Environmental Law 2023 Comparisons

Principles

EU environmental policy is based on the precautionary principle, the “polluter pays” principle, and the principles that preventative action should be taken, and that environmental damage should as a priority be rectified at source.

• The precautionary principle is a risk management tool that enables restrictive actions to be taken when, following a thorough scientific assessment, uncertainty about a suspected risk to human health or to the environment remains.
• The polluter pays principle provides that those who are responsible for pollution should bear the costs of managing to prevent, control and remedy its damage to human health or the environment. It is implemented by the Environmental Liability Directive (Directive 2004/35/CE (ELD)). It is also increasingly provided for in EU secondary legislation via the establishment of extended producer responsibility schemes.

Policies

Environmental policy has become increasingly important in EU policy-making. In December 2019, the European Commission (the “Commission”) launched the European Green Deal. This sets out the EU’s strategy to achieve climate neutrality by 2050, and to place environmental protection and sustainability at the heart of the EU’s economic growth strategy.

As part of the Green Deal, the Commission proposed a Zero pollution action plan, which envisions that by 2050 air, water and soil pollution will be reduced to levels no longer considered harmful to health and natural ecosystems. This is accompanied by a number of 2030 targets to speed up reducing pollution at source, including improving:

• air quality to reduce the number of premature deaths caused by air pollution by 55%;
• water quality by reducing plastic litter at sea (by 50%) and microplastics released into the environment (by 30%); and
• soil quality by reducing nutrient losses and chemical pesticides’ use by 50%.

The other 2030 targets include reducing:

• the EU ecosystems where air pollution threatens biodiversity by 25%;
• the share of people chronically disturbed by transport noise by 30%; and
• waste generation, including residual municipal waste by 50%.

The Green Deal includes the Chemical strategy for sustainability, which aims to protect the environment against hazardous chemicals. This involves a number of actions including: banning the most harmful chemicals in consumer products except for essential use; phasing out non-essential uses of per- and polyfluoroalkyl substances (PFASs); and measures aimed at improving the assessment of chemical risks and hazards.

The Commission also proposed revisions to the Industrial Emissions Directive, the main EU instrument regulating pollutant emissions from industrial installations. This revision would bring additional intensive farming and industrial activities within its scope, introduce tighter permit controls on air and water emissions, place greater emphasis on energy, water and material efficiency and reuse, and the use of safer chemicals in industrial processes.

Laws

There are a multitude of EU laws relating to the environment. Some of the main horizontal pieces of environmental legislation include the following:

• Directive 2000/60/EC (the Water Framework Directive);
• Directive 2008/56/EC (the Marine Strategy Framework Directive);
• Directive 2009/147/EC (the Birds Directive);
• Directive 92/43/EEC (the Habitats Directive);
• Directive 2004/35/EC (the Environmental Liability Directive (ELD));
• Directive 2011/92/EU (the Environmental Impact Assessment Directive); and
• Directive 2010/75/EU (the Industrial Emissions Directive (IED)).

There are also a number of product or sector specific pieces of legislation, including:

• Directive 2008/98/EC (the Waste Framework Directive (WFD));
• Directive 2012/19/EU (the Waste Electrical and Electronic Equipment Directive (WEEE));
• Directive 2011/65/EU (the Restriction of certain hazardous substances in electrical and electronic equipment or “RoHS 2” Directive);
• Regulation (EC) No 1907/2006 (concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH)); and
• Regulation (EC) No 1272/2008 on the classification, labelling and packaging of substances and mixtures (CLP Regulation).

The EU has no inspection or enforcement authority. It relies on member states (MSs) to implement and enforce those laws at the national, regional, and local levels.

The Commission is responsible for ensuring that EU law is implemented properly by MSs and can launch infringement proceedings against MSs when this is not the case. Such proceedings may end before the EU Court of Justice (CJEU). In most cases, the Commission detects infringements by its own means, often focusing on whether MSs have properly transposed measures into their national laws.

The Commission may be notified of failures to implement or comply with EU environmental law via complaints submitted by EU citizens, businesses and organisations, as well as petitions and questions from the European Parliament and its members.

The Commission may also exercise certain “regulatory” functions, including the adoption of technical delegated or implementing acts on the requirements in EU secondary law and the issuing of guidance on matters of EU law.

There are three main EU agencies relevant to EU environmental law:

• the European Environment Agency (EEA), which collects data and produces assessments on a range of environmental topics;
• the European Chemicals Agency (ECHA), which manages the implementation of the EU’s chemicals legislation; and
• the Joint Research Centre, which provides independent, evidence-based science and knowledge, supporting EU policies.

The EU Network for the Implementation and Enforcement of Environmental Law (IMPEL) brings together the environmental authorities of the EU, EEA and EFTA MSs, and acceding and candidate countries. It aims to promote professional collaboration, and information and best-practice exchange between environmental regulators.

