1. 

Is the introduction of a support scheme for electricity produced from renewable energy sources which issues green certificates to producers of green electricity established in a particular region and requires electricity suppliers to surrender each year a number of green certificates corresponding to a quota and which does not permit them to use guarantees of origin issued in another Member State of the European Union or of the European Economic Area (EEA) compatible with the free movement of goods and the prohibition of discrimination?

2. 

That is the essence of the main question raised in the present request for a preliminary ruling, which also concern the interpretation of the provisions of Directive 2001/77/EC of the European Parliament and of the Council of 27 September 2001 on the promotion of electricity produced from renewable energy sources in the internal electricity market, ( 2 ) and Directive 2003/54/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in electricity and repealing Directive 96/92/EC. ( 3 )

3. 

Situated as they are in an area of interaction and potential confrontation between two very powerful forces in the European project — the free movement of goods and protection of the environment — the present cases appear at first sight to require the Court to engage in the difficult and hazardous exercise of reconciling and seeking a balance between those objectives, both of which are of fundamental significance.

4. 

In my view, however, it will not be necessary for the Court to undertake that exercise because the national rules at issue, prohibiting as they do guarantees of origin from other countries from being taken into account, do not and cannot have environmental protection as their objective.

5. 

In the present Opinion I shall argue that although Article 5 of Directive 2001/77 must be interpreted as not precluding domestic rules for the support of renewable energy, such as those at issue in the main proceedings, which, by issuing green certificates to producers of green electricity in a particular region and by requiring electricity suppliers to surrender each year a number of green certificates corresponding to a quota, preclude guarantees of origin issued in another Member State of the European Union or of the EEA from being taking into account, Article 28 EC and Article 11 of the Agreement on the European Economic Area of 2 May 1992 ( 4 ) do, however, preclude such rules, which hinder in a discriminatory way trade between Member States without being justified by imperative requirements relating to environmental protection.

6.

Adopted, according to the first recital in its preamble, in order to contribute to environmental protection and sustainable development, to create local employment, to have a positive impact on social cohesion, to contribute to security of supply and to make it possible to meet more quickly the targets set by the Kyoto Protocol to the United Nations Framework Convention on Climate Change, adopted on 11 December 1997 ( 5 ) and approved on behalf of the European Community by Decision 2002/358/EC, ( 6 ) Directive 2001/77 set national indicative targets for the production of electricity from renewable energy sources, in order to achieve a global share of 22% by 2010.

7.

Recitals 10, 11 and 14 to 16 in the preamble to Directive 2001/77 read as follows:

…

8.

Article 1 of Directive 2001/77 provided that its purpose was ‘to promote an increase in the contribution of renewable energy sources to electricity production in the internal market for electricity and to create a basis for a future Community framework thereof’.

9.

Article 3(1) of that directive provided:

‘Member States shall take appropriate steps to encourage greater consumption of electricity produced from renewable energy sources in conformity with the national indicative targets referred to in paragraph 2. These steps must be in proportion to the objective to be attained.’

10.

Article 4 of the directive, entitled ‘Support schemes’, provided:

‘1.   Without prejudice to Articles 87 and 88 of the [EC] Treaty, the Commission shall evaluate the application of mechanisms used in Member States according to which a producer of electricity, on the basis of regulations issued by the public authorities, receives direct or indirect support, and which could have the effect of restricting trade, on the basis that these contribute to the objectives set out in Articles 6 and 174 of the [EC] Treaty.

2.   The Commission shall, not later than 27 October 2005, present a … report …, if necessary, … accompanied by a proposal for a Community framework with regard to support schemes for electricity produced from renewable energy sources.

Any proposal for a framework should:

…

…’

11.

Article 5 of Directive 2001/77, entitled ‘Guarantee of origin of electricity produced from renewable energy sources’, provided:

‘1.   Member States shall, not later than 27 October 2003, ensure that the origin of electricity produced from renewable energy sources can be guaranteed as such within the meaning of this Directive according to objective, transparent and non-discriminatory criteria laid down by each Member State. They shall ensure that a guarantee of origin is issued to this effect in response to a request.

…

3.   A guarantee of origin shall:

4.   Such guarantees of origin, issued according to paragraph 2, should be mutually recognised by the Member States, exclusively as proof of the elements referred to in paragraph 3. Any refusal to recognise a guarantee of origin as such proof, in particular for reasons relating to the prevention of fraud, must be based on objective, transparent and non-discriminatory criteria. …’

12.

Directive 2001/77 was incorporated into the EEA Agreement by Decision of the EEA Joint Committee No 102/2005 of 8 July 2005, which entered into force on 1 September 2006 and which amended Annex IV (Energy) to that agreement. ( 7 )

13.

Articles 2, 3(2) and 4 to 8 of Directive 2001/77 were repealed with effect from 1 April 2010 by Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC. ( 8 ) That directive repealed Directive 2001/77 in its entirety with effect from 1 January 2012.

14.

Directive 2003/54 forms part of the ‘second energy package’ adopted by the EUROPEAN UNION legislature with a view to the progressive liberalisation of an internal market in electricity and gas.

15.

Recital 26 in the preamble to Directive 2003/54 states:

‘The respect of the public service requirements is a fundamental requirement of this Directive, and it is important that common minimum standards, respected by all Member States, are specified in this Directive, which take into account the objectives of [consumer] protection, security of supply, environmental protection and equivalent levels of competition in all Member States. It is important that the public service requirements can be interpreted on a national basis, taking into account national circumstances and subject to the respect of Community law.’

