in the third category of cases, there is a technical connection between the activities concerned, the definition of ‘installation’ in Article 3(e) of Directive 2003/87 requires them to be regarded as being carried out in one and the same installation.

53.

In other words, the issue of whether there is a ‘technical connection’ between the activities of transferor and transferee affects the number of installations that exist following a transfer. Depending on whether the circumstances are those of the second category of cases or of the third, there may, once the transfer has taken place, be a single installation, or there may be two.

54.

Directive 2003/87 does not contain a definition of ‘a technical connection’ between activities.

55.

However, in its judgment in Elektriciteits Produktiemaatschappij Zuid-Nederland EPZ, the Court stated, essentially, that there is a ‘technical connection’ between two activities where they are integrated into the same technical process. ( 18 )

56.

In that case the Court held, as regards a coal storage site and a thermoelectric power plant which were connected by a conveyor belt supplying coal to the plant, that the stored coal was essential to the functioning of the power plant, which was a sufficient basis for concluding that the activity of storage was directly associated with the activity of the plant. ( 19 )

57.

I would acknowledge that, in that judgment, the Court did not expressly rule out the possibility that one activity may also be regarded as having a ‘technical connection’ with another activity where it is not ‘essential’ to that other activity. However, I understand the criterion used by the Court to mean that the situations in which there is considered to be a ‘technical connection’ between activities include, in any event, those where the integrity of the installation might be in doubt if it no longer had the benefit of the transferred activity. ( 20 )

58.

The first category of cases identified in subsection 1 is clearly not the one we are concerned with in the circumstances of the main proceedings. Granarolo, which holds a permit covering both the cogeneration installation and the production facility, transferred ownership of only the cogeneration installation to EBS, retaining ownership of the production facility.

59.

In the present case, therefore, it is necessary to consider, in the light of the file before the Court and subject to the matters which the referring court will need to verify, whether there is a ‘technical connection’ between the activity transferred from Granarolo to EBS and the other activities carried out in the installation to which Granarolo’s greenhouse gas emissions permit relates.

60.

On that point, the Italian Government argues that, since the energy produced by the cogeneration installation is specifically intended for Granarolo’s production facility and the two installations are physically connected, there is a ‘technical connection’ between their activities.

61.

Granarolo does not accept that argument and maintains, as does EBS and the Commission, that there is no ‘technical connection’ between the activity which takes place in the cogeneration installation and the activities it carries out in its production facility, and that the former cannot be regarded as directly associated with the latter.

62.

I share that view.

63.

As I observed in point 55 of this Opinion, the fact that activities are linked in some way is not a sufficient basis for concluding that there is a ‘technical connection’ between them; it must be established that the transferred activity is an integral part of the overall technical process to which the transferor’s other activities relate.

64.

In the present case, it is apparent from the file before the Court that the cogeneration installation is connected to Granarolo’s production facility only by means of a distribution network (in other words, cables) which enables energy to be supplied.

65.

While that distribution network provides Granarolo with privileged access to the energy produced by EBS, it is not sufficient to establish a technical connection between the activities of the two installations, since – as the referring court has pointed out – the production facility would be able to continue its own activity even if the cogeneration installation malfunctioned or its activity was interrupted. It seems to me that this point is decisive.

66.

In that regard, it is apparent from the referring court’s description of the factual circumstances, that the production facility is connected to the national grid, and that electricity would therefore be available to it even if EBS did not provide an adequate supply. ( 21 )

67.

Furthermore, the facility itself has a thermal power plant consisting of three boilers. According to Granarolo, even if the supply of heat from the cogeneration installation were to cease, the thermal power plant would be able to produce all the heat required for its production processes.

68.

Those facts and matters indicate, in my view, that the activity of production of heat and electricity which is performed by a cogeneration installation such as that at issue in the main proceedings is not an integral part of the overall technical process of a production facility such as that operated by Granarolo. Furthermore, Granarolo’s production facility was perfectly capable of functioning prior to the construction of the cogeneration installation. Thus, the situation in the present case is quite the opposite of that of the coal-fired power plant in the case giving rise to the judgment in Elektriciteits Produktiemaatschappij Zuid-Nederland EPZ, ( 22 ) which could not carry out its activity without the coal delivered from the storage site via the conveyor belt.

69.

In those circumstances, I am firmly of the view that, in a case such as that in the main proceedings, there is no ‘technical connection’ between the transferred activity and the activities carried out in the production facility retained by the transferor. In particular, it seems to me – as EBS and the Commission rightly observe – that the relationship between those activities, far from constituting a ‘technical connection’, is purely contractual.