ECHA hosts the Forum for Exchange of Information on Enforcement. This is a body made up of representatives of national enforcement authorities. It works towards co-ordinating the enforcement of REACH, CLP, and other key chemical regulations in the EU MSs, Norway, Iceland and Liechtenstein.

Air Quality

The Ambient Air Quality Directives (Directive 2004/107/EC and Directive 2008/50/EC) set quality standards for 13 air pollutants, to be attained by all MSs against specified timelines. The directives set standards for both short-term and long-term mean concentrations. They lay down common methods and criteria to assess air quality and require MSs to set up a network of monitoring stations and sampling points. MSs must report to the Commission. They must also provide information to the public on the results of their air quality assessments annually, and up-to-date air quality measurements periodically.

Where the standards are not met in a particular zone or agglomeration, MSs must prepare and implement air quality plans to address the sources of emissions responsible.

The National Emissions Ceilings Directive (Directive (EU) 2016/2284) also sets national commitments to reduce emissions for five transboundary air pollutants by 2020 and 2030 and requires MSs to establish action plans. There are other directives setting emission standards or other requirements for sources of air pollution in different sectors including the IED, Regulation (EU) 2019/631 on passenger cars and light commercial vehicles and the Non-Road Mobile Machinery Regulation (Regulation (EU) 2016/1628).

Water

The Water Framework Directive (2000/60/EC) (WFD) and the Marine Strategy Framework Directive (2008/56/EC) provide the legal frameworks for the protection of fresh and marine waters.

The WFD concerns the protection of inland surface waters, coastal waters, transitional waters, and groundwater. It requires MSs to protect restore water bodies to reach good chemical and ecological status, and to prevent deterioration. MSs are required to prepare specific plans and measures to achieve their targets for each river basin district within their territory. The WFD also includes requirements to monitor and report on water status within each district.

The WFD is supported by the Environmental Quality Standards Directive (2008/105/EC), which lays down maximum concentration limits for certain substances. MSs must monitor the presence of these substances, and take measures to achieve these standards. The Groundwater Directive similarly identifies a list of substances and standards to be achieved for groundwater.

The Marine Strategy Framework Directive established a framework for MSs to take necessary measures to achieve or maintain good environmental status in the marine environment by the year 2020. It required MSs to develop a strategy for the protection, preservation and restoration of its marine waters, and to prevent and reduce inputs in the marine environment, with a view to phasing out pollution.

In addition to those two Directives, the Urban Waste Water Treatment Directive (91/271/EEC) plays an important role in ensuring water quality by laying down requirements on the collection, treatment and discharge of urban waste water, as well as discharges from certain industrial sectors.

Natural Habitats, Flora and Fauna

The Habitats Directive (92/43/EEC) and Birds Directive (2009/147/EC) aim to ensure that species and habitats within their scope are maintained or restored to good conservation status. They focus on (i) the protection of endangered species; and (ii) the designation and protection of core sites.

• Endangered species: the legislation contains protections for endangered species listed in Annex IV to the Habitats Directive, and all naturally occurring wild bird species in the EU.
• Core sites: the legislation lays down rules on the designation and protection of core sites for the protection of species and habitat types listed in Annex I and II of the Habitats Directive and Annex I of the Birds Directive, as well as for migratory birds. These sites are collectively referred to as the Natura 2000 Network.

Under these Directives, MSs must monitor progress and report to the Commission every six years on the conservation status of species and habitat types. The results are published in a “State of Nature in the European Union” report.

The consequences for infringement of these laws by private persons is regulated at MS level.

Under Article 5 of the ELD, competent authorities, as designated by MSs, may at any time (inter alia):

• require the operator to provide information on any imminent threat of environmental damage or in suspected cases of such an imminent threat or on damage that has occurred;
• require the operator to take necessary preventative or remedial measures;
• give instructions to the operator on the necessary preventative or remedial measures to be taken; or
• themselves take necessary preventative or remedial measures.

The IED establishes a requirement for a permit for certain activities in the following industries:

• energy industry (including combustion of fuels in installations with a total rated thermal input of 50 MW or more, refining of mineral oil and gas, gasification or liquefaction of coal or other fuels in installations with a total rated thermal input of 20 MW or more);
• production and processing of metals (including metal ore, production of pig iron or steel, processing of ferrous and non-ferrous metals);
• mineral industry (including production of cement, lime, magnesium oxide, asbestos, manufacture of glass including glass fibre with a melting capacity exceeding 20 tonnes per day, melting mineral substances including the production of mineral fibres with a melting capacity exceeding 20 tonnes per day, melting mineral substances including the production of mineral fibres with a melting capacity exceeding 20 tonnes per day);
• chemical industry (including production of organic and inorganic chemicals);
• waste management (including disposal or recovery of hazardous waste with a capacity exceeding 10 tonnes per day, disposal or recovery of waste in waste incineration plants or in waste co-incineration plants); and
• other activities (including production in industrial installations of pulp from timber or other fibrous materials, paper or cardboard with a production capacity exceeding 20 tonnes per day, or one or more of the following wood-based panels: oriented strand board, particleboard or fibreboard with a production capacity exceeding 600 m3 per day).

