As a small and densely populated country and a member of the European Union, the Netherlands has a comprehensive and well-established regulatory framework governing environmental protection.

The Environment and Planning Act (Omgevingswet – EPA) will enter into force in 2024, ushering in a new era in Dutch environmental law. The EPA is intended to (gradually) replace the currently applicable environmental law framework, with the aim of creating one integrated framework.

The EPA replaces most of the Dutch environmental regulatory framework, with an exception being that part of the Environmental Management Act (Wet milieubeheer – EMA) will remain in effect. The EPA contains generally applicable regulations and minimum standards for a large variety of environmental aspects, such as air pollution, noise hindrance, emission rights and waste management, as well as a more procedural framework in respect of the issuing of permits and/or other public law consents. In addition, the EPA will serve as a statutory basis for several lower environmental decrees and regulations, including the Environmental Activities Decree (Besluit activiteiten leefomgeving).

The Environmental Activities Decree stipulates general rules with regard to environmentally sensitive activities (milieubelastende activiteiten), covering virtually all relevant environmental aspects (eg, noise limits, air emission standards and odour limits). General rules under the Environmental Activities Decree apply to all businesses performing certain activities.

Under the Environmental Activities Decree, a permitting regime applies to environmentally sensitive activities with a more substantial impact. If granted, an environmental permit will include a set of company-specific regulations that will apply in addition to the general rules applicable under the Environmental Activities Decree. Generally speaking, companies requiring a permit for their operations should comply with the best available techniques stipulated in the European Best Available Techniques reference documents (BREFS).

For less environmentally sensitive activities, a notification obligation may apply, and customised provisions could be imposed in addition to the aforementioned general regulations on a case-by-case basis.

Other lower decrees of note include:

• the Environment and Planning Decree (Omgevingsbesluit), which contains procedural rules and rules about general topics on protecting and using the physical environment;
• the Environmental Quality Decree (Besluit kwaliteit leefomgeving), which contains rules on the quality of the physical environment and the performance of tasks and authorities; and
• the Environmental Buildings Decree (Besluit bouwwerken leefomgeving), which contains rules on technical aspects of buildings and structures.

Since the Administrative Jurisdiction Division of the Council of State annulled the so-called Programmatic Approach to Nitrogen (Programmatische Aanpak Stikstof – PAS) in 2019, nitrogen deposition onto Natura 2000 areas has become an increasingly important aspect of the Dutch permit-granting process. Initiators are now once more required to establish upfront that a project does not have significant negative effects for Natura 2000 areas. If this cannot be demonstrated based on nitrogen deposition calculations, a nature permit requirement will apply. Such permit might be very difficult to obtain given the high levels of nitrogen deposition affecting Dutch Natura 2000 areas in the Netherlands.

In the Netherlands, environmental policy and enforcement are applied on both local and national levels. Local governments such as municipalities, provinces and water authorities grant permits and enforce them for environmental topics such as odour, noise, environment (municipalities), nature, large facilities, and soil (provinces) and water management and quality (water authorities). Regional environmental agencies (omgevingsdiensten) are often instructed to carry out supervisory and enforcement-related tasks on behalf of these authorities.

Furthermore, competent authorities are appointed on a national level with respect to certain topics. The key regulatory authorities in that respect are as follows.

• The Living Environment and Transportation Inspectorate (Inspectie Leefomgeving en Transport – ILT) has a supervisory role in the field of transport, waste and chemicals. It is competent to decide on permits for high-risk water discharges, and to receive notifications of the transport of waste on the basis of the European Waste Shipment Regulation.
• The Dutch Emissions Authority (Nederlandse Emissie Autoriteit – NEA) has a supervisory role in the context of the climate and the reduction of CO₂. It is competent to grant emission permits and to supervise the EU emissions trading scheme and renewable fuel regulations.
• Other national supervisory authorities are also active on specific topics, such as occupational safety (the Netherlands Labour Authority/Nederlandse Arbeidsinspectie – NLA), mining (State Supervision of Mines/Staatstoezicht op de Mijnen – SodM), radiation (the Nuclear Safety and Radiation Authority/Autoriteit Nucleaire Veiligheid en Stralingsbescherming), and pesticides and biocides (the Food and Consumer Product Safety Authority/Nederlandse Voedsel- en Warenautoriteit – NVWA).

All national supervisory authorities operate under the name and instruction of the competent ministry.

Co-operation between administrative bodies is a central aspect of legislative changes introduced under the EPA. Before making a decision, an administrative body has to take into account the duties and powers of other administrative bodies and, if necessary, co-ordinate with them, with the aim of providing a “one-stop shop” as much as possible. Further rules on the co-operation of different administrative bodies are contained in the Environmental and Planning Regulation (Omgevingsregeling), which includes rules on exchanging information.

Under the EPA, the protection of all environmental assets in the Netherlands has been catered for in a single act. The EPA contains a general duty of care pursuant to which both administrative bodies and residents in the Netherlands bear responsibility for a safe and healthy physical environment.

