Key Facts
- •ABX Air, Inc. appealed a £382,900 penalty under the UK Emissions Trading Scheme (UK ETS) for failure to surrender sufficient allowances.
- •The penalty is one of the first issued under the UK ETS.
- •ABX Air argued the penalty violated Article 1 of the First Protocol to the European Convention on Human Rights (A1P1) by not allowing for mitigating circumstances.
- •ABX Air failed to meet the surrender deadline due to its late application for an Emissions Monitoring Plan (EMP) and misunderstanding of the Letter of Authority (LoA) procedure.
- •The Environment Agency had taken steps to communicate the requirements of the UK ETS through newsletters and guidance documents.
Legal Principles
Article 1 of the First Protocol to the European Convention on Human Rights (A1P1): Right to peaceful enjoyment of possessions.
European Convention on Human Rights
Section 3(1) of the Human Rights Act 1998: Duty to interpret legislation compatibly with Convention rights.
Human Rights Act 1998
Proportionality: A fair balance must be struck between the general interest and individual rights.
Krayeva v Ukraine [2022] ECHR 41; Gyrlyan v. Russia [2018] ECHR 816
Appellate tribunals can only review whether a decision-maker acted unreasonably or erred in law.
R. (Begum) v Special Immigration Appeals Commission [2021] UKSC 7
Force Majeure: A defence in EU law, but not explicitly in the UK ETS.
Billerud Karlsborg AB v Naturvardsverket [2013] EUECJ C-203/12; Eurofit SA v BIRB [2013] EUECJ C-99/12
Outcomes
The appeal was dismissed.
ABX Air's failure to surrender allowances was due to its own inaction and misunderstanding, not circumstances justifying a breach of A1P1. The court interpreted the UK ETS regulations to allow for a review of the penalty's imposition based on Human Rights Act principles, but not for a force majeure defence.