A detailed list of all activities is available in Annex I to the IED. Under Article 5 of the IED, the competent authorities designated by the MSs are responsible for issuing the permits.

At the national level, MSs are responsible for upholding EU regulations, with enforcement procedures and sanctions following national law.

In 2016, the Commission clarified that its enforcement policy involved monitoring how EU law is applied and implemented, solving problems with MSs to remedy possible breaches of the law and taking infringement action when appropriate.

The European Green Deal also adds that the Commission will “work with the MSs to step up the EU’s efforts to ensure that current legislation and policies relevant to the Green Deal are enforced and effectively implemented”. The Commission’s DG Environment focuses enforcement action on the following:

• cases where MSs have failed to communicate national transposition measures;
• cases where national transposition measures have incorrectly transposed EU Directives;
• cases where MSs have failed to comply with a CJEU judgment; and
• cases involving possible serious damage to EU financial interests.

The IED does not contain explicit provisions regarding the transfer of permits. It is up to the MSs to establish transfer provisions.

According to Article 8(2) of the IED, in the event of a breach of the permit conditions, MSs shall ensure that:

• the operator immediately informs the competent authority;
• the operator immediately takes the measures necessary to ensure that compliance is restored within the shortest possible time; and
• the competent authority requires the operator to take any appropriate complementary measures that the competent authority considers necessary to restore compliance.

Article 79 of the IED states that MSs shall establish effective, proportionate and dissuasive penalties applicable to infringements of the national provisions adopted pursuant to the IED.

The ELD establishes a framework of environmental liability based on the polluter pays principle. Under Article 2(1) of the ELD, “environmental damage” is:

• damage that has significant adverse effects on reaching or maintaining the favourable conservation status of such habitats or species;
• damage that significantly adversely affects the ecological, chemical, or quantitative status or the ecological potential of the waters concerned, or the environmental status of the marine waters concerned; or
• land contamination that creates a significant risk of human health being adversely affected as a result of the direct or indirect introduction, in, on or under land, of substances, preparations, organisms or micro-organisms.

In 2021, the Commission issued guidelines clarifying the scope of the term “environmental damage”:

• environmental damage caused by any of the occupational activities listed in Annex III to the ELD (such as energy industries, production and processing of metals, mineral industries, chemical industries, etc) and any imminent threat of such damage occurring by reason of any of those activities; or
• damage to protected species and natural habitats caused by any occupational activities other than those listed in Annex III to the ELD, and any imminent threat of such damage occurring by reason of any of those activities, whenever the operator has been at fault or negligent.

The Environmental Crime Directive (2008/99/EC) (ECD) establishes measures relating to criminal law to protect the environment more effectively. Article 3 ECD contains a list of environmental offences that MSs must criminalise if they are unlawful and committed intentionally or with serious negligence. The specific powers, procedures and enforcement mechanisms employed by the competent national authorities are governed by national MS law.

Under Article 6 ELD, the competent authorities, designated by MSs, may:

• require the operator to provide information on any imminent threat of environmental damage or in suspected cases of such an imminent threat; and
• require the operator to provide supplementary information on any damage that has occurred.

The Corporate Sustainability Reporting Directive ((EU) 2022/2464) (CSRD) establishes an obligation for certain companies to report on sustainability matters (including environmental, social and human rights, and governance factors as per Article 1(2)(b) of the CSRD) (see 7.5 ESG Requirements).

The ELD does not address this question. It is up to the MSs to adopt their own rules.

The CSRD imposes sustainability reporting obligations on certain companies. Companies subject to the CSRD will have to report according to European Sustainability Reporting Standards (ESRS). All sustainability topics must be reported if they are assessed as “material”, ie, either or both the company’s operations, including its upstream and downstream value chain, affect society or the environment sustainability topics affect the company’s financial health.

For types of liability, see 5.1 Key Types of Liability.

For defences, Article 4 of the ELD provides the following:

• an act of armed conflict, hostilities, civil war or insurrection;
• a natural phenomenon of exceptional, inevitable and irresistible character;
• an incident in respect of which liability or compensation falls within the scope of any of the International Conventions listed in Annex IV to the ELD, including any future amendments thereof, which is in force in the member state concerned; and
• pollution of a diffuse character, where it is not possible to establish a causal link between the damage and the activities of individual operators.