Specific rules will apply under the EPA for nearly all environmental assets. For instance, the EPA contains a comprehensive framework for all activities that may negatively impact the quality of surface waters. Furthermore, it contains the framework for the protection of soil and groundwater quality, including a general duty of care pursuant to which a party causing spills or leakages is, in principle, obliged to remediate any resulting soil and groundwater pollution. Similarly, the EPA contains rules for limiting air and odour emissions.

The protection of flora, fauna, natural habitats and landscapes flows from EU regulations, the Birds Directive and the Habitats Directive. Where required, these have been codified in the EPA.

Please see 4. Environmental Incidents and Permits regarding administrative and criminal enforcement actions available to the regulatory authorities.

The power of regulatory authorities is generally governed by the General Administrative Law Act (Algemene wet bestuursrecht) and in specific legislation where additional powers are granted. Supervisory authorities in the Netherlands have quite extensive investigative and access powers to carry out their tasks, generally including rights to:

• access business locations (whether accompanied by the police or not);
• obtain business-related data and documents (unless legally privileged);
• obtain information, verbally or in writing; and
• investigate objects and take samples.

Investigations may take place unannounced. Following an inspection, an inspection report or an official report is usually drafted and sent to the site operator. The use of investigative powers must be proportional to the scope of the alleged violation.

When confronted with investigations, there is a legal obligation to co-operate with the relevant authority, provided that the authorities safeguard against self-incrimination in respect of will-dependent material (such as explanations) if such authority intends to impose a punitive sanction (such as a criminal sanction or administrative fine). The validity/lawfulness of investigative actions could (only) be challenged in proceedings against any actual enforcement measures.

In general, the environmental regulatory framework – as primarily stipulated in the EPA – will apply to all economical or comparable human activities of any substance that fall within the definition of an environmentally harmful activity (milieubelastende activiteit), as listed in the Environmental Activities Decree. Additional rules may apply on the local level, although local rules may not be more stringent than the applicable national framework under the EPA and the Environmental Activities Decree.

Within the categories of activities that are governed by the environmental regulatory framework, only those activities with a more substantial environmental impact are required to operate under an environmental permit. The environmental permit for these activities can pertain to commencing a new activity, or to relevant subsequent changes to (parts of) such activities. Where an activity is not subject to a permit requirement, a notification obligation and general rules may still apply; certain local regulations as listed in the zoning plan may also apply.

If necessary, an environmental permit to perform a new environmentally harmful activity, or to alter such activities, is applied for by submitting a permit application to the competent authorities.

Under the EPA, most permits are set to be handled within a statutory decision period of eight weeks, which can be extended for a further six weeks. This is, however, not a fatal term.

In some cases, the so-called “extended preparatory procedure” applies, which has a statutory decision period of six months. Again, there are no direct legal consequences if the authorities do not comply with this period.

Under the regular procedure, the decision will be published, and third parties and/or the applicant can initiate objection proceedings against this decision within six weeks of publication. If the extended procedure applies, formal views can be submitted against a draft version of the permit within a six-week period. Parties having a legitimate interest (generally those experiencing some form of consequences from the relevant permit) can subsequently appeal a permit once issued. Depending on the contents of the permit, such appeals can be lodged with a first instance court or a specific higher appellate court (which will generally be the Administrative jurisdiction division of the Council of State).

Please see 4.1 Investigative and Access Powers and 5.1 Key Types of Liability.

The basic premise under the EPA is that permits are linked to a specific property or activity (zaaksgebonden). The EPA holds that the entity performing the activity at that location is the entity to which the permit pertains. A change in permit holder needs to be notified to the competent authority in writing four weeks prior to the change occurring.

In the event of a breach of an environmental approval/permit, Dutch law provides for three types of potential administrative enforcement measures:

• an administrative fine (administratieve boete);
• an order subject to a penalty (last onder dwangsom); and
• direct enforcement by the authorities (bestuursdwang).

In the event of a breach of environmental laws, in most cases the authority will impose an order subject to a penalty fine. That way, the offender is given the opportunity to end the breach itself within a certain period of time in order to avoid a fine.

Depending on the severity of the matter, a competent authority might (also) take far-reaching actions such as shutting down an operation and/or revoking or amending permits (or conditions attached thereto).

Most violations of environmental requirements also qualify as criminal offences under the Economic Offences Act. Therefore, the Public Prosecution Service (Openbaar Ministerie) is the main competent authority to carry out enforcement tasks from a criminal law perspective.

In general, there are objections to the cumulation of sanctions of a punitive nature. For example, it is not permitted to impose an administrative fine if criminal action is already being pursued for the same conduct. However, restorative and punitive sanctions may, in principle, cumulate and apply to the same conduct, although the severity of the administrative measure must be taken into account when determining the extent of the punitive sanction.

Please also see 4.1 Investigative and Access Powers and 5.1 Key Types of Liability.

Under Dutch law, environmental issues are primarily administrative matters. Administrative liability can lead to sanctions and measures being imposed by a Dutch regulatory authority. Administrative sanctions can be divided into punitive sanctions (administrative fine) and remedial sanctions (administrative enforcement order and order subject to a penalty fine).

