National revenue caps on electricity producers can sit below the EU ceiling of €180 per megawatt hour, the Court of Justice ruled on Thursday. The judgment in case C-187/25 settles a question that has hung over the bloc’s emergency energy measures since the energy crisis of 2022.

The dispute opened in Bulgaria. EVN Bulgaria Renewables challenged the way the tax authority applied revenue caps to income from its premium contract, and a national court asked Luxembourg whether a stricter cap was allowed. The Court said yes for the period from December 2022 to June 2023, provided the national measure respects safeguards such as proportionality and non-discrimination.

The answer matters because the legal text left room for argument, and the case tested how far national governments could adapt an emergency tool to local conditions. Regulation 2022/1854 set the €180 figure as a ceiling for what low-cost generators could keep from the market. The Commission proposed the cap in September 2022 as an emergency intervention, after governments failed to agree on wider market reform. It applied to inframarginal producers, a group that covers renewables, nuclear and lignite plants whose costs stay low while gas pushes up the price of power.

Under the scheme, revenue above the cap went to national governments, which had to use it to help consumers cut their bills. Brussels at the time expected the measures to raise more than €140 billion across the Union. The regulation also placed a levy on fossil fuel companies whose 2022 profits exceeded the previous three-year average by more than 20 percent.

Some capitals chose to go lower than €180 and set tighter revenue caps at home. Those national revenue caps reflected a political wish to protect consumers from high bills, and they often hit wind and solar operators with older contracts. Producers objected that the regulation fixed one number and that anything stricter reduced their income beyond what the text allowed. The Court sided with the governments, holding that the EU figure marks an upper limit rather than a fixed rate.

Investors had warned that stricter revenue caps could chill new projects at a time when Europe needs more clean power. The Court did not address that policy worry, because its task was to read the regulation, but the argument will return in debates on future crisis tools.

For renewable investors, the ruling lowers the odds of winning back money lost under the stricter national limits. Several courts across the Union have heard similar claims, and the Luxembourg judgment now gives them a clear reference point. Lawyers who follow the file expect fewer successful challenges in cases that mirror the Bulgarian facts.

Governments gain something too, although the margin is narrow. The safeguards in the ruling mean that revenue caps must be proportionate and must treat comparable producers alike. A cap that singled out one technology without a good reason would still risk annulment, and national courts will check each scheme against that test.

The decision also arrives while the Commission and member states debate how to protect households from future price spikes. Officials have pointed to the 2022 measures as a template for emergency action, and this ruling confirms that the template left room for national choices. It suggests that any future emergency regulation will face questions about how much freedom countries keep.

For now, the message from Luxembourg is clear. Revenue caps set below the €180 ceiling are lawful when they stay within the safeguards, and the producers who contested them have lost a key argument.