The ELD shall not apply to:

• such nuclear risks or environmental damage or imminent threat of such damage as may be caused by the activities covered by the Treaty establishing the European Atomic Energy Community or caused by an incident or activity in respect of which liability or compensation falls within the scope of any of the international instruments listed in Annex V to the ELD (as amended); or
• activities the main purpose of which is to serve national defence or international security, nor to activities the sole purpose of which is to protect from natural disasters.

The operator can also limit its liability in accordance with national legislation implementing the Convention on Limitation of Liability for Maritime Claims (LLMC), 1976 (as amended) or the Strasbourg Convention on Limitation of Liability in Inland Navigation (CLNI), 1988 (as amended).

ELD

The main legal instrument is the ELD establishing a framework of environmental liability based on the polluter pays and preventative principles.

While the ELD does not refer to “companies”, it does to operators upon whom particular duties can be imposed by public authorities. In practice, those operators are companies. If an operator enters insolvency, this may hamper the application of the ELD. Article 14(1) ELD thus encourages MSs to develop financial security instruments to enable financial guarantees for operators to comply with the ELD. There is no formal duty to provide financial guarantees under the ELD.

ECD

Article 6 ECD states that “legal persons” can be held liable for environmental crimes if committed for their benefit or by any person with a “leading position within the legal person”, acting individually or as part of an organ of the legal person (based on their power to represent the legal person, to take decisions on behalf of the legal person, and to exercise control over the legal person). Under Article 2(d) ECD, a “legal person” is “any legal entity having such status under the applicable national law, except for States or public bodies exercising State authority and for public international organisations”.

The principal EU environmental taxation initiatives in the EU include:

• the Energy Taxation Directive (2003/96/EC) (ETD);
• the Emissions Trading Scheme (Emissions Trading Directive (2003/87/EC) (ETS));
• the Carbon border adjustment mechanism (CBAM) (Regulation (EU) 2023/956); and
• the Levy on non-recycled plastic packaging waste (Regulation (EU, Euratom) 2021/770) on the calculation of the own resource based on plastic packaging waste that is not recycled, on the methods and procedure for making available that own resource, on the measures to meet cash requirements, and on certain aspects of the own resource based on gross national income (Levy).

“Good” environmental citizenship can lead to better conditions under the various taxation initiatives by the Commission, such as under the ETD, the ETS, the CBAM and the Levy. Exemptions do exist under these schemes, eg, under the ETD, certain energy intensive undertakings receive a higher share of free allowances if they are at risk of carbon leakage.

Other incentives have been created by the EU, including the EU Innovation Fund, which will provide EUR10 billion support between 2020 and 2030 for European companies that invest over EUR7.5 million in sustainable technology. The EU renewable energy financing mechanism will make it easier for regions to launch projects at a time when their economy is under pressure.

On penalties, failure to comply with the EU incentives can lead to fines. “Bad” environmental citizenship (eg, breaching environmental law) could also lead to legal action under the ELD and ECD. Other penalties can be imposed by national law.

See 7.1 Liability for Environmental Damage or Breaches of Environmental Law.

ELD

Arguably, the ELD can enable claims against the parent company, as the parent company controls the occupational activities which caused the damage. It is arguable that this is only possible if legislation is enacted holding the parent to be an operator of the activities of its subsidiary. Joint liability of a company and its parent company and/or shareholders would arguably require modifying the Directive.

Currently, no harmonised rule exists on enterprise (group) liability within the EU. There are significant divergences in how the “corporate veil” is lifted in different MSs. In Germany, for example, a parent company can be held liable for breaches by an affiliate. In other MSs, this is less common. There have not yet been any CJEU cases regarding parental liability for environmental damage or breaches of environmental law in the context of corporate groups. In Akzo Nobel (Case C-97/08), the CJEU held that the parent company could be attributed liability for the conduct of its subsidiary as they were viewed as belonging to the same “single economic unit”.

ECD

Under Article 6 ECD, a parent company and/or shareholder could fall within the definition of “legal persons”, and therefore similar arguments could be made regarding its applicability to parent companies as those made regarding the ELD. However, criminal law remains largely a national prerogative.

See 17.3 Corporate Disclosure Requirement.

Companies can be subject to the Non-financial Reporting Directive (2014/95/EU) (NFRD) and will be subject to the CSRD depending on the relevant criteria.

The NFRD applies to approximately 11,700 companies across the EU:

• large undertakings, exceeding two out of three of the following criteria for two successive accounting periods:
1. a balance sheet total of EUR20 million; or
2. a net turnover of EUR40 million; or
3. average number of employees of 500; and
• public-interest entities, meaning any entity which is:
1. trading transferable securities on the regulated market of any member state; or
2. a credit institution; or
3. an insurance undertaking; or
4. designated by a MS as a public interest entity (more info on how the MS defines the scope here).

The CSRD will cover all large companies that meet two of the following three criteria:

• turnover exceeding EUR40 million per year;
• a balance sheet total of more than EUR20 million; or
• more than 250 employees (averaged over a year).

(Note that these criteria are subject to change.)

See 7.1 Liability for Environmental Damage or Breaches of Environmental Law.

ELD

Per Article 3(1) ELD, a director could fall within the definition of “operator” as they could qualify as a “natural” person who controls the occupational activity, or the person to which the decisive economic power of the undertaking has been delegated.

Regarding the question of other officers being held liable, the Fipa case (C-534/13) before the CJEU is relevant. The question asked was whether parties other than the polluter could be held liable for pollution costs, even though the contamination was not caused by them. The CJEU held that, on the basis of the polluter pays principle, only the responsible operator could be held liable. The ELD can therefore not be extended to impose liability on the innocent owner. However, Article 16 ELD provides MSs with the possibility to adopt more stringent provisions in relation to the remediation of environmental damage.

Regarding penalties, Article 8 states that the operator shall bear the costs for the preventative and remedial actions taken under the ELD. Annex II of the ELD sets out the common framework to be followed to choose the most appropriate measures to remedy the environmental damage. Article 16 states that MSs are free to adopt more stringent provisions concerning the remedying of environmental damage.

ECD

Article 6 ECD states that “legal persons” can be held liable for environmental crimes if committed for their benefit or by any person with a “leading position within the legal person”, acting individually or as part of an organ of the legal person (based on their power to represent the legal person, to take decisions on behalf of the legal person, and to exercise control over the legal person). Under Article 2(d) ECD, a “legal person” is “any legal entity having such status under the applicable national law, except for States or public bodies exercising State authority and for public international organisations”.

Accordingly, directors could fall within the definition of “legal persons”, as they could be persons that have a “leading position” within their organisation. However, criminal law remains largely a national prerogative.

Regarding penalties, Article 7 ECD states that MSs “shall take the necessary measures to ensure that legal persons held liable pursuant to Article 6 are punishable by effective, proportionate and dissuasive penalties”.

Per Article 14 ELD, MSs should encourage the development of financial security instruments, including financial mechanisms in case of insolvency, with the aim of enabling operators to use financial guarantees to cover their responsibilities under the Directive. If directors qualify as “operators” pursuant to Article 2(6) of the ELD, then they could have the possibility of insuring against remedies imposed by the ELD. As stated in 9.1 Environmental Insurance, environmental insurance is regulated at MS level.

The rules for (environmental) insurance are regulated at MS level. The ELD does require MSs to encourage the development of financial security instruments and markets by the appropriate economic and financial operators, including in case of insolvencies, so that economic operators can use financial guarantees to cover their responsibilities under the Directive.

EU legislation does not provide rules on direct liability of financial institutions for environmental damage (nor does it require MSs to do so). Rules on lender liability will vary per MS.

Financial institutions can reduce exposure to any claim by conducting due diligence. (It remains to be determined whether financial institutions will be caught by the obligations of the new Corporate Sustainability Due Diligence Directive (CSDDD); see 17.3 Corporate Disclosure Requirement.)

Civil claims principally fall under national law. The EU introduced Directive (EU) 2020/1828 on representative actions for the protection of the collective interests of consumers. It aims to ensure that consumers can protect their collective interests in the EU via representative actions brought by representative entities (so-called qualified entities). Such “class” actions apply to a set number of EU secondary legislation in Annex I to the Directive including the CLP Regulation and Directive 2009/125/EC on ecodesign requirements for energy-related products. The question of civil remedies will generally be a question of MS national law.

The awarding of exemplary or punitive damages is a matter for the national courts of the MSs.

See 11.1 Civil Claims.

Cases concerning civil claims are dealt with by the national courts of EU MSs.

Private contracts can be used to impose obligations on certain parties to comply with applicable laws. Under civil claims, such contracts will be fully valid. However, clauses may be disputed in certain fields of law such as in criminal or competition law proceedings where responsibility for committing an infringement is, in principle, personal. In general, if the clauses comply with national law, they are fully binding.

That said, in administrative or criminal proceedings involving a MS enforcing an EU compliance obligation, it will not be possible for Party A (for example) to contract away responsibility (liability) for compliance with the relevant EU law to Party B. While a private agreement may be in place that Party B pays the penalty, for instance, it will be Party A that the MSs will enforce against.

This varies per MS.

At EU level, unlike for water and air, there are no overarching rules applicable to soil pollution and contaminated land. These rules are defined at MS level.