70.

To take the opposite view would be to maintain that, simply because they are connected by an electricity network, all energy suppliers carry out activities which have a ‘technical connection’ to the activities of their customers, which would mean that the greenhouse gas emissions that can be attributed to them would overlap, making the ETS unworkable. ( 23 )

71.

It follows from those considerations that the activity carried out in a cogeneration installation such as that transferred in the case in the main proceedings from Granarolo to EBS, cannot be regarded as having a ‘technical connection’ with the activities carried out in a production facility which, like Granarolo’s, could continue to function without that installation.

72.

A case such as that before the referring court thus belongs to the second category of cases described in point 51 of this Opinion.

73.

It seems to me, moreover, that in cases falling within that category, the simple fact that the technical units were treated, prior to the transfer, as forming one and the same ‘installation’ cannot affect the conclusion that, following the transfer, there are two installations. If there is no technical connection between the activities of the transferor and the transferee, the technical unit which enables the transferred activity to be carried out must, following the transfer, be treated as distinct from those in which the transferor’s activities are carried out.

74.

In that regard, I note that, under Article 3(e) of Directive 2003/87, where there is no issue as to whether activities have a ‘technical connection’ with the activities carried out in an installation, it is simply a matter (as the Czech Government observes) of identifying a stationary technical unit where one or more activities listed in Annex I to that directive are carried out.

75.

Now, I share the view expressed by Advocate General Kokott in her Opinion in Elektriciteits Produktiemaatschappij Zuid-Nederland EPZ, ( 24 ) that the term ‘technical unit’ is not defined and can therefore be interpreted flexibly.

76.

Contrary to what was suggested by the Italian Government, it does not follow from Article 3(e) of Directive 2003/87 that the boundaries of an installation can never be enlarged or reduced, or that the configuration of the installation can never be changed, once the first permit has been granted.

77.

The effect of any other interpretation would be to freeze the description of the installation given in the first permit. This, in my view, would run counter to the first sentence of Article 7 of Directive 2003/87, which envisages changes to the nature, functioning or capacity of an installation.

78.

It follows, as I see it, that technical units carrying out activities which do not have a ‘technical connection’ with each other are to be regarded, in the event of a transfer of one of the units, as distinct installations, ( 25 ) regardless of whether they have been identified in an initial greenhouse gas emissions permit as forming one and the same ‘installation’.

79.

That must be the case as regards EBS’s cogeneration installation and Granarolo’s production facility: they cannot be regarded as forming one and the same installation but rather must be considered to be two distinct installations.

80.

In the following section I will consider whether the emissions of a cogeneration installation such as that at issue in the main proceedings can nevertheless, on the basis that they are already covered by the transferor’s greenhouse gas emissions permit, continue to be attributed to the transferor after the transfer has taken place. I will answer this question in the negative, indicating that responsibility for the emissions can only lie with the operator of such an installation. I will then consider whether, in the circumstances of the main proceedings, a company such as Granarolo can be regarded as still being the ‘operator’ of such an installation. I will conclude that, in my view, only EBS can be considered to be the operator.

81.

I reiterate that Article 3(f) of Directive 2003/87 defines ‘operator’ as meaning any person who ‘operates or controls’ an installation or, where this is provided for in national legislation, to whom ‘decisive economic power over the technical functioning’ of the installation has been delegated.

82.

Furthermore, the purpose of the ETS is, as I observed in point 31 of this Opinion, to reduce greenhouse gas emissions in a cost-effective and economically efficient manner. It is not to restrict the transactions that can be carried out by undertakings operating installations which are subject to the ETS. As I observed in point 49 of this Opinion, this is clear from the fact that the third sentence of Article 7 of Directive 2003/87 expressly envisages that the operator may change.

83.

Having regard to that purpose, I consider, as do Granarolo, EBS and the Commission, that a greenhouse gas emissions permit can only cover the installations or parts of installations which are ‘operated’ by the undertaking holding the permit.

84.

In my view, any other interpretation would run counter to the objectives of Directive 2003/87 because, as Granarolo rightly observed at the hearing, it would mean that the permit could be held by a natural or legal person who was no longer in a position to control the installation’s emissions. Bearing in mind the risk that, in such a case, the emissions might not be properly controlled or reported, that would undermine the ETS.

85.