16.

Under Article 3(1) and (2) of that directive:

‘1.   Member States shall ensure, on the basis of their institutional organisation and with due regard to the principle of subsidiarity, that, without prejudice to paragraph 2, electricity undertakings are operated in accordance with the principles of this Directive with a view to achieving a competitive, secure and environmentally sustainable market in electricity, and shall not discriminate between those undertakings as regards either rights or obligations.

2.   Having full regard to the relevant provisions of the [EC] Treaty, in particular Article 86 thereof, Member States may impose on undertakings operating in the electricity sector, in the general economic interest, public service obligations which may relate to security, including security of supply, regularity, quality and price of supplies and environmental protection, including energy efficiency and climate protection. Such obligations shall be clearly defined, transparent, non- discriminatory, verifiable and shall guarantee equality of access for EUROPEAN UNION electricity companies to national consumers. …’

17.

Directive 2003/54 was incorporated into the EEA Agreement by Decision of the EEA Joint Committee No 146/2005 of 2 December 2005, which entered into force on 1 June 2007 and which amended Annex IV (Energy) to that agreement. ( 9 )

18.

The Flemish Decree on the organisation of the electricity market (Vlaams decreet houdende de organisatie van de elektriciteitsmarkt) ( 10 ) of 17 July 2000 had as its purpose inter alia the implementation of Directives 2001/77 and 2003/54. It was repealed by a decree of 8 May 2009.

19.

Article 2(17) of the Electricity Decree defined ‘green certificate’ as ‘a transferable intangible good which indicates that a producer, in a year declared therein, has generated a quantity of green energy as declared therein, expressed in kWh’.

20.

Article 22 of that decree provided that ‘[f]or green electricity which the producer demonstrates that it was produced in the Flemish Region ..., the regulatory authority shall issue, on request by the producer, a [green certificate] for each 1000 kWh generated’.

21.

Article 23(1) of that decree provided that ‘[e]very supplier who supplies electricity to final customers connected to the distribution network or the transmission network is obliged, annually, before 31 March, to surrender to the regulatory authority the number of green certificates determined by the application of paragraph 2 ...’.

22.

Article 23a of the same decree permitted the sale of electricity to final customers in the Flemish Region ‘in so far as the supplier surrenders to the [Vlaamse Reguleringsinstantie voor de Elektriciteits- en Gasmarkt ( 11 )] a corresponding number of green certificates’.

23.

Article 24 of the Electricity Decree provided that the Vlaamse Regering (Flemish Government) ( 12 )‘… shall lay down the detailed implementation rules and procedures for issuing green certificates and shall determine which certificates qualify for fulfilling the obligation referred to in Article 23’.

24.

Article 25 of the same decree provided that that ‘[n]otwithstanding Article [23], the Flemish Government is authorised, on the advice of the regulatory authority, taking into account the existence of equal or equivalent guarantees regarding the issuing of such certificates, to accept certificates for green energy which were not produced in the Flemish Region ...’.

25.

Article 37(2) of that decree provided that ‘the amount of the administrative fine for an infringement of Article 23(1) [a]s from 31 March 2005 … shall be set at EUR 125 for each certificate not surrendered’.

26.

Article 24 of the Electricity Decree is implemented by the Decision of the Flemish Government of 5 March 2004.

27.

In its original version, that decision contained an Article 15(1), which provided that ‘[i]n order to fulfil the green certificate obligation, the VREG shall accept only green certificates granted in respect of electricity produced in the Flemish Region …’.

28.

Following a decision of the Raad van State (Council of State) ordering suspension of the implementation of Article 15 of the Decision of the Flemish Government of 5 March 2004, a Decision of 25 February 2005, applicable in Case C‑204/12, amended that article, removing the words ‘in the Flemish Region’ from Article 15(1).

29.

In addition, in the version resulting from the amending Decision of 8 July 2005, applicable in Cases C‑205/12 to C‑208/12, the Decision of the Flemish Government of 5 March 2004 also contained the following provisions.

30.

Article 1(2)(14) of that decision defined ‘guarantee of origin’ as ‘proof confirming that a quantity of electricity supplied to [final] customers originated from renewable energy sources’.

31.

Article 13(2) and (3) of that decision, appearing in Section III, entitled ‘Registration of green certificates’, was worded as follows:

‘(2)   At least the following data shall by registered by green certificate:

...

...

(3)   The entry referred to in subparagraph 2(6) is:

32.

Article 15(3) of the same decision provided that ‘green certificates which have been used as guarantees of origin in accordance with subsection III may still be used for the purposes of the certificates obligation, provided that the entry referred to in Article 13(2)(6) is “acceptable” ...’.

33.

Articles 15a and 15c of the Decision of 5 March 2004, as amended by the Decision of 8 July 2005, contained under subsection III thereof, entitled ‘[u]se of green certificates as a guarantee of origin’, provided:

‘Article 15a. (1)   Green certificates are used as a guarantee of origin when they are surrendered as part of a sale of electricity to final customers as electricity originating from renewable sources.

...

Article 15c. (1)   A guarantee of origin from another region or another country may be imported into the Flemish Region in order to be used as a guarantee of origin, provided that its owner [demonstrates to the VREG that the following conditions are fulfilled]: ...

...

(2)   When the guarantee of origin is imported from another region or another country, the data pertaining to it are registered in the central data bank in the form of a green certificate with the following entries:

...