Secondly, both the company and its de facto manager(s) (feitelijk leidinggevende(n)) might be liable under criminal law as most environmental violations (also) qualify as “economic offences”. If committed with intent or as a result of wilful misconduct, such offences qualify as a crime (misdrijf); if committed without intent, they constitute (mere) criminal infringements (overtredingen). In short, the offender could face a fine, community service (taakstraf) or even imprisonment, with more severe punishments being applicable to crimes. Please note that the administrative and criminal enforcement can coincide under certain circumstances.

Thirdly, civil liability plays a role when an environmental breach causes an unlawful act towards a third party – eg, in the case of harmful pollution or hindrance. Civil liability could lead to the obligation to pay damages to the aggrieved party.

An obligation to notify the relevant competent authorities of any incidents might apply, pursuant to permit conditions. There is no general obligation to report each and every (possible) incident. However, a notification duty does apply in the event of calamities if such calamities could result in significant negative consequences for the physical environment.

Non-disclosure or incomplete disclosure may be enforced through either administrative or criminal enforcement measures; please see 4.1 Investigative and Access Powers and 5.1 Key Types of Liability. Note that protection from self-incrimination only applies in the event of potential criminal enforcement measures, and such protection would not remove the notification duty in respect of the aforementioned calamities.

If an order subject to penalty is imposed by an authority, that authority can decide that this measure will automatically apply to a possible legal successor if a legal basis for this approach is present (which is the case in the General Environmental Permitting Act, for example). As a result, the legal successor faces the risk of having to pay a penalty.

In the event of soil pollution, an authority could order a party to investigate or remediate the pollution. Generally speaking, this party will also carry the costs of the remediation. In most cases, this party is the owner of a polluted property or land, but it could also be the leaseholder. However, this does not have to be the party that caused the pollution. Recourse against the party that did cause the pollution may be possible on the basis of civil law or the purchase agreement.

As the new owner of real estate or land could face such enforcement measures, environmental topics are typically addressed as part of due diligence processes and, if needed, addressed in transaction documentation either by way of warranties or specific indemnities if particular risks would be identified.

Civil Liability

On the basis of Article 3:310 of the Dutch Civil Code, in conjunction with Article 6:175, the expiry date for a legal claim for compensation of damages or a contractual fine as a result of pollution of the air, water or soil is five years. This period commences the day following the day on which the aggrieved party became aware of (i) the damage or the enforceability of the claim and (ii) the identity of the party liable for the damage. Regardless of these conditions being fulfilled, the claim expires 30 years after the incident in any case.

Criminal Enforcement

The expiration of the period during which criminal enforcement is possible depends on the maximum sentence of that violation. For environmental offences/crimes, this means that the expiry period varies, but will expire 12 years after the violation at the latest.

Administrative Enforcement

The power to enforce an illegal situation does not “expire” after a specific period of time. In principle, administrative bodies will maintain their power to impose enforcement measures on an offender. In many cases, a new owner of a property can be qualified as an offender.

Please see 5.2 Disclosure, 7.5 ESG Requirements and 7.6 Environmental Audits.

Depending on the scope of the activities conducted, certain reporting obligations may apply, such as filing an annual report on environmental aspects of the business pursuant to the European Pollutant Release and Transfer Register Directive, or on implemented energy saving measures.

Please see 6.1 Liability for Historical Environmental Incidents or Damage regarding the different types of liability under Dutch law.

If faced with one of these liabilities, the key defences, limits and conditions to such liability are as follows:

• expiration periods in civil and criminal law (verjaring);
• in the case of criminal liability, an argument that the offender did not deliberately commit the offence (in light of the distinction between infringements and crimes);
• in the case of civil liability, an argument that there is no causal relation between the unlawful act and this damage; and
• in the case of administrative liability:
1. a challenge of the lawfulness of the manner in which the authority exercised its powers;
2. a challenge of the evidence of the offence or incident; or
3. an argument that the enforcement is disproportionate to the interests that it serves.

Aside from the above, the main discussions will often focus on (challenging) the relevant facts and circumstances and the legal qualification thereof.

General civil liability is assumed for any person causing damages through a breach of environmental law. This general liability is supplemented in specific legislation related to specific topics, such as asbestos, soil contamination or hazardous substances.

No specific rules apply for corporate entities. With respect to administrative or criminal fines, the type and size of the violator can be relevant, as the proportionality of the punishment can be connected to the size/entity of a company (eg, big corporations are subject to higher fines than a shopkeeper acting on their own).

Please see 19.1 Green Taxes for a general overview of environmental taxes in the Netherlands.

There are certain tax incentives that allow for an additional deduction of up to 45% if an investment is made in certain qualifying energy or environmentally friendly assets. The qualifying assets are listed exhaustively each year on specific lists. Accelerated depreciation is also possible for specific assets. To qualify for the deduction or accelerated depreciation, the investment should be notified to the Netherlands Enterprise Agency (Rijksdienst voor Ondernemend Nederland) within three months of being made.