It seems to me, moreover, that the approach proposed by the Italian and Czech Governments, according to which the permit would be linked to the installation rather than the operator, is misconceived since, as the Commission rightly observed at the hearing, it is clear from Article 6(1) of Directive 2003/87 that the greenhouse gas emissions permit is issued on the basis that there is an operator capable of monitoring and reporting emissions. ( 26 )

86.

The formal requirements set out, inter alia, in Article 6(2) of that directive also indicate that the permit can only be held by the operator. ( 27 ) In particular, the issue of such permits is, under that provision, subject, inter alia, to compliance with the obligation on the operator to surrender, by 30 April of the current year, in order to have them cancelled, a number of allowances equal to their total emissions during the preceding calendar year. ( 28 ) The link between that obligation and the greenhouse gas emissions permit confirms, in my view, that no undertaking other than the operator on which the obligation to surrender the quotas falls can be the holder of the permit. ( 29 )

87.

The wording of Article 4 of Directive 2003/87 seems to me to corroborate that interpretation. It obliges Member States to ensure that, from 1 January 2005, no installation carries out any activity listed in Annex I resulting in emissions specified in relation to that activity unless its operator holds a permit issued by a competent authority or the installation is excluded from the ETS. ( 30 )

88.

In my view it follows from those provisions that a greenhouse gas emissions permit can only cover the installations or parts of installations which are ‘operated’ by the undertaking holding the permit and in relation to which that undertaking is in a position to monitor and report the emissions.

89.

It does not seem to me that the Czech Government’s argument that Directive 2003/87 should be interpreted in the light of the provisions of other directives relating to industrial emissions, and more specifically Article 4(3) of Directive 2010/75/EU, ( 31 ) could lead to a different outcome.

90.

The Czech Government considers that it is necessary, for the purposes of Directive 2003/87, to take account of the fact that, under Article 4(3) of Directive 2010/75, it is possible for different parts of the same installation to have different operators. In its view, the existence of more than one operator for different parts of the same installation cannot prevent those parts being regarded as forming a single installation. In particular, the issuance of a greenhouse gas emissions permit is not dependent on the existence of a sole operator.

91.

However, that argument does not alter the fact that, as is apparent from the provisions I have referred to above, a greenhouse gas emissions permit can only be issued where there is at least one operator capable of monitoring and reporting the emissions of such an installation. Furthermore, it certainly does not follow that the permit can be held by a person who does not operate the relevant installation.

92.

In any event, that argument relates to the situation in which a single installation has several operators, which, as is apparent from section B of this Opinion, is not the situation in the present case. ( 32 ) As I see it, therefore, the Czech Government’s line of thinking is immaterial.

93.

In the light of the foregoing, I take the view that the emissions of a cogeneration installation cannot be attributed to its former owner on the sole ground that they are already covered by its greenhouse gas emissions permit. They can be attributed only to the operator of that installation, or in other words the person who is in a position to monitor and report the emissions, and is responsible for them.

94.

In the circumstances of the case in the main proceedings, the terms of the contract between Granarolo and EBS do not seem to me to indicate that Granarolo retains such control over the cogeneration installation that it remains the ‘operator’ and the installation’s emissions can still be attributed to it, despite the change of owner.

95.

I reiterate that, according to Granarolo and EBS, the transfer of ownership of the cogeneration installation meant that Granarolo ceased to have any control over it.

96.

The Italian Government rejects that argument and maintains that Granarolo continues to operate the installation. It argues that that installation still depends on the energy needs of Granarolo’s production facility, given that EBS has (i) made a contractual commitment to supply Granarolo for a period of 12 years with the energy required for the operation of the facility, (ii) granted Granarolo a preferential option to repurchase the installation, and (iii) agreed that no maintenance or repair work will be carried out without Granarolo’s approval.

97.

In that regard, I have already indicated in points 32 to 36 of this Opinion that it is apparent from the terms agreed between Granarolo and EBS that only EBS has the power to increase or reduce the total amount of energy produced by the cogeneration installation.

98.

This power is in no way limited by the option to repurchase held by Granarolo, or by the need to obtain prior approval from Granarolo before carrying out works to the installation.

99.

The file before the Court does not disclose any other factual circumstances which might indicate that Granarolo continues to operate the installation.

100.

Subject to the matters to be verified by the referring court, those considerations are sufficient, in my view, to conclude that Granarolo is not in a position to monitor the emissions from the cogeneration installation at issue in the main proceedings and cannot be regarded as the ‘operator’ to which those emissions are to be attributed. As I see it, only EBS can be considered to be the operator.