Green certificates from another region or another country may be registered with the entry “acceptable” in case the Flemish Government decides to accept the certificates concerned by applying Article 25 of [the Electricity Decree].

That registration shall take place after the transfer of the necessary data on guarantee of origin to the VREG by the appropriate department of the other region or country and after the guarantee of origin has been made unusable in that other country or region.

...’

34.

Essent Belgium NV, ( 13 ) a supplier of electricity, was, between 2003 and 2009, subject to the obligation laid down in Article 23(1) of the Electricity Decree annually, before 31 March, to surrender a certain number of green certificates to the Flemish Regulatory Authority for the Electricity and Gas Market, the VREG.

35.

In order to fulfil its obligations in respect of 2005 to 2009, Essent surrendered to the VREG, in addition to the green certificates provided by electricity producers established in the Flemish Region and Walloon Region and in the Brussels Capital Region, guarantees of origin for 2005 from producers established in the Netherlands and in Norway, for 2006 from producers established in Denmark and in Norway, and for 2007 to 2009 from producers established in Norway. ( 14 )

36.

Taking the view that, since the Flemish Government had not adopted any measures to implement Article 25 of the Electricity Decree, only green certificates showing proof of production of electricity in the Flemish Region could be accepted, the VREG, on the basis of Article 37(2) of that decree, imposed on Essent fines of EUR 542 125 in respect of 2005, EUR 234 750 in respect of 2006, EUR 166 125 in respect of 2007, EUR 281 250 in respect of 2008 and EUR 302 375 in respect of 2009.

37.

When Essent appealed against those decisions before the Rechtbank van eerste aanleg te Brussel (Belgium), that court decided to stay the proceedings and refer the following questions to the Court of Justice for a preliminary ruling:

38.

The VREG, the Vlaamse Gewest (Flemish Region) and the Vlaamse Gemeenschap (Flemish Community) ( 15 ) dispute the admissibility of the requests for a preliminary ruling made to the Court on two grounds: first, that the Court does not have jurisdiction to interpret national law or to adjudicate on its compatibility with European Union law and, secondly, that those requests have no relevance as regards the outcome of the dispute in the main proceedings, since they are based on a misinterpretation of domestic law, the national court having wrongly regarded guarantees of origin and green certificates as being the same even though Article 25 of the Electricity Decree does not cover guarantees of origin.

39.

I do not find these two arguments convincing in the light of the rules governing the division of jurisdiction between the Court and the national courts within the framework of the cooperation mechanism established by Article 267 TFEU.

40.

In the first place, according to settled case-law it is for the national courts alone — before which the proceedings are pending and which must assume responsibility for the judgment to be given — to determine, in the light of the particular features of each case, both the need for a preliminary ruling to enable them to give judgment and the relevance of the questions which they refer to the Court. Consequently, where the questions submitted concern the interpretation of European Union law, the Court is in principle bound to give a ruling. The presumption that questions referred by national courts for a preliminary ruling are relevant may be rebutted only in exceptional cases, inter alia where it is quite obvious that the interpretation which is sought of the provisions of European Union law referred to in the questions bears no relation to the purpose of the main action. ( 16 )

41.

Secondly, the Court has held that the fact that the literal wording of the questions referred for a preliminary ruling calls on the Court to rule on the compatibility of a provision of national law with European Union law does not prevent the Court from giving an answer of use to the national court by providing the latter with the guidance as to the interpretation of European Union law necessary to enable that court to rule itself on the compatibility of the national rules with European Union law. ( 17 )

42.

Thirdly, it should be noted that it is not for the Court to interpret domestic law. ( 18 ) The Court must take account, under the division of jurisdiction between the EU courts and the national courts, of the legislative context, as described in the order for reference, in which the questions put to it are set.

43.

In the present case, the national court, which is not seeking an interpretation of domestic law, has doubts as to the compatibility of the regional support scheme for the production of electricity from renewable energy sources with various provisions of European Union law, both primary and secondary law, because that scheme prevents guarantees of origin from other countries from being taken into account. The order for reference clearly sets out the provisions of European Union law for which an interpretation is sought, whilst explaining the link which it establishes between that interpretation and the domestic rules concerned. It also clearly identifies the relevant provisions of national law and the effects of the amendments that were made in 2005. I note moreover that the description it contains of the subject-matter of the dispute in the main proceedings and of the legislative and factual context in which the questions are referred has enabled the parties concerned, within the meaning of the second paragraph of Article 23 of the Statute of the Court of Justice of the European Union, properly to submit their observations.

44.

The requests for a preliminary ruling must, therefore, be declared admissible.

45.

As regards the EEA Agreement, I shall merely note that, according to settled case-law, it is for the Court to ensure that the rules of that agreement which are identical in substance to those of the TFEU are interpreted uniformly within the Member States. ( 19 )

46.

By its questions, which should be considered together, the national court asks, in essence, whether Article 5 of Directive 2001/77 or, where appropriate, Articles 28 EC and 30 EC and Articles 11 and 13 of the EEA Agreement or also the principle of non-discrimination contained, inter alia, in Article 12 EC, Article 4 of the EEA Agreement and Article 3 of Directive 2003/54 must be interpreted as precluding national rules for the support of renewable energy, such as those at issue in the main proceedings, which do not allow guarantees of origin issued in another Member State of the European Union or of the EEA to be taken into account.

47.

Two opposing interpretations of the provisions of Directive 2001/77 are in conflict here.

48.

On the one hand, the VREG and Others and the Commission, on the basis of the distinction between the system of recognition of guarantees of origin introduced by that directive in order to ensure the free movement of green electricity and that of green certificates introduced in the context of national support schemes, refute the idea of there being any incompatibility between the Flemish rules and that directive.

49.

According to the Commission, it follows from recitals 10 and 11 in the preamble to Directive 2001/77 that the system of guarantees of origin put in place by Article 5 of that directive to facilitate trade in electricity and to increase transparency for consumers by making it possible to establish that the electricity was produced from renewable energy sources, must be distinguished from that of green certificates introduced by certain national support schemes within the meaning of Article 4 of that directive. Those green certificates, which do not operate according to a harmonised system, are intended, for their part, to subsidise the production of green electricity by offering electricity producers supplementary income to cover the additional cost involved in such production. Unlike guarantees of origin, they constitute negotiable instruments that may be traded on a secondary market on which producers compete with one another. It is clear from this that guarantees of origin do not entail a right to benefit from such national support schemes and that Member States are not obliged to recognise guarantees of origin from other Member States as a contribution to fulfilment of national quotas.

50.

Putting forward a line of argument also based on the distinction between guarantees of origin and green certificates, the VREG and Others reject the application of Article 5 of Directive 2001/77, relating to guarantees of origin, in favour of Article 4 of that directive, relating to support schemes. According to the VREG and Others, guarantees of origin, designed to facilitate trade in green electricity and increase transparency, have a different purpose from that of green certificates, which are instruments contributing to fulfilment of the national quota obligation to supply electricity produced from renewable energy sources. Noting, however, that the national court expressly limited the scope of its question to examination of the compatibility of the domestic rules with Article 5 of Directive 2001/77, the VREG and Others state, in that regard, that the system of guarantees of origin existing in the Flemish Region is compatible with the conditions laid down in that provision.

51.

Essent and the Netherlands Government, by contrast, maintain the opposite view, arguing that the scheme at issue does not allow guarantees of origin from other Member States to be taken into account, although, under Article 5(4) of Directive 2001/77, that exclusion may be permitted only on the basis of objective, transparent and non-discriminatory criteria.

52.

It follows that, from their point of view, the Flemish rules are not compatible with the principle of mutual recognition of guarantees of origin.

53.

I have little doubt about this question, the answer to which must be sought, according to the Court’s methods of interpretation, by examining in turn the wording, the overall scheme and the objectives of Directive 2001/77.

54.

Article 5(3) of that directive provides that guarantees of origin, which specify the energy source from which the electricity was produced, specifying the dates and places of production, serve to enable electricity producers to demonstrate that the electricity they sell is produced from renewable energy sources. Article 5(4) of that directive sets out the principle of mutual recognition of guarantees of origin, but limits the scope of such recognition by providing that guarantees should be recognised ‘exclusively as proof’. The presence of the adverb ‘exclusively’ demonstrates the intention of the European Union legislature to limit the effects of mutual recognition to proof of the green origin of the electricity produced.

55.

Recital 10 in the preamble to Directive 2001/77 states, moreover, that Member States are not required to recognise the purchase of a guarantee of origin from other Member States or the corresponding purchase of electricity as a contribution to the fulfilment of a national quota obligation and that schemes for the guarantee of origin do not by themselves imply a right to benefit from national support mechanisms.

56.

It follows that Directive 2001/77 does not require guarantees of origin from foreign producers to be taken into account under a national support scheme such as that at issue in the main proceedings based on the issuance of green certificates.

57.

This literal interpretation is supported by the information to be derived from analysis of the overall scheme of Directive 2001/77. It is common ground that that directive draws a clear distinction between the system of guarantees of origin and national support mechanisms for renewable energy, which it deals with in two separate articles. Article 4 of Directive 2001/77 merely provides for an evaluation by the Commission of the application of the support mechanisms used in the Member States, stating expressly that such mechanisms can have the effect of restricting trade, on the basis that they contribute to the objectives set out in Articles 6 and 174 of the EC Treaty, whilst Article 5 of that directive defines and regulates guarantees of origin, which are designed to facilitate trade in green electricity, in order to ensure their mutual recognition. It is clear from this that guarantees of origin and green certificates constitute, for the purposes of Directive 2001/77, two separate and different legal instruments.

58.

The interpretation which I propose is, lastly, supported by the objectives of Directive 2001/77, as they appear inter alia from the recitals in the preamble to that directive. It does not seek to bring about full harmonisation of legislation in the sector of electricity produced from renewable energy sources. It merely sets national indicative targets for consumption and leaves the Member States free to choose the nature and content of the measures to be adopted in order to attain those targets, those States thus enjoying a broad measure of discretion. According to recitals 14 to 16 in the preamble to Directive 2001/77, it introduces a transitional scheme for the duration of which the Member States can apply various support mechanisms, including the green certificates scheme, for which it is considered to be ‘too early’ to lay down a Community-wide framework. To require Member States to accept guarantees of origin in the context of support schemes would amount to limiting their discretion in this matter, whereas that was clearly not the intention of the European Union legislature.

59.

Everything goes to show therefore that Directive 2001/77, which makes guarantees of origin and green certificates two separate and different legal instruments, does not itself require the former to be treated as being the same as the latter in the context of national support schemes for the production of electricity from renewable energy sources.

60.

It is necessary therefore to examine whether Articles 28 EC and 30 EC and Article 11 of the EEA Agreement preclude national rules such as those at issue in the main proceedings.

61.

In the view of the national court, which makes reference to PreussenElektra, ( 20 ) the obligation incumbent upon electricity suppliers established in the Flemish Region to purchase Flemish green certificates is, at first sight, to be regarded as a measure having equivalent effect to a quantitative restriction on imports. The Rechtbank van eerste aanleg te Brussel also observes, referring to the content of the letter which the Commission sent to the Kingdom of Belgium on 25 July 2001 when the rules at issue were notified under the Treaty provisions on State aid, that the Flemish authorities had at that time expressly undertaken, ‘in order not to infringe the rules governing the internal market, … to give electricity importers an opportunity to prove that they have imported green electricity’.

62.

According to the VREG and Others, the national court is wrong to presume that guarantees of origin are goods for the purposes of Article 28 EC, since such guarantees cannot be classified as goods in view of their incidental and intangible nature. Only electricity itself can be classified as a good, but the point whether the Flemish rules constitute an obstacle to the free movement of green electricity is not the subject of the request for a preliminary ruling. In any event, the scheme at issue does not create an obstacle, since green electricity produced abroad can be freely imported into the Flemish Region. As for green certificates from other Member States of the European Union or of the EEA, these are not at issue in the cases in the main proceedings, and they do not constitute goods.

63.

Lastly, assuming that an obstacle to the free movement of goods were to be detected, the VREG and Others consider that such an obstacle is justified by imperative requirements relating to the protection of the environment and that the Flemish rules constitute an appropriate and proportionate non-discriminatory measure.

64.

The Commission maintains first of all that although according to the case-law of the Court electricity must be classified as a good for the purposes of Article 28 EC and Article 11 of the EEA Agreement, that is not so as regards guarantees of origin, which are incidental to the electricity in which they facilitate trade. Furthermore, whilst taking the view that rules such as those at issue in the main proceedings, which combine the system of green certificates with that of binding quotas, cannot be regarded as being the same as the scheme at issue in PreussenElektra, since electricity suppliers retain the freedom to procure green electricity originating in other Member States or countries of the EEA, the Commission does not rule out the possibility that the rules at issue are at least potentially capable of restricting the free movement of goods.

65.

The Commission considers, however, that that obstacle is justified by the objective of environmental protection. It contends in that regard that the rules at issue in the main proceedings contribute to the reduction of greenhouse gas emissions, promote a regional approach to pollution, according to the principle that environmental damage should, as a matter of priority, be remedied at source, and comply with the obligation placed on Member States by Directive 2001/77 to set national indicative targets for the consumption of electricity produced from renewable energy sources, as the European Union is seeking in that way to ensure that all Member States contribute in a balanced and proportionate manner to the achievement of European targets for the reduction of greenhouse gas emissions.

66.

Pointing out the absence of harmonisation of public support mechanisms for renewable energy sources, the Commission adds that in view of the differences between Member States as regards climate and geography, it is necessary to avoid pollution being concentrated in regions where it is more difficult to produce green electricity due to a lack of natural resources and to ensure that targeted national support can encourage local production of green electricity in those regions also. According to the Commission, opening up public support to all foreign producers might lead to an influx to those national schemes which offer the most generous conditions, which would jeopardise compliance with the obligation incumbent on all Member States to attain their national targets.

67.

Essent, which observes that in pursuance of the case-law of the Court electricity must be regarded as a good, ( 21 ) states that the rules at issue were adopted in breach of the prohibition of quantitative restrictions on imports and measures having equivalent effect. The refusal, based exclusively on geographical origin, to take into account guarantees of origin from other Member States of the European Union or of the EEA, without considering whether they are equivalent to green certificates issued in the Flemish Region, constitutes an obstacle to imports of green electricity.

68.

The applicant in the main proceedings considers that such a measure cannot be justified by the objective of protecting the environment, since from that point of view foreign guarantees of origin are designed to achieve the same objective as green certificates, namely an increase in the production and consumption of green energy on the internal market. It adds that the objective of encouraging local production cannot be accepted as justification since no mention is made of that objective in the Electricity Decree and it would even conflict with the objective contained in the statement of reasons of that decree of encouraging the development of renewable energy sources in a manner ‘compatible with the market’. Encouraging local production would, in addition, amount to discrimination on grounds of origin in favour of Flemish producers.

69.

In order to provide an answer to the question referred I shall break my reasoning down into three stages: first I shall seek to establish whether the rules on the free movement of goods are applicable, secondly, I shall examine whether the rules at issue are covered by the prohibition on obstacles and, thirdly, I shall look at the possible justifications.

70.

It should be noted as a preliminary point that, in the absence of harmonisation by Directive 2001/77 of support schemes for renewable energy, Member States continue to be required to observe the fundamental freedoms enshrined in the Treaties, which include the free movement of goods.

71.

In order for that freedom to be applicable, it is necessary for the national rules to have an impact on the movement of goods within the meaning of the EC Treaty. Before deciding whether that is so in the cases in the main proceedings, I should give a brief outline of the way in which the system of green certificates introduced by the Flemish rules operates.

72.

I note first of all that policies for the promotion of renewable energy may employ various instruments, such as systems of guaranteed purchase prices, auction mechanisms or arrangements involving green certificates. The latter have been introduced in several Member States but follow operating rules which are very different in nature. ( 22 )

73.

As regards in particular the Flemish rules at issue in the main proceedings, the system of green certificates, introduced with effect from 1 January 2001, is based on a dual mechanism of issuing green certificates to electricity producers using renewable energy sources and at the same time introducing binding quotas for electricity suppliers.

74.

On the one hand, green certificates are issued to electricity producers in respect of a predefined quantity of electricity produced from renewable energy sources or by high-quality combined heat and power installations. Since those certificates can be sold, the mechanism adds value to the production of green electricity by allowing producers to be remunerated not only through the sale of electricity via the grid but also through the sale of certificates on the market.

75.

On the other hand, there is an obligation on electricity suppliers to purchase a certain quota of green certificates, which is calculated according to the total quantity of electricity they sell to consumers. Suppliers who are unable to surrender the quota of green certificates required each year are obliged to pay an administrative fine of a graduated amount, corresponding de facto to a ceiling price, with the proceeds from the fines going into a fund to support projects for the development of green energy.

76.

Clearly, that system, which is presented as being intended to encourage the production of electricity from renewable energy sources in the Flemish Region, is liable to have an impact on imports of green electricity from abroad. From that point of view, I consider that it is not necessary to demonstrate that guarantees of origin or green certificates are in themselves goods for the purposes of Article 28 EC. Suffice it to say that it is undoubtedly clear from the case-law of the Court, which has given a broad definition of goods, ( 23 ) that electricity must be classified as a good, ( 24 ) so that the movement of electricity, under the abovementioned article, must not in principle be impeded.

77.

I shall now proceed to an examination of a possible restriction.

78.

As a preliminary point, it should be recalled that, according to settled case-law, all trading rules enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially, trade within the European Union are to be considered as measures having an effect equivalent to quantitative restrictions and are, on that basis, prohibited by Article 28 EC. ( 25 ) It is necessary therefore to determine the effect that national rules such as those at issue in the main proceedings are liable to have on the free movement of electricity.

79.

I do not dispute the fact that such a scheme does not prevent electricity suppliers from importing green electricity from other Member States of the European Union or of the EEA. However, that scheme is liable to impede, albeit indirectly, the movement of green electricity.

80.

First, the system gives an economic advantage to producers of green electricity established in the Flemish Region over other producers of green electricity, since the sale of green certificates allows them to enjoy additional revenue besides that deriving from the sale of electricity.

81.

Secondly, that system is likely to deter electricity suppliers from importing green electricity whose provenance is established by guarantees of origin, since imports of such electricity cannot be taken into account in order to fulfil the quotas imposed on them, so that at the same time as purchasing that electricity, the price of which may already be higher than that of electricity produced from conventional sources, they must purchase Flemish green certificates.

82.

It follows that the national rules at issue, which favour the marketing of green electricity produced in the Flemish Region and restrict in equal measure the potential for importing green electricity, must be regarded as being a measure having equivalent effect to a quantitative restriction on imports.

83.

That measure also entails discriminatory effects, since it restricts the advantage obtained from the sale of green certificates to the production of Flemish electricity rather than to the production of green electricity from other Member States of the European Union or of the EEA.

84.

Assuming that the arguments of the VREG and Others are to be interpreted as calling into question the similarity between green electricity imported from other Member States, the provenance of which is certified by a guarantee of origin, and green electricity produced in the Flemish Region, the provenance of which is guaranteed by a green certificate, it should be made clear that the VREG and Others do not claim that Flemish green certificates offer an additional guarantee as regards demonstrating the green origin of the electricity produced. The Flemish rules, which define a green certificate as a document indicating that a producer, in a year declared therein, has generated a quantity of green energy as declared therein, ( 26 ) accept that the certificates can be used as a guarantee of origin. As the VREG and Others acknowledged at the hearing, the only difference between green certificates and guarantees of origin is that green certificates are issued to producers producing in the Flemish Region. In other words, electricity guaranteed by a green certificate is no ‘greener’ than electricity certified by a guarantee of origin, the only difference between the two being their geographical provenance.

85.

It remains to be seen whether or not that discriminatory obstacle is justified.

86.

The Court has already held on several occasions that environmental protection is a public interest objective which justifies restrictions on fundamental freedoms. It has even delivered a number of original judgments on this matter, demonstrating a particular preference for environmental protection.

87.

According to the Court’s general approach to the possibility of justifying restrictions on trade within the European Union, only measures which are applicable to goods or services without distinction, whatever their origin, can be justified on grounds of imperative requirements relating to the public interest. If the measure is discriminatory, however, it can be justified only by an express derogating provision. ( 27 ) Protection of the environment, which has only recently been recognised in EUROPEAN UNION law, does not appear among the public interest grounds listed in Article 30 EC, which cannot be extended to include cases other than those exhaustively provided for, but constitutes an imperative public interest ground recognised by the Court. Accordingly, that objective can in principle only justify non-discriminatory measures.

88.

Case-law has, however, undergone a change of course, which has led to extension of the possibility of relying on objectives that do not appear in Article 30 EC in order to justify national restrictions on the free movement of goods. ( 28 ) Those changes in case-law took place in two main steps.

89.

The first step was the so-called ‘Walloon waste’ case, ( 29 ) which concerned the Belgian legislation prohibiting treatment in Wallonia of waste originating in another Member State or in a region other than the Walloon Region. In that case the Court, after classifying waste as goods and noting that imperative requirements can be taken into account only in the case of measures which apply without distinction to both domestic and imported products, held that ‘the contested measures cannot be regarded as discriminatory’, in view of the ‘particular nature of waste’, ( 30 ) which must be disposed of as close as possible to the place where it is produced according to the principle that environmental damage should, as a matter of priority, be remedied at source. ( 31 )

90.

A second step was taken in the judgments in Aher-Waggon ( 32 ) and PreussenElektra. The latter judgment concerned the obligation on electricity suppliers to purchase electricity produced from renewable energy sources at minimum prices. Whilst that measure did not appear to apply without distinction since it clearly favoured national producers of green electricity, from which traders were obliged to obtain their supplies, the Court, without examining whether the measure was directly discriminatory, held that it was justified by its environmental objectives since it contributed to the reduction of greenhouse gas emissions, by its objective of protecting the health and life of humans, animals and plants, and by the particular features of electricity.

91.

Pursuit of an environmental objective may therefore have the result either of neutralising the discriminatory nature of a national measure, despite the fact that it is acknowledged, or of simply avoiding an examination of whether or not the measure is discriminatory.

92.

Although we can only welcome those changes, which demonstrate that environmental concerns are now enshrined within the context of the internal market, I regret that the exception to the rule that only express derogating provisions can justify a discriminatory measure does not appear expressly in the case-law of the Court, but rather emerges, surreptitiously, from case-by-case reasoning along differing lines. It is necessary, in my view, to clarify the situation by giving formal recognition to the possibility of relying on environmental protection as a justification for measures which impede the free movement of goods, even if they are discriminatory. I see three advantages in such express enshrinement.

93.

First, such recognition appears to me to be dictated by a concern for legal certainty, since it offers the advantage of removing any doubts that may subsist regarding the possibility of invoking environmental protection as an imperative requirement relating to the public interest in order to justify a discriminatory measure.

94.

Secondly, failure to determinate whether measures constituting obstacles are discriminatory appears to me to present the major drawback of not allowing any variation in the extent of the judicial review to which such measures are subject in order to determine whether they are appropriate for securing attainment of the objective pursued and do not go beyond what is necessary for attaining it. I think that discriminatory measures, particularly those which infringe a principle as fundamental as that of the prohibition of direct discrimination on grounds of nationality, ought to be subject to a strict requirement of proportionality.

95.

Thirdly, I regard such express recognition as an opportunity to acknowledge the prominent place of environmental protection within the legal order of the European Union and thus continue the changes that began with the judgment in ADBHU, ( 33 ) which made environmental protection ‘one of the Community’s essential objectives’. Sustainable development appeared from then on among the European Union’s aims as listed in Article 3 TEU, ( 34 ) paragraph 3 of which states that ‘the European Union will work for the sustainable development of Europe based on … a high level of protection and improvement of the quality of the environment’. Moreover, achievement of a high level of environmental protection is laid down as an objective of the European Union in Article 191 TFEU, to which Article 174 EC corresponds, and Article 37 of the Charter of Fundamental Rights of the European Union. Furthermore, under Article 11 TFEU, to which Article 6 EC corresponds, ‘[e]nvironmental protection requirements must be integrated into the definition and implementation of the Union policies and activities, in particular with a view to promoting sustainable development’.

96.

Express elevation of environmental protection to the level of an imperative requirement relating to public interest that may be invoked in order to justify measures that restrict the freedoms of movement even where such measures are discriminatory would, in my view, contribute to ensuring its pre-eminence over other considerations.

97.

Theoretical justification for such an outcome can, it seems to me, be found in the principle of integration, according to which environmental objectives, the transverse and fundamental nature of which have been noted by the Court, ( 35 ) should be taken into account in the definition and implementation of European Union policies. Although that principle does not require that priority should always be given to environmental protection, it does mean that the environmental objective may be routinely balanced against the European Union’s other fundamental objectives. ( 36 )

98.

It is therefore necessary to determine whether the Flemish rules, which in my view constitute a discriminatory obstacle to the free movement of goods, can be justified by requirements relating to environmental protection.

99.

I shall consider in turn each of the justifications put forward.

100.

I shall begin with the justifications which are based on PreussenElektra. In that judgment the Court relied upon the progressive nature of the liberalisation of the electricity market, which ‘leaves some obstacles to trade in electricity between Member States in place’ ( 37 ) and on the nature of electricity, which is such that, ‘once it has been allowed into the transmission or distribution system, it is difficult to determine its origin and in particular the source of energy from which it was produced’. ( 38 ) The Court also took into account the fact that the German rules contributed to the reduction in greenhouse gas emissions.

101.

In my view, legal developments in the context both of the internal market in electricity and in the promotion of renewable energy mean that the first two justifications can no longer be accepted.

102.

I note, in the first place, that the judgment in PreussenElektra was delivered before Directive 2003/54 was adopted, which marked a further step in the liberalisation of the electricity market in order, inter alia, to combat partitioning of the markets.

103.

Secondly, I note that the justification based on the impossibility of determining the origin of electricity cannot reasonably be put forward today, since the purpose of the introduction of guarantees of origin by Directive 2001/77 was specifically to guarantee the renewable origin of the electricity produced. ( 39 )

104.

Nor do I find the justification based on the contribution to the reduction of greenhouse gas emissions convincing, since electricity produced from renewable energy sources in another Member State of the European Union or of the EEA contributes to the reduction of gas emissions in the Flemish Region to the same extent as electricity produced in that region from renewable energy sources. ( 40 )

105.

The Commission also argues that the principle that environmental damage should, as a matter of priority, be remedied at source must be respected. However, I do not think that that principle, according to which, in order to prevent environmental damage, pollution must be remedied at source by using less harmful processes and products and which therefore justifies local treatment of waste, ( 41 ) can legitimately be invoked to justify discrimination against electricity produced from renewable energy sources in other Member States.