The Netherlands also has a significant production subsidy scheme (the SDE++ subsidy) for the stimulation of sustainable energy production and the reduction of greenhouse gas (GHG) emissions.

As a general principle, shareholders or a parent company cannot be held liable for environmental damage or breaches of environmental law of the violating company in which they have a share and/or their subsidiaries as such, unless the shareholder/parent company qualifies as the “de facto manager” in charge of the actual violation. This may be the case for a single or majority shareholder who is also the executive/statutory director of the violating company.

A factual manager (ie, a natural person who does not have to be a statutory director or executive) can be held liable (next to the violating company itself) if it was responsible for a breach, where it had the means and opportunity to prevent the breach from occurring but the breach occurred nonetheless. It is a relatively high standard and is not often successfully demonstrated in court by a public prosecutor.

In recent years, EU sustainability legislation has been put in place which will become increasingly relevant. In particular, the EU Corporate Sustainability Reporting Directive (CSRD) entered into force on 5 January 2023 and is currently being implemented by the EU member states, and the EU Corporate Sustainability Due Diligence Directive (CSDDD) is currently still under negotiation by the EU legislative bodies.

In summary, the CSRD requires the inclusion of a sustainability report in the management report. This sustainability report must be included in a distinct section of the management report and must be clearly identified as such. The information provided in that section must cover the sustainability impacts from two perspectives, also known as the double materiality perspective. The CSRD requires in-scope undertakings to report on the effects of their operations on the environment and society (inside-out), and also on how sustainability issues impact their business (outside-in). As such, both the risks of, and impacts on, the undertaking are considered from a materiality perspective. In addition, the reporting is not limited solely to the sustainability of the company itself, but also includes the sustainability of the value chain of which the company is a part. All undertakings falling within the scope of the CSRD will be required to report on a broad collection of ESG topics set out in the European Sustainability Reporting Standards, a uniform set of reporting standards. The sustainability reporting requirements introduced by the CSRD will be phased in for the financial years 2024 to 2028, alongside micro, small, medium-sized and large companies.

On 17 October 2023, the European Commission adopted a Delegated Directive to adjust the monetary size criteria (balance sheet and net turnover) for micro, small, medium-sized and large companies by at least 25%, thereby reducing the number of companies subject to full reporting obligations. Consequently, fewer companies will become subject to related legislation, such as the CSRD.

The CSDDD requires in-scope companies to implement certain processes throughout their value chains in line with ESG criteria. The extent of the obligations under the CSDDD are subject to the current negotiations by the EU legislative bodies, but may include:

• conducting risk-based human rights and environmental due diligence;
• adopting a climate change action plan; and
• the introduction of directors’ duties in respect of monitoring of and compliance with the foregoing.

The scope of the CSDDD is also subject to the current negotiations, but the scope as originally proposed by the European Commission would be limited to (very) large companies.

Under Sections 3.84 and 5.1.5 of the Environmental Activities Decree, entities are obliged to carry out an energy audit once every four years and to submit such audit report to the Netherlands Enterprise Agency (Rijksdienst voor Ondernemend Nederland).

However, many companies voluntarily opt for certification of their management systems, for instance under International Environmental Management System standards (ISO 14001).

Aside from the above, environmental permits often contain conditions in relation to monitoring and reporting.

Please also see 7.5 ESG Requirements and 17.3 Corporate Disclosure Requirement.

Statutory directors can be held liable for the proper performance of their duties and for the general course of affairs. A director who is culpable of a serious imputable act in relation to the performance of their duties as a director can be held liable next to the company itself. It is, however, a high threshold more commonly invoked in matters relating to corporate law and statutory governance or bankruptcy.

As stated in 7.4 Shareholder or Parent Company Liability, a de facto manager (a natural person who does not have to be a statutory director or executive) can be held liable (next to the company itself) if it was, in short, responsible for the prevention of a breach where it had the means and opportunity to prevent the breach from occurring. It is a relatively high standard and is not often successfully demonstrated in court by a public prosecutor.

The fines are not different for a specific violation, but as “de facto managers” are always natural persons, they would generally be subjected to lower fines (compared to companies qualifying as offenders).

The company (or its directors and/or officers) can take out a directors and officers (D&O) insurance policy providing coverage for liabilities based on acts and omissions committed or omitted by the directors and officers. However, depending on the insurer and the policy, D&O insurance may exclude claims resulting from or based on, inter alia, the actual, alleged or threatened disposal, emission or escape of environmental contamination substances.

Furthermore, exclusions may apply with respect to penalties for the breach of environmental law.

There is no compulsory environmental insurance by law.

However, it is possible to take out environmental damages insurance covering the financial risks of environmental damage, such as surface water or soil contamination. Environmental damages insurance generally does not cover damages relating to underground storage tanks.

Generally, lenders will not be liable for the borrower’s environmental actions or property, unless factual management is present, or such is explicitly agreed upon.

If the lender would have to step in on the borrower’s position (eg, ownership of land or a company), the associated liabilities connected to such position might (and often will) be transferred, such as liability relating to soil contamination or permit compliance (for aspects of the environment, water, safety, etc).

The lender should (and typically will) refrain from exercising control or influence over the day-to-day management decisions relating to environmental aspects.

Apart from contract liability, civil claims for compensation in environmental-related cases are generally tort-based. Typically, compensation can be awarded in the event of unlawful nuisance or violation of a permit causing damages to third parties, and based on a certain duty of care arising from specific environmental legislation (eg, relating to soil protection) or even an “unwritten” duty of care. For instance, in Dutch case law, the liability of the Dutch state has been accepted based on its duty of care to take adequate measures to protect its citizens from the consequences of climate change. The Dutch Civil Code further provides a basis for the strict civil liability of professional users and custodians of hazardous substances, as well as dumpsite and mine work operators.

The concepts of exemplary or punitive damages are unknown under Dutch law, so cannot be awarded by courts.

The Netherlands has been at the forefront of collective redress in Europe since the early 1990s. On 1 January 2020, the Act on Collective Damages in Class Actions (WAMCA) entered into effect. Class actions filed after the WAMCA took effect can relate to monetary damages (allegedly) caused by events on or after 15 November 2016.

A class action can be litigated through the competent Dutch civil court. The same rules apply for all class actions, regardless of whether monetary relief is sought and the legal grounds for damages. As a starting point, the judgment in a class action is binding on all Dutch residents that fall within the scope of the claim organisation, with the exception of those residents that opted out.

A landmark case that is expected to set an important precedent within other countries is the Urgenda case (also known as the “Climate Case”), in which a class action resulted in both the District Court and the Court of Appeal of The Hague holding the Dutch state liable for not taking adequate measures to protect its citizens from the consequences of climate change. The courts ordered that the Dutch state should take additional measures to further reduce the emission of GHGs in the Netherlands by at least 25% compared to 1990, before the end of 2020. This order was confirmed by the Dutch Supreme Court.

Another landmark case in the private sector is the Shell case. On 26 May 2021, the Hague District Court ordered Shell (previously: Royal Dutch Shell), both directly and via its group companies, to limit its CO₂ emissions by at least net 45% by the end of 2030, relative to 2019 levels. The Court concluded that Shell is obliged to ensure through the Shell group's corporate policy that the CO₂ emissions of the Shell group, its suppliers and its customers are reduced. This follows from the unwritten standard of care applicable to Shell. In this respect, Shell has an “obligation of result” with respect to the Shell group's CO₂ emissions and a material “best-efforts obligation” in respect of its suppliers and customers. Shell appealed, and a judgment of the Court of Appeal is not expected until 2024.

Generally, under Dutch law, civil liability for damages and breaches of law can be limited by means of indemnities and other contractual arrangements between parties, such as buyers and sellers. Indemnities and other contractual arrangements between parties do not affect the parties’ liability vis-à-vis regulatory authorities.

Environmental liability insurance is offered for corporate liability issues. Such insurance is additional to the general corporate liability insurance that frequently excludes or limits these types of risks.

Please also see 9.1 Environmental Insurance.

Upon its entry into force, the EPA will be the main act governing Dutch soil protection. However, the preceding legal framework will remain relevant during the transition to the new framework.

Under the EPA and preceding soil protection legislation, the contaminator can be held responsible for the remediation of a contamination. In cases where the contamination was caused prior to 1987, remediation is only required in the event of severe and urgent contamination. New contaminations as of 1 January 2024 will be fully governed by the EPA.

Remediation has to be notified to the competent authority. In the case of substantial remediation works, the competent authority has to approve the remediation plan, the evaluation report and, if applicable, the aftercare plan. The competent authority has the possibility to impose remediation orders (depending on the type, size and urgency of the remediation). Co-ordinated approaches are also possible when a contamination covers a wider area (with multiple owners).

In relation to soil/groundwater contamination of certain industrial sites requiring remediation, the owner as such can be held responsible (at the discretion of the competent authority) for the remediation, as an alternative to the actual polluter. In practice, however, authorities will only go after the owner if the actual polluter is no longer in sight.

Please see 13.1 Key Laws Governing Contaminated Land.

Although it is possible to contractually allocate the responsibility for remediation of contaminated land to another party, such contractual allocation pursuant to a contract does not achieve the same effect under administrative law.

In cases of multiple polluters, liability will have to be assessed on a case-by-case basis. The general duty of care in respect of soil and groundwater applies in any event: whichever party directly caused contamination can be held responsible for soil contamination, and so can all parties that are competent and capable to prevent or mitigate a violation of the general duty of care. Depending on the actual circumstances of the matter, polluters might be held jointly liable, or such liability might be attributed on a pro rata basis if their respective contributions to pollution could be substantiated.

Interested parties may request enforcement from the competent authorities if they suspect soil contamination. Upon such enforcement request, the competent authority will need to investigate whether contamination has taken place.

Under civil law, it may be possible to claim damages from another party on the basis of tort.

Please see 16. Waste.

Investigations by the competent authorities can take place ex officio, may follow from self-reporting (pursuant to an incident), or may take place pursuant to an enforcement request by a third party.

Key Policies

The Netherlands is a member of multiple international treaties regarding climate change, including the Climate Agreement as presented at the Climate Conference of Paris in 2015. The key policies in the Netherlands regarding climate change mainly derive from the objectives set out in the Climate Agreement of Paris, including the goal to keep anthropogenic global warming below 2˚C. With respect thereto, the key national policy aims to reduce the use of energy sources in general (for instance, by making certain energy-saving measures mandatory) and to promote the use of energy derived from renewable energy resources instead of from fossil resources.

Key Principles

The key principles regarding climate change have been laid down in the Climate Agreement, as published by the Dutch government on 28 June 2019, and the Climate Act. The latter Act stipulates that, by 2030, the emission of GHGs must be reduced by at least 49% in comparison with the emission thereof in 1990, and that these gases must be reduced by at least 95% by 2050. However, if other countries participate, the Netherlands wants to raise the EU target to 55% less GHG emissions by 2030.

In both the Urgenda and Shell cases (see 11.4 Landmark Cases), claimants have taken steps to follow up on these rulings, also under threat of further litigation to demand adherence to the respective judgments.

In 2022, the Dutch government presented the new climate policy programme, which targets 60% GHG reduction by 2030 and describes the main lines of policy for the coming years, aimed at the transitions needed for climate neutrality by 2050. In view of the climate goals and the court ruling in the Urgenda case, the government wants to sharply reduce GHG emissions and drive the necessary transitions towards climate neutrality. The policy focuses on making five sectors more sustainable:

• electricity;
• mobility;
• industry;
• the built environment; and
• agriculture and land use.

The government has set a residual emission target for all sectors, which clarifies the maximum amount of emissions each sector can still emit in 2030.

The government also announced an Additional Climate Package (Aanvullend klimaatpakket) on 26 April 2023, which sets out the policies to achieve an additional 22 megaton reduction in GHGs.

Lastly, the EU has established a system of trading with emission allowances (EU ETS), which in the Netherlands has been (and will continue to be) implemented in the EMA. In addition, flanking regulations have been agreed upon at the EU level, which will impose a so-called Carbon Border Adjustment Mechanism (EU CBAM) aimed at addressing the risk of carbon leakage and stimulating the reduction of GHG emissions by non-EU countries. The EU CBAM will function in parallel with the EU ETS, mirroring it to imported goods to ensure equivalent carbon pricing between imported goods and EU-produced goods. Under the EU CBAM, importers will have to buy and surrender a number of EU CBAM certificates corresponding to the embedded emission intensity of their imported products.

Key Laws

A key national law related to climate change is the Climate Act, as discussed above. Furthermore, the Prohibition of Coal in Electricity Production Act (Wet verbod op kolen bij elektriciteitsproductie) was passed at the end of 2019, which prohibits the use of coal as a fuel within electricity-generating facilities. In addition, operators of a facility are obliged to implement all energy-saving measures with a return on investment of up to five years. As of 1 January 2023, office buildings in the Netherlands with a ground floor area exceeding 100 sq m are required to have at least an energy label C to be (or to continue to be) used as such.

As indicated in 14.1 Key Policies, Principles and Laws, Dutch policy and legislation have set out the following targets to reduce GHG emissions within the Netherlands:

• by 2023, at least 16% of all energy that is produced within the Netherlands must derive from renewable resources;
• by 2030, the emission of GHGs within the Netherlands must be reduced by at least 49% in comparison with the emission of GHGs within the Netherlands in 1990;
• by 2030, CO₂ emissions in the Netherlands must be reduced by at least 55%, as a prelude to a climate-neutral Netherlands by 2050; and
• by 2050, the emission of GHGs within the Netherlands must be reduced by at least 95% in comparison with the emission of GHGs within the Netherlands in 1990.

The use of asbestos-containing materials (ACMs) for construction activities has been banned in the Netherlands since 1993. Due to the fact that ACMs were frequently used prior to that date, asbestos is still commonly present in buildings in the Netherlands, especially buildings that were constructed in the 1960s and 1970s. In relation to this ban, the regulatory framework is very much geared towards advancing human health aspects and protecting the general public from the risks associated with ACMs.

However, under Dutch law, there is no obligation to actively remove ACMs that are present in a building, provided that the presence of such ACMs does not entail health and safety risks for the users of the relevant building or for the public in general.

The removal of ACMs will be required in the event of the demolition or (partial) refurbishment of a building containing ACMs. In addition, the removal of asbestos might be required pursuant to the EPA, as noted in 13.1 Key Laws Governing Contaminated Land. In such an event, the Environmental Buildings Decree stipulates strict rules and conditions for such remediation works, including an obligation to carry out an asbestos investigation prior to the envisaged demolition works. Depending on the amount and type of ACMs found (friable/non-friable), removal might only be allowed by engaging a certified asbestos abatement firm. A register is in place that lists all certified asbestos abatement firms.

Apart from the above, the production, import, possession or disposal of ACMs has been prohibited under the Asbestos (Product) Decree (Productenbesluit Asbest), which also provides labelling and packaging requirements for products that are allowed to contain asbestos. Furthermore, strict rules for worker protection have been laid down in the Working Conditions Decree (Arbeidsomstandighedenbesluit), which also applies to the prevention of asbestos-related incidents.

The supervision and enforcement of asbestos-related regulations falls within the authority of either the Human Environment and Transport Inspectorate or the NLA in the event of worker-related potential asbestos contaminations. Non-compliance with the above-mentioned rules and regulations is subject to administrative enforcement measures, as well as penalty fines. Criminal prosecution is also possible for wilful violations resulting in, for example, the death of an employee.

In civil law cases, the statute of limitations is extended to 30 years after a claimant was exposed to ACMs.

Waste legislation is based on the implementation of the European Waste Framework Directive (2008/98/EG), which is (and will continue to be) incorporated in the EMA and elaborated in the national waste management plan. This regulatory framework defines when a product is qualified as waste – ie, “any substance or object which the holder discards or intends or is required to discard”.

The EMA contains several prohibitions and regulations, such as a ban on the unauthorised discarding of waste and regulations pertaining to handing over, receiving, transporting and collecting hazardous waste and industrial waste. In short, waste may only be transferred by a discharger/producer to a party that is qualified (registered or permitted) to accept and/or transport waste. The minister, municipalities and provinces can grant exemptions from some of these prohibitions and regulations, if permitted by law.

The Environmental Activities Decree qualifies several forms of waste management as environmentally harmful activities, for which different regulations apply.

In general, the party that disposes of the waste is responsible for the transfer to a qualified person, and for filing (and storing) the required waste transfer forms. If this is not done correctly, enforcement actions can be taken for not disposing of waste in accordance with the law.

The operator of a site or facility that disposes of waste (the producer or importer) has to comply with administrative obligations. The operator of the site or facility needs to specify the following:

• from which type of business or person they accept waste, insofar as is relevant for the acceptance and control thereof;
• which requirements they set for offering waste;
• how they inspect the waste before receipt (mostly visual); and
• how waste that deviates in an environmental hygienically relevant way from what is usual for the category concerned is treated.

The operator of such site or facility is responsible for complying with these acceptance and control procedures. The form on which this is documented must be kept for five years.

Specific regulations apply to recycling schemes where a producer of products that will undoubtedly lead to waste (glass bottles, plastic bottles, electronics) will have to take further actions, such as imposing a fee on the consumer or attribution to a recycling system.

There is no general obligation for a producer of waste to choose a specific type of waste processing (recycling, recovering or re-using). However, there are specific product-related regulations that prescribe participation in a take-back system or recycle scheme – examples include batteries, some electronic appliances, some types of packaging and car tyres.

Please see 5.2 Disclosure, 6.2 Reporting Requirements, 7.5 ESG Requirements and 7.6 Environmental Audits.

Under the Open Government Act (Wet Open Overheid – WOO), information held by public bodies will (have to) be provided if it is requested in a so-called WOO request, unless an exception as provided for in the WOO applies.

These exceptions include that the disclosure of this information would:

• release confidential business and manufacturing data;
• infringe the private lives of one or more individuals; or
• result in the disproportionate favouring of certain involved parties.

With respect to environmental information, the WOO applies a specific regime that ensures a wider disclosure regime compared to other information concerning administrative matters (following from the Aarhus Convention). The WOO contains restrictions for environmental information in terms of applying the statutory grounds for refusal, including that absolute and relative grounds for exception do not apply to emissions data.

Article 2:391 of the Dutch Civil Code states that corporations should include an analysis of their non-financial performance in their annual report, such as their performance regarding the environment. This obligation is further regulated in the decree on the publication of non-financial information (Besluit bekendmaking niet-financiële informatie).

This decree states, amongst other things, that legal entities that meet certain conditions (such as having more than 500 employees) are required to publish a non-financial clarification, which includes information on the policy, the applied due care procedures and the results thereof concerning, for example, environmental matters.

If the corporation involved does not have any policies with respect to the environment, its annual report should state the reason for not having such policies.

Please also see 7.5 ESG Requirements.

There are no mandatory green financing arrangements or monitoring thereof for commercial transactions, but the majority of Dutch banks now offer green and sustainability-linked loans to borrowers looking to finance a green project or make their operations more sustainable. This increased offering has been facilitated by the publication of principles and guidelines for green and sustainability-linked loans by the Loan Markets Association (LMA), particularly its recent publication of model provisions for sustainability-linked loans in leveraged acquisition finance transactions, which has helped to standardise the drafting and use of green provisions in standard loan documentation. It is worth noting, however, that these LMA principles and guidelines are a form of self-regulation, intended only as recommendations and leaving it to finance parties to freely choose whether and to what extent to adopt these recommendations.

