Major Win for Lithuanian Carriers at the CJEU: Provision, Costing €620 Million Annually, Annulled

• The CJEU has annulled a provision that obliged road freight vehicles to return to their country of origin every 8 weeks.
• This is one of the largest cases of annulment of EU legislation in the entire CJEU’s case law.
• The provision has resulted in up to 2.5 billion extra kilometres travelled by trucks in 2023 alone. This contributed to 2.9 million tonnes of additional CO2 emissions into the atmosphere.
• This is a historic decision showing that both Lithuania and other peripheral countries can successfully defend their interests against rules initiated by the central EU countries.

4 October was a triumphant day for Lithuania – after four years of proceedings, Lithuania won a case against the European Parliament and the Council on the organisation of freight transportation in the EU.

The Court of Justice of the European Union (CJEU) delivered its long-awaited judgment in the Mobility Package case brought by Lithuania, making it a landmark victory for carriers in Lithuania and other peripheral countries of the European Union (EU). The CJEU upheld the Advocate General’s opinion and annulled the provision requiring road freight vehicles to return to their country of origin every 8 weeks. The case is now closed, and the respective provision can no longer be applied – Lithuanian carriers can continue their operations without this disproportionate and costly obligation.

Provision Costing €620 Million a Year

The Mobility Package is a set of EU rules adopted in 2020 to regulate the road transport sector. Some of the new provisions, including the requirement to return trucks, have caused a lot of controversy in peripheral EU countries such as Lithuania, Malta, Poland, Cyprus, Bulgaria, Romania and Hungary, as these countries had been disproportionately challenged by the afore-mentioned rules. All these countries have brought legal actions against the European Parliament and the Council.

The Lithuanian Government was represented in the case by a joint team, consisting of the Ministry of Justice and the law firm Ellex Valiunas representatives.

As Agnė Kisieliauskaitė, Associate Partner at Ellex Valiunas, points out, “under the return clause, trucks engaged in international transport had to return to their country of origin every 8 weeks. Although this provision was officially labelled as a measure to combat the practice of ‘letterbox’ companies, it was particularly burdensome for carriers in peripheral countries, for whom the long distances involved made such journeys costly and irrational. Trucks operating in Western Europe had to return to Lithuania every 8 weeks, even if they had no need for cargo or technical inspection. As the rule did not provide for any “cooling-off” period, i.e. how long the truck had to stay in Lithuania, in practice the trucks could even go abroad again immediately or the next day. These trips, without any practical need, disproportionately increased costs and contradicted the EU’s environmental objectives.”

The European Commission estimates that the application of this provision has generated up to 1.9 million additional journeys in 2023 alone, with up to 2.5 billion extra kilometres travelled by lorries. This contributed to 2.9 million tonnes of additional CO2 emissions into the atmosphere. According to publicly available data from the International Transport and Logistics Alliance, the cost to Lithuanian hauliers of implementing the truck return requirement is €620 million per year.

4 Years of Proceedings and 14 Filed Lawsuits

Lithuania brought the case before the CJEU back in 2020, arguing that the return requirement was adopted without an impact assessment and without considering that it creates an uneven competition for peripheral EU Member States, whose hauliers face significantly higher logistics and operational costs than those in the EU centre. According to Lithuania, this provision not only undermined the business environment, but also contradicted the fundamental principle of proportionality and the EU’s environmental objectives of reducing carbon dioxide emissions and creating an efficient transport system. Lithuania’s claims were supported by other countries, including Latvia and Estonia, which did not bring independent actions.

Gintarė Taluntytė, Associate Partner at Ellex Valiunas, indicates that the Mobility Package case was before the CJEU for as long as four years, with as many as 14 actions brought, which demonstrates the complexity of the case.

One of the biggest cases of annulment of EU law in the CJEU’s case law

“A Grand Chamber of 15 judges of the CJEU was set up to deal with the complex issues raised in the case. This is the first case in which Lithuania has challenged regulations and directives adopted by the European Parliament and the Council in the regular legislative process, and one of the largest annulment cases in the entire case law of the CJEU. This case and its representation required a great deal of effort, both in digging deep into the complexities of the Mobility Package, presenting our arguments and evidence to the CJEU, and coordinating Lithuania’s position with the stakeholders. We are pleased that the joint efforts of the Ministry of Justice and us have succeeded in reaching a favourable decision for Lithuania by annulling the protectionist measures imposed by the central EU Member States,” says Gintarė Taluntytė.

Povilas Drižas, Secretary General of the International Transport and Logistics Alliance (TTLA), says that the lifting of the requirement to return trucks is a major achievement.

“Until the hearing, the TTLA had consistently provided stakeholders in Brussels with reasoned information based on facts and objective data. We are pleased that our insights on the economic and environmental consequences were heard and that some of the arguments we put forward were upheld by Brussels,” says Mr Drižas.

Lithuanian carriers will be more competitive in the EU transport market

In November 2023, the Advocate General of the CJEU (who gives an independent opinion on how the CJEU should decide the case) delivered his opinion, which supported the arguments of Lithuania and other Member States and proposed to annul the requirement to return the trucks. The Advocate General noted that the European Parliament and the Council did not assess the impact on the transport sector and the environment when adopting the provision, which led to the requirement being considered disproportionate and unlawful.

The judgment, delivered by the CJEU on 4 October, fully upholds the Advocate General’s opinion and annulled the provision in question. This means that the requirement to return the trucks to their country of origin every 8 weeks is no longer valid and cannot be applied from the date of entry into force of this provision. This decision opens up new opportunities for Lithuanian carriers to operate without unnecessary administrative restrictions and to better compete in the EU transport market.

Moreover, if carriers have received any sanctions for non-return of their trucks in other Member States, this decision will also provide a basis for challenging such sanctions.

Contributes to the EU’s goal of decarbonising the transport sector

The CJEU ruling is a major victory for Lithuania, as well as for Lithuanian carriers and other players in the transport sector, as it overturns one of the most important and most criticised provisions of the Mobility Package. The decision not only makes it easier for carriers in Lithuania and other peripheral countries to do business, but also contributes to the EU’s ambition to decarbonise the transport sector by preventing unnecessary journeys.

It also underlines the importance of EU legislation being in line with the principles of proportionality, especially when it comes to specific national interests and operational circumstances. This decision will also be a historic one, showing that both Lithuania and other peripheral countries can successfully defend their interests against rules imposed by the larger central EU countries.