101.

In my view, it follows from the foregoing that a cogeneration installation and a production facility such as those at issue in the main proceedings cannot be regarded as forming one and the same ‘installation’ within the meaning of Article 3(e) of Directive 2003/87.

102.

In that regard I consider, in particular, that there is no ‘technical connection’ between the activity carried out in a cogeneration installation such as that at issue in the main proceedings and the activities of a production facility which, like the facility operated by Granarolo, is connected to the national grid, and could continue to function even if the cogeneration installation’s activity were to cease.

103.

Furthermore, unless the contractual terms agreed between the transferor and the transferee, or other factual circumstances, indicate that the transferor retains such control over the installation as to remain the ‘operator’ within the meaning of Article 3(f) of Directive 2003/87 – which does not seem to me to be the case in the circumstances of the case in the main proceedings – it is only the transferee that can be regarded as having that role, and thus as being able to monitor and report the emissions from that installation. Those emissions cannot, therefore, be attributed to the transferor and must be removed from its greenhouse gas emissions permit, since it is irrelevant that the cogeneration installation from which they came and the production facility were, prior to the transfer, considered to form one and the same installation.

104.

I set out below my reasons for considering that the ‘aggregation rule’ in paragraph 3 of Annex I to Directive 2003/87 is, in the circumstances of a case such as that in the main proceedings and having regard to the fact that the rated thermal input of the cogeneration installation is below 20 MW, compatible with the emissions relating to the activity transferred by Granarolo to EBS ceasing to come within the substantive scope of that directive.

105.

In my view, this outcome in no way represents improper circumvention of the ETS rules, but is simply a consequence of the express intention of the legislature to lay down a de minimis threshold and to include within the substantive scope of Directive 2003/87 only those installations with a total rated thermal input in excess of 20 MW.

106.

In that regard I would note, first, that it is not the purpose of the ‘aggregation rule’ to prevent economic operators from transferring their installations to third parties, or to create a situation where all installations operating by means of ‘combustion of fuels’ are, so far as possible, included in the ETS. ( 33 ) On the contrary, it is apparent from its wording that it is intended to apply ‘in order to decide upon [the installation’s] inclusion in the [ETS]’, the implication being precisely that there are situations in which the installation will not meet the conditions for inclusion. ( 34 )

107.

Secondly, the possibility that the emissions associated to a transferred installation might escape the ETS cannot be regarded as an incentive to operators of installations subject to the ETS to subdivide those installations, and transfer ownership to as many subsidiary or associated companies as necessary to ensure that, once the operation has been completed, there is no installation above the 20 MW threshold.

108.

In that regard, it follows from section D of this Opinion that if, in spite of a change of owner, it is apparent from the contractual terms agreed between the parties, or from other factual circumstances, that the transferor continues to operate the technical unit or units in which the transferred activity is carried out, the transferor can still be regarded as responsible for the associated emissions. Where relevant, therefore, the aggregation rule will continue to apply as it did before the transfer.

109.

It seems to me that this is enough to avoid improper circumvention of the ETS, while preserving operators’ freedom to make legitimate organisational decisions concerning their activities and to exercise their freedom of contract.

110.

Thirdly, I find it difficult to understand why it should be the case that an operator such as Granarolo would be able to increase its emissions allowance beyond what had previously been authorised in order to take into account the emissions of a new technical unit built on its site that has no technical connection with its other activities, ( 35 ) but, following the transfer of that unit to a third party, would not be able to extract the corresponding emissions from its greenhouse gas emissions permit solely because it was the former operator.

111.

At that stage, its situation is no different from that of another operator which, without any previous connection with that technical unit, decided to enter into an energy supply contract with the same third party. I would add that, in the present case, if EBS had itself built a cogeneration installation near Granarolo’s production facility instead of buying Granarolo’s installation, it would not have been covered by the ETS in the first place because it would not have exceeded the 20 MW threshold. ( 36 )

112.

Lastly, I would point out that the general objective of the ETS is to reduce overall greenhouse gas emissions. That objective would best be achieved if it were possible to do what Granarolo and EBS are seeking to do in the main proceedings, that is to transfer an installation designed to produce electricity and heat to a specialist undertaking which is able to control the emissions in the most efficient way possible.

113.

In the light of the foregoing, I propose that the Court of Justice reply to the questions referred by the Tribunale Amministrativo Regionale per il Lazio (Regional Administrative Court, Lazio, Italy) as follows: