Court of Justice of the European Union (CJEU)

This report provides an overview of the most important judgments delivered by the CJEU in the field of environmental law this year. The CJEU provided clarifications regarding matters of environmental protection in relation to agricultural activities, liability for the violation of EU environmental protection rules, public access to environmental information, environmental impact assessment and habitat protection, and state aid measures relevant for the EU’s green transition policy.

(1) Environmental Protection in the Context of Agricultural Activities

Two significant CJEU judgments addressed the impact of agricultural activities on the environment. In Case C-688/21, the CJEU clarified the conditions for exempting plant varieties obtained through mutagenesis techniques from the requirements of EC Directive 2001/18 on the Deliberate Release into the Environment of Genetically Modified Organisms (GMO Directive). In Case C-162/21, the CJEU ruled on the prohibition of pesticides presenting risks for bees.

(A) Exemption of Organisms Obtained through In Vitro Mutagenesis from the Scope of EU Rules on the Release into the Environment of Genetically Modified Organisms

In accordance with the precautionary principle, the GMO Directive sets out rules to protect human health and the environment. These rules include, among others, requirements for environmental impact assessment, prior notification and authorisation, and labelling of GMOs. Following a preliminary reference, the CJEU ruled in 2018 that only organisms obtained by techniques/methods of mutagenesis that have been conventionally used and have a long safety record are excluded from the scope of the GMO Directive (judgment of 25 July 2018, Case C-528/16, Confédération paysanne and Others, ECLI:EU:C:2018:583). To comply with this ruling, the French government sent to the European Commission a draft decree excluding in vitro random mutagenesis from the list of exempted techniques, given that this particular application of random mutagenesis was principally developed after the adoption of the GMO Directive. The commission, however, concluded that it was not justified to make such a distinction between in vivo and in vitro random mutagenesis techniques. The need for another preliminary ruling by the French Council of State thus arose to determine whether and how the GMO Directive is to be implemented in this regard.

In its judgment of 7 February in Case C-688/21 (Confédération paysanne and Others, ECLI:EU:C:2023:75), the Grand Chamber of the CJEU clarified that organisms obtained through in vitro random mutagenesis can be exempted from the scope of the GMO Directive. The CJEU acknowledged that the release into the environment of organisms obtained through a novel technique/method of mutagenesis that has not undergone a risk assessment procedure may entail negative effects on human health and the environment. However, the objective of the GMO Directive to prevent such effects does not require that any modification of the conventionally used technique/method of mutagenesis necessarily comes within the directive’s scope. An overly restrictive interpretation of the exclusions from the scope would make it unnecessarily difficult to adapt and optimize techniques/methods with a long safety record. The CJEU concluded that the fact of applying in vitro the technique/method of random mutagenesis that was initially used in vivo does not entail the application of the GMO Directive. In its assessment, the CJEU took into consideration the fact that several other techniques of genetic modification involving the use of in vitro cultures are also excluded from the scope of the GMO Directive, which shows that the EU legislature did not consider the inherent effects of in vitro cultures relevant as such for the purposes of defining the scope of that directive.

(B) Prohibition of Authorizing Harmful Pesticides in Emergency Situations

EC Regulation 1107/2009 concerning the Placing of Plant Protection Products on the Market (Pesticides Regulation) requires the prior authorization of pesticides. The regulation aims, on the one hand, to ensure a high level of protection of both human and animal health and the environment, and on the other hand, to improve the functioning of the internal market as well as agricultural production.

By way of derogation, in emergency situations, member states can temporarily allow the placing on the market of pesticides not complying with the Pesticides Regulation if it is necessary to contain a danger to plant production or ecosystems. Based on this derogation, the Belgian authorities authorized the sale of certain products for the treatment and coating of seeds, although the outdoor use of seeds treated with pesticides containing the relevant active substance had been expressly prohibited by the commission, on the grounds that this substance constituted high risks for bees.

On a request for preliminary ruling by the Belgian Council of State, on 19 January, the First Chamber of the CJEU held that the emergency derogation in EC Regulation 1107/2009 concerning the Placement of Plant Protection Products on the Market (Pesticides Regulation) does not allow member states to disregard an express prohibition (Case C-162/21, Pesticide Action Network Europe, ECLI:EU:C:2023:30). The case demonstrates the tension between the sometimes conflicting objectives of environmental protection and agricultural productivity. In its analysis, the CJEU stressed that the precautionary principle is one of the bases of the EU’s environmental policy. It also pointed out that the Pesticides Regulation requires member states to promote low pesticide-input pest management, giving, wherever possible, priority to non-chemical methods.

(2) Liability for the Violation of Environmental Rules

Three separate CJEU judgments—two of which were rendered by the Grand Chamber—addressed different aspects of liability for non-compliance with EU environmental protection rules: state liability for health damage caused by a deterioration of the ambient air quality (Case C-61/21), civil liability of car manufacturers for the use of defeat devices reducing the effectiveness of their emission control systems (Case C-100/21), and administrative/criminal fines imposed in the same context to penalize car manufacturers (Case C-27/22).

(A) State Liability for Damage to Health Caused by Excessive Air Pollution

EC Directive 2008/50 on Ambient Air Quality and Cleaner Air for Europe, like the preceding EU directives on the same topic, requires member states to ensure that certain pollutant levels, including for nitrogen dioxides and microparticles, are not exceeded in their territories. Where these limits are nonetheless exceeded, the directive obliges member states to provide for appropriate measures to remedy these exceedances, including by means of air quality plans.

In the judgment of 22 December 2022 (Case C-61/21, Ministre de la Transition Écologique and Premier Ministre, ECLI:EU:C:2022:1015, not covered in the previous edition of the yearbook), the Grand Chamber of the CJEU held that these obligations do not confer rights on individuals but pursue only a general objective of protecting human health and the environment as a whole. Consequently, individuals who suffer health damage due to a deterioration in exceedance of the limit values for pollutants defined in the directive of the ambient air quality in their agglomeration of residence are not entitled, by virtue of EU law, to compensation from the member state responsible for ensuring compliance with these limits.

In contrast to this judgment, Advocate General Kokott argued in favour of individual claims for compensation—not least, in light of previous case law recognizing that individuals affected by an exceedance of pollutant limits must be able to require the competent national authority to draw up an air quality plan (compare judgment of 25 July 2008, Case C-237/07, Janecek, ECLI:EU:C:2008:447). Recent legislative developments at the EU level also point to a strengthening of individual rights to compensation on the grounds of a violation of environmental protection rules. For instance, the new Article 79a of EU Directive 2010/75 on Industrial Emissions (Integrated Pollution and Protection Control) will require member states to ensure that, where damage to human health has occurred because of a violation of mandatory measures to prevent and reduce pollution from industrial activities, the individuals affected have the right to claim compensation from the polluter. The European Commission’s proposal (COM(2022) 542) for a recast of Directive 2008/50 also contains a provision entitling victims of air pollution-related health issues to compensation from the competent authorities.

(B) Liability of Manufacturers for Fitting Vehicles with Defeat Devices

Adding further chapters to the legal follow-up to Volkswagen’s ‘Dieselgate scandal’ and to the use of ‘defeat devices’ by vehicle manufacturers more broadly, the CJEU examined, first, the compensation under national tort law for individual purchasers of vehicles equipped with such devices, and second, the imposition of administrative fines in two member states to sanction the same prohibited use of defeat devices.

(i) Civil Liability under National Tort Law

The EU legislation on type-approval of motor vehicles with respect to emissions aims to ensure a high level of environmental protection. To obtain type-approval, manufacturers must ensure that tailpipe and evaporative emissions of their vehicles are effectively limited throughout their normal life under normal conditions of use. The use of defeat devices—elements of design reducing the effectiveness of the vehicle’s emission control system according to parameters such as temperature or speed—is, in principle, prohibited by EC Regulation 715/2007 on Type Approval of Motor Vehicles with respect to Emissions from Light Passenger and Commercial Vehicles (Euro 5 and Euro 6) and on Access to Vehicle Repair and Maintenance Information.

In a seminal judgment of 21 March (Case C-100/21, Mercedes-Benz Group, ECLI:EU:C:2023:229), the Grand Chamber of the CJEU clarified that the relevant EU type-approval rules protect the specific interests of the individual purchaser of a motor vehicle vis-à-vis the manufacturer, where that vehicle is equipped with a prohibited defeat device. In the case at issue in the main proceedings, the defeat device took the form of an engine programming software that reduced the exhaust gas recirculation rate when outside temperatures were below a certain threshold (‘temperature window’), resulting in an increase in nitrogen oxide emissions.

The CJEU stressed that the prohibition of the use of defeat devices is intended to limit emissions of gaseous pollutants and thus to contribute to the objective of ensuring a high level of environmental protection. In this context, the obligation on vehicle manufacturers to provide the purchaser with emissions figures is intended to enable individual purchasing decisions to be based on precise information as to the extent to which vehicles are polluting.

The judgment has significant implications for the civil liability of vehicle manufacturers under German law. It can trigger the application of paragraph 823(2) of the German Civil Code, which obliges any person who negligently infringes upon law intended to protect another person to compensate that other person for the resulting damage. Purchasers of vehicles equipped with a prohibited defeat device will, thus, no longer have to establish, in accordance with previous national case law, that the manufacturer has intentionally, and ‘in a manner offending common decency,’ inflicted damage on them. This higher threshold was very difficult to meet for purchasers because manufacturers had the benefit of legal uncertainty in regard to the legality of applying a ‘temperature window,’ given that such defeat devices may serve to prevent wear and tear.

Manufacturers’ liability risk is limited by the fact that national courts are entitled, according to the CJEU, to ensure that the compensation of purchasers does not result in unjust enrichment—namely, by off-setting the benefit derived from the use of the vehicle.

(ii) Administrative Fines: Ne bis in idem

Case C-27/22, Volkswagen Group Italia and Volkswagen, provided the CJEU with the opportunity to assess the imposition of cumulative administrative fines in separate EU member states to sanction Volkswagen’s use of defeat devices intended to distort the measurements of pollutant emissions in the context of type-approval procedures. The competent German Public Prosecutor’s Office imposed a fine of €1 billion on Volkswagen in June 2018. This fine became final and was paid while an appeal by Volkswagen was pending, before the Italian administrative courts, against a separate fine of €5 million, which had been imposed earlier by the Italian Competition Authority, in respect of the same facts, for unfair commercial practices.

Upon request by the Italian Council of State, the CJEU held, in its judgment of 14 September (ECLI:EU:C:2023:663), that administrative penalties constitute criminal penalties for the purposes of the principle ne bis in idem enshrined in Article 50 of the EU’s Charter of Fundamental Rights, if they have a punitive purpose and a sufficient degree of severity. This principle applied to the fine imposed in Italy even though it pre-dated the criminal conviction in Germany, because the former had not acquired the force of res judicata when the latter became final.

In accordance with Article 52(1) of the Charter of Fundamental Rights, a limitation of the application of the principle ne bis in idem may be made if a duplication of proceedings was strictly necessary, which requires that the two sets of proceedings be conducted in a sufficiently coordinated manner. In this respect, the CJEU found that