Green loans and sustainability-linked loans are the main types of green loan products. Green loans are any type of loan instrument made exclusively available to finance new and/or existing eligible green projects. No uniform definition exists for what can be considered an eligible green project, but the LMA offers a non-exhaustive list in its Green Loan Principles that are considered to qualify for a green loan. The “use of proceeds” in a green loan is the fundamental characteristic of this loan product, and contrasts with sustainability-linked loans, which focus instead on a borrower’s performance.

A sustainability-linked loan is any kind of loan instrument that incentivises a borrower’s achievement of ambitious, predetermined sustainability performance targets (SPTs), measured according to pre-defined key performance indicators that measure improvements in the borrower’s sustainability profile. Incentivising better sustainability performance comes from aligning the loan terms with the borrower’s performance on meeting its SPTs, often through decreases (or increases) in the margin.

In transactions where shares or assets in real estate and companies are transferred, vendor due diligence is usually performed.

For real estate transactions (depending on the deal), both zoning and permit review is usual, focusing on property-related aspects such as zoning compliance, building requirements and fire safety. Depending on the asset or share transfer of the property, a different review might be performed.

For M&A transactions (and, to a lesser extent, finance deals), environmental due diligence is performed on aspects of compliance and permits for health, safety and environment aspects. An increasingly applied mechanism in M&A transaction is a warranty and indemnity insurance that also covers most of the environmental aspects (although usually excluding soil aspects).

Depending on the target (and its environmental activities) and the character of the deal (asset or share), several environmental aspects can and often will be reviewed, such as:

• the presence of and compliance with permits and approvals;
• the enforcement actions completed, pending or announced;
• site-related aspects (zoning, soil, asbestos, occupational safety, etc); and
• production-related aspects (chemicals, product safety, reporting requirements, etc).

A seller is not generally required to disclose any environmental information to a purchaser, although there might be a duty to disclose information that is specifically requested by a potential purchaser. Once a purchaser explicitly indicates that it is interested in particular information (eg, relating to the environment), the seller is obliged to provide that information (to a reasonable extent), to prevent themselves being liable for misinforming the purchaser.

In the Netherlands, several types of taxes are in place in order to meet the objectives set out in the Dutch climate policy and legislation. These taxes generally aim to discourage the use of (energy) resources.

Taxes on Energy

Users of natural (compressed) gas pay energy tax for every cubic metre of natural (compressed) gas used. Users of electricity pay energy tax for every kWh used. Energy taxes are charged by the energy suppliers, which in turn pay the energy taxes to the tax authorities. It is possible to claim back energy taxes under certain conditions, such as if the natural (compressed) gas or electricity is used to generate electricity.

A tax reduction applies to the natural (compressed) gas or electricity that is necessary to fulfil the basic needs of the user. Furthermore, an exemption applies for legal entities and natural persons who generate electricity for their own use by means of renewable sources.

Taxes on Greenhouse Gases

A GHG tax was introduced in the Netherlands on 1 January 2021, with all sites that fall under the European Emissions Trading System (EU ETS) being subject to such tax. Waste incineration plants and industrial businesses emitting significant volumes of nitrous oxide are also affected by this tax. The carbon tax does not apply to certain applications, such as the capture and storage of CO₂. As part of the Tax Plan 2023, the part of the emissions that are currently exempt will be reduced, meaning that industrial businesses that emit too much CO₂ will pay more taxes than they currently do.

Taxes on Tap Water

In the Netherlands, taxes apply to the use of tap water for the first 300 cubic metres used. These taxes are charged by the water suppliers, which in turn pay the taxes to the tax authority.

Taxes on Waste

Companies in the Netherlands with a waste incinerator must pay waste tax of EUR33.58 for every 1,000 kg of incinerated waste, and must report the total amount of incinerated waste to the tax authorities in their yearly tax return declaration. Companies transporting their waste to foreign countries to have it dumped or incinerated also face taxes. In that way, an equal system applies to all waste that was produced in the Netherlands, regardless of where it will be processed. With these taxes, the government encourages businesses to recycle materials instead of incinerating them.

Flight Taxes

Since 1 January 2021, a national flight tax applies to all individual passengers departing from a Dutch airport. The flight tax currently amounts to EUR26.43 per flight, with the aim of encouraging individuals to make environment-conscious decisions, and to enhance sustainability in the aviation sector by reducing the CO₂ deposition. Transfer passengers are currently exempt from the flight tax.

Municipal and Other Local Taxes

Municipalities and (local) water authorities generally also levy certain waste and water taxes, the rate and base of which differ per municipality and local water authority.

Administrative proceedings on environmental disputes are resolved pursuant to the mechanics of the General Administrative Law Act (Algemene wet bestuursrecht), with decisions of the competent authorities generally being open to objection and appeal.

Since a major overhaul of Dutch environment and planning law has recently taken place, no additional reforms are currently necessary. One possible change would be to revert to the previously applicable lex silencio positivo, under which certain permits would be issued by operation of law if a competent authority does not make a decision prior to the applicable decision period lapsing. Aside from that, legislative action – but mostly concrete (policy) measures – are required where it comes to decreasing nitrogen deposition on Natura 2000 areas, as the current levels create challenges for a wide variety of operational activities and projects.