In July 2023, the Commission proposed a Directive on Soil Monitoring and Resilience to protect and restore soils and ensure that they are used sustainably. The proposal requests MSs to identify and investigate all potentially contaminated sites and map them in a public register. Based on the outcome of their investigation, MSs must take risk reduction measures to address unacceptable risks for human health and the environment. The remediation costs must be borne by the parties responsible for the contamination.

Other EU legislation contains key principles to apply both for the reduction of soil contamination in sites (eg, the IED) and to determine liability in the case of environmental damage (ie, the ELD). 

This is mainly regulated at MS level.

The ELD establishes framework rules on how operators must bear the costs for preventative and remedial actions (including clean-up of contaminated land). This Directive is without prejudice to any provisions on a MS level concerning cost allocation in cases of multiple party causation, in particular concerning the apportionment of liability between the producer and the user of a product. 

MS authorities determine and assess the extent of environmental damage and agree the preventative or remediation measures to be taken by those responsible for the damage. For those operators carrying out dangerous activities listed in Annex III of the ELD (eg, waste management operations), they are subject to strict liability so there is no need to prove fault in order to determine liability. For operators carrying out other activities, it is necessary to establish a causal link between their activity and the damage to determine liability. On the basis of that determination, the MSs will attribute liability.

Liability for traditional civil law damage (property damage, personal injury) falls under each MS’s law.

The rules on admissibility of legal actions seeking redress for damage before MS courts depends on the law of each MS.

At EU level, the ELD only provides that affected individuals and NGOs are entitled to notify public bodies of environmental damage or imminent threat. They can challenge the action or inaction of a public body to prevent and remedy environmental damage.

According to the WFD, MSs require waste operators to obtain a permit from the relevant competent authority. These permits specify factors such as the types and quantities of waste to be treated and other requirements for the site concerned. Waste operator permits are granted for a specified period and may be renewable; they may be combined under a single permit with other required permits. Certain waste operations (ie, disposal of the non-hazardous waste at the place of production; and recovery of waste) may be exempted from the permit requirement. The Landfill Directive (1999/31/EC) specifies the conditions to be granted a landfill permit.

MSs must take the necessary rules to prohibit the abandonment, dumping or uncontrolled management of waste. Enforcement rules and penalties are regulated on a MS level and thus will vary.

As per 4.1 Investigative and Access Powers, each MS competent authority has investigation powers under the ELD.

There are two key policies that set out the EU’s direction on climate change policy:

• the overarching European Green Deal, via which the Commission sets its policies and framework to ensure that the EU is transformed into a modern, resources-efficient and competitive economy; and
• the Fit-for-55 plan from the Commission, which aims to deliver on one of the key goals of the Green Deal to become a climate-neutral economy by 2050.

There are various pieces of legislation relating to climate change in the EU, the keys ones including the following.

• The European Climate Law (Regulation (EU) 2021/1119), in which the EU imposed on itself the obligation to reach climate neutrality by 2050.
• Reducing emissions from power stations, industrial plants and recently also aviation via the EU ETS (Directive 2003/87/EC). It is a cap-and-trade system installed via the ETS Directive.
• Reducing the emissions from sectors not included in the ETS (such as agriculture, business and transport – for now) via the Effort Sharing Regulation ((EU) 2023/857). This sets national targets for MSs.
• CBAM.
• The F-gas Regulation (EU) 517/2014 which phases out (certain) fluorinated gases used in products such as refrigerators or air conditioners, and establishes a market system with quota allocation.
• The Regulation on land, land use change and forestry ((EU) 2018/841), which aims to regulate how the land use sector contributes to the EU’s climate goals.
• The EU Ozone Regulation ((EC) No 1005/2009), which aims to have the EU fulfil its obligations to protect the ozone layer and minimise the use of ozone-depleting substances.
• Rules to regulate emissions from transport, including road transport, shipping and aviation (including a Fuel Quality Directive (2009/30/EC)).
• Various funding programmes to enable the EU to reach those ambitions and rules to boost private funding.

There are two key targets to reduce Greenhouse Gas (GHG) emissions in the EU (leaving aside energy-related targets):

• climate neutral society by 2050; and
• at least a 55% reduction in GHG emissions by 2030 (compared with 1990 levels).

Since 2005, all use of asbestos is banned in the EU both for goods produced and imported into the EU. Asbestos is mainly regulated by Directive 2009/148/EC on the protection of workers from the risks related to the exposure to asbestos at work. The definition of asbestos in this Directive covers six fibrous silicates. Under it, it is necessary to determine if any activity at work is likely to involve risk of exposure. If that is the case, a risk assessment must be carried out including a consultation with the workers. Employers must notify the MS authorities of any activities with exposure to asbestos. Exposure must be reduced to the minimum in the permitted activities. The Directive provides other rules, eg, on training of workers, clothing and equipment of workers.

The Directive will be amended following the Commission’s proposal in 2022 and the agreement between the Parliament and the Council in 2023 to reduce, inter alia, occupational exposure limit value to 0.01 fibres per cm3.

Additional safeguards to protect workers from the risks of asbestos exposure are: (i) Council Directive 89/391/EEC (the “Occupational Safety and Health Framework Directive”), which sets out the main principles of workers’ safety and health at work; and (ii) the Carcinogens, Mutagens and Reprotoxic Substances Directive (2004/37/EC) dealing with risks posed by carcinogens at work. The management of asbestos-containing waste is regulated in the WFD. The EU Construction and Demolition Waste Management Protocol and Guidelines also control the disposal of asbestos waste in landfills.

The WFD is the main legal instrument for treating and managing waste in the EU. It establishes the basic concepts and definitions related to waste management, such as the definition of waste or recycling. It introduces the waste hierarchy, the polluter pays principle and the Extended Producer Responsibility (EPR) and sets separate collection targets for municipal waste.

Waste is broadly defined as any substance or object which the holder discards or intends or is required to discard. Waste must be differentiated from by-products, which are a substance or object resulting from a production process, the primary aim of which is not the production of that item. These should not be regarded as waste if certain conditions are met. Additionally, certain specified waste may cease to be waste when it has undergone a recovery operation and complies with specific criteria to be developed either at EU or MS level.

The WFD establishes a waste hierarchy that MSs should follow. The hierarchy indicates a priority order of the options in treating waste based on how they deliver the best environmental outcome. The priority order is:

• waste prevention;
• preparing for reuse;
• recycling;
• other recovery (eg, energy recovery); and
• disposal in landfills.

Waste operators are required to obtain a permit from the relevant competent authority See 13.5 Rights and Obligations Applicable to Waste Operators for more details.

The WFD recognises the general polluter pays principle, which requires polluters to bear the environmental and social costs of their actions. In particular, this is applied by the EPR concept, which requires MSs to ensure that a producer bears the financial and/or operational responsibility for the management of the product at its waste stage. This tool intends to help meet national or EU recycling and recovery targets.

There are other pieces of legislation for specific waste treatment operations, such as the Landfill Directive (1991/31/EC) and the Waste Shipment Regulation ((EC) 1013/2006). The EU has also regulated various types of waste stream:

• end-of-life vehicles (Directive 2000/53/EC);
• extractive mining waste (Directive 2006/21/EC);
• packaging waste (Council Directive 94/62/EC);
• disposal of polychlorinated biphenyls and polychlorinated terphenyls (PCB/PBT) (Council Directive 96/59/EC);
• RoHS 2;
• sewage sludge (Council Directive 86/278/EEC);
• ship recycling (Regulation (EU) 1257/2013);
• persistent organic pollutants (Regulation (EU) 2019/1021);
• single-use plastics (Directive (EU) 2019/904); and
• WEEE.

The Batteries Regulation ((EU) 2023/1542) includes rules on product requirements (eg, labelling, material composition, design for recycling, etc) and also on the product’s end-of-life management.

This is regulated at MS level. According to the WFD, MSs may decide that the responsibility for arranging waste management is to be borne partly or wholly by the producer of the product from which the waste came and that distributors of such product may share this responsibility.

The WFD, through the EPR principle, mandates MSs to encourage the design of products to reduce their environmental impacts and the generation of waste. As regards the treatment of waste, it only establishes general rules applicable to MSs. In this regard, they must take measures to promote high-quality recycling and achieve overall recycling targets of municipal waste per material (paper, metal, plastic and glass). MSs must also ensure that the disposal of waste is safe and does not endanger human health or the environment.

Each specific waste stream legislation specifies to a greater extent how products must be designed and how they must be treated once they become waste (take back, recovery, recycling or disposal).

Certain directives require EU MSs to establish incident reporting requirements at the national level concerning environmental damage.

• Under the ELD, operators that are engaged in certain regulated activities are required to notify the competent MS authority if they cause environmental damage or pose an imminent threat of damage. Additionally, the ELD grants individuals and non-governmental organisations the right to report environmental damage or impending threats to designated public authorities.
• Under the IED, industrial installations are required to promptly inform the national authority of any emissions, incidents or accidents related to air and water pollution.
• Under the Seveso III Directive (2012/18/EU), operators of installations containing specified quantities of hazardous substances, as outlined in Annex I of the Directive, must report major accidents, including those with the potential to significantly impact the environment.

The Aarhus Convention, implemented in the EU through the Aarhus Regulation ((EC) No 1367/2006) and the Access to Environmental Information Directive (2003/4/EC), safeguards citizens’ rights to access environmental information from public authorities and bodies. This framework imposes an obligation on EU Institutions and MSs to provide public access to environmental information upon request, with some exceptions. “Community institution or body” is defined in the Aarhus Regulation as “any public institution, body, office or agency established by, or on the basis of, the Treaty…”.

A public authority under the Directive shall mean:

“(a) government or other public administration, including public advisory bodies, at national, regional or local level;

(b) any natural or legal person performing public administrative functions under national law, including specific duties, activities or services in relation to the environment; and

(c) any natural or legal person having public responsibilities or functions, or providing public services, relating to the environment under the control of a body or person falling within (a) or (b).”

MSs may provide that this definition shall not include bodies or institutions when acting in a judicial or legislative capacity. If their constitutional provisions at the date of adoption of this Directive make no provision for a review procedure within the meaning of Article 6, MSs may exclude those bodies or institutions from that definition.

European citizens and legal entities also have the right to access documents, including those containing environmental information, that are held by EU institutions in any format (paper, electronic, audio, video) via the conditions set in Regulation (EC) 1049/2001. Additionally, the public may obtain environmental information from EU centralised and public accessible registries, such as the European Pollutant Release and Transfer Register (Regulation (EC) No 166/2006) containing specific information on emissions, pollutant releases and waste transfers.

The NFRD, adopted in 2014, initially required large EU public interest entities (PIE) to report on ESG issues on their annual reports. The NFRD has been replaced and expanded by the CSRD, which came into force on 6 January 2023. CSRD reporting requirements will be introduced with staggered effective dates, depending on the type of entity, beginning in the fiscal year 2024. EU MSs must implement the CSRD into national law by 6 July 2024.

On the companies that are caught by the CSRD, see 6.2 Reporting Requirements and 7.6 Environmental Audits.

In-scope companies must report using the ESRS, with five standards requiring disclosures on environmental information, as material to the company:

• climate change;
• pollution (air, water, soil);
• water and marine resources;
• ecosystems; and
• resource use and circular economy.

The CSRD ties into Article 8 of the EU Taxonomy Regulation by requiring companies to disclose essential performance metrics for all six environmental objectives of the Taxonomy. CSRD reports must be featured in a dedicated section of management reports and come with a statement of assurance of an authorised firm.

Some EU MSs have introduced national regulations requiring companies to conduct sustainability due diligence to address adverse human rights and environmental impacts. If the CSDDD proposal is adopted, these requirements may be harmonised at the EU level.

Since 2018, the EU has been developing a comprehensive set of measures to promote sustainable finance. The foundations of the EU sustainable finance framework are:

• the EU Taxonomy: this common classification system identifies economic activities that significantly contribute to the EU’s climate and environmental objectives, featuring minimum social and human rights safeguards;
• a set of disclosure and reporting rules: namely, the NFRD, the CSRD, and the Sustainable Finance Disclosure Regulation (SFDR), which mandates that EU financial market participants, such as financial advisers, investment firms and insurance providers, report on sustainability factors and their integration into decision-making processes; and
• a range of tools and standards: including Climate Benchmarks, the International Platform on Sustainable Finance, and the forthcoming EU Green Bond Standard, anticipated to be finalised in 2023, which will provide a voluntary framework for issuers to demonstrate their commitment to funding environmentally sound projects that align with the EU Taxonomy.

Environmental due diligence for M&A and other transactions is standard practice, but its specifics depend on national environmental regulations and legislation on company law and financial markets at the MS level.

Disclosure of environmental information is regulated at MS level.

See 7.2 Environmental Taxes.

Disputes can exist between operators/traders and MS enforcement authorities when non-compliance is established or suspected with regard to various EU environmental legislation, as transposed into domestic law. If an operator/trader wishes to dispute the imposition of, for example, a penalty/fine, it will normally have the opportunity to do so via national courts. Those disputes can be referred to the CJEU on a reference under Article 267 TFEU where there is an issue concerning either the interpretation or validity of the EU law at issue.

Where disputes exist between private parties, the laws of the court of the MS in which the dispute arises apply.

There will also be decisions taken by EU authorities, for example, under the REACH Regulation, which concern an individual operator/trader in such a way that they may challenge the validity of that decision directly before the CJEU under Article 263 TFEU. Should an operator/trader suffer damage because of an EU act, they may also seek damages from the institution concerned under Articles 268 and 340 TFEU.

The myriad of recent EU legislation, combined with the multitude of national legislation, creates issues of legal certainty and presents a significant challenge for compliance with environmental laws. This hotchpotch is complicated by the choice of EU legal instrument (either a Regulation which aims to ensure harmonisation across the EU or a Directive which leads to disharmonised laws across the MSs) and its legal basis: either the environmental legal basis, which again allows for MS divergence, or the internal market basis, which ensures more harmonisation.

Given the lofty and commendable aims of the Green Deal, a simplification of EU environmental law through use of Regulations in place of Directives, and through the internal market legal basis over the environmental legal basis, would help with legal certainty and therefore compliance efforts.