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February 16, 2023

EU looks to fine three member states over failure to incorporate climate directive

The European Commission has referred Croatia, Hungary and Portugal to the Court of Justice of the European Union.

The European Commission has asked to impose financial penalties on Croatia, Hungary and Portugal because of their failures to transpose the EU’s Renewable Energy Directive into their national legislation.

The directive, which was adopted in 2018, enshrines a legal framework for developing renewable energy in the EU, setting a binding target for 2030 across the bloc of at least 32 per cent renewable energy. EU member states were required to transpose the directive into their legislation by June 30 2021.

“The Commission has been providing continuous support to the Member States to transpose the rules, but Croatia, Hungary and Portugal have so far failed to notify appropriately where they have transposed each provision of the Directive in their national legislation,” it said on February 15.

The commission sent a formal notice letter to all EU member states in July 2021 and urged the three countries in May 2022 to comply with their obligations to clearly indicate how they have transposed the directive into their national measures.

The three countries “are the only three Member States who have failed to notify any correlation table or explanatory document specifying where they have transposed each provision of the Directive,” the commission continued.

“Therefore, the Commission is referring these Member States to the Court of Justice of the European Union.”

The average duration of cases before the Court of Justice is around 12 to 18 months, according to Guillaume Croisant, a managing associate in the ESG practice of law firm Linklaters. He added that cases about transposition delays usually require limited debates and could be shorter.

The commission added that it has started infringement procedures against all 27 member states over their apparent “failure to notify complete transposition measures” regarding the enforcement of the revised Renewable Energy Directive by June 30 2021. 

Latvia and Poland could join the three countries set for referral to the European courts, the commission said.

It has sent ‘reasoned opinions’ – formal requests to comply with EU law – to the two countries for having not fully transposed rules over the promotion of energy use from renewable sources, again as set out in the directive.

“To date, Latvia and Poland have only partially transposed the directive,” the commission said. 

“They now have two months to comply with the transposition obligation and notify the Commission. Otherwise, the Commission may decide to refer the cases to the Court of Justice of the European Union.”

This article has been amended since its original publication to include comments about the case’s possible duration.

A service from the Financial Times