106.

Nor does it appear that the rationale for making it impossible for suppliers to submit guarantees of origin from other countries is to be found in the objective of ensuring security of energy supply. From the external point of view, that is to say, as regards conventional energy sources coming from third countries, security of supply is clearly not at issue. Nor has it been established that security of internal supply is likely to be jeopardised, provided it can be improved, inter alia, through the development of interconnections between grids, which, by promoting diversification of supply, would make it possible to compensate for the limitations of renewable energy with regard to the objective of ensuring continuity of electricity supply. ( 42 )

107.

The argument alleging that Directive 2001/77 laid down national targets and that compliance with those targets might be jeopardised if public support were available to all foreign producers of green electricity does not appear to me to be convincing either.

108.

In its Communication to the Council and the European Parliament concerning the share of renewable energy sources in the European Union, ( 43 ) the Commission, having pointed out that although national targets were defined in terms of the consumption of electricity produced from renewable energy sources, the consumption of electricity was defined as national production plus imports minus exports, stated that a Member State can include a contribution from an import from another Member State only if the exporting state has accepted it explicitly and no double counting occurs.

109.

The Commission therefore accepted the possibility of taking into account imported green electricity in order to determine whether the target of the importing Member State is achieved. In those circumstances, I do not see how imports of green electricity from abroad could jeopardise achievement of national targets.

110.

Although I am aware of the concern to avoid an unequal share among States of plants producing electricity from renewable energy sources, I regard environmental protection as being the subject of a European Union common policy. Environmental protection is not moreover to be understood in purely national terms, but is part of a European momentum, inter alia in the field of combatting climate change. ( 44 ) It is therefore necessary to take into account also the advantages that may arise from trade in green electricity within the European Union. Although it is difficult to measure the true impact of such trade, there is reason to believe that it might contribute to reducing the cost of renewable energy by permitting a more rational location of production.

111.

Two further essential considerations support my conviction that environmental protection cannot justify the rules at issue.

112.

First, the distinction between guarantees of origin and green certificates, of which the VREG and Others have sought to demonstrate the clarity and significance, is in reality very confused both in the Flemish rules and in Flemish practice. ( 45 ) A green certificate has value as a guarantee of origin since it can be used in the sale of electricity to final customers. Also, as the VREG and Others themselves acknowledged at the hearing, a guarantee of origin may, like a green certificate, be sold separately from electricity. The green certificate and the guarantee of origin are therefore appropriately conceived of as two parts of the same instrument, according to a concept that is very remote from the original reasoning of Directive 2001/77. Paradoxically, the certificate, whether or not it is renamed a guarantee of origin, may be freely exported and thus become integrated within foreign systems of support for renewable energy, whilst, on the other hand, the importation of foreign instruments is prohibited.

113.

It should also be pointed out that the practice adopted by the VREG is open to criticism in so far as it consists, in reality, in transforming a guarantee of origin into a green certificate, purely for the benefit of the regional system at issue, since it is as a green certificate that it registers them for the purpose of using them, where appropriate, as such if the need arises and solely if it decides so to do. The fact remains that such potentially usable green certificates have a price, the one which they had as guarantees of origin, the amount of which, as we were informed at the hearing, is, all things being equal, significantly less than the price of a ‘normal’ green certificate. It follows that that method of price setting avoids what should have been the normal method of price setting, that is to say, comparison between supply and demand on the secondary market in green certificates, whose normal operation is thus disrupted by such a practice. The Commission stated in its written pleadings and confirmed at the hearing that eight Member States operate the system of green certificates. That gives some idea therefore of the significance of the disruption thus caused by the system under consideration.

114.

Secondly, it is clear from the letter sent by the Commission to the Kingdom of Belgium on 25 July 2001, despite the Commission’s surprising interpretation of it at the hearing, that the current Flemish rules are not compatible with the commitments made by the Flemish Government at the time those rules were notified under the Treaty provisions on State aid. For my part, I am very reluctant to condone this failure to abide by a commitment, which cannot be justified on grounds of environmental protection.

115.

Those are the reasons why I consider that although Article 5 of Directive 2001/77 must be interpreted as not precluding domestic rules for the support of renewable energy, such as those at issue in the main proceedings, which exclude guarantees of origin issued in another Member State of the European Union or of the EEA from being taking into account, Article 28 EC and Article 11 of the EEA Agreement do, however, preclude such rules, which hinder in a discriminatory way trade between Member States without being justified by imperative requirements relating to environmental protection. ( 46 )

116.

In the light of the above considerations, I am of the opinion that the following answer should be given to the Rechtbank van eerste aanleg te Brussel (Belgium):

Article 5 of Directive 2001/77/EC of the European Parliament and of the Council of 27 September 2001 on the promotion of electricity produced from renewable energy sources in the internal electricity market must be interpreted as not precluding domestic rules for the support of renewable energy, such as those at issue in the main proceedings, which provide for the issuance of green certificates to producers of green electricity established in a particular region and require electricity suppliers to surrender each year a number of green certificates corresponding to a quota whilst not allowing guarantees of origin issued in another Member State of the European Union or of the European Economic Area to be taken into account. Article 28 EC and Article 11 of the Agreement on the European Economic Area of 2 May 1992 do, however, preclude such rules, which hinder in a discriminatory way trade between Member States of the European Union or of the European Economic Area without being justified by imperative requirements relating to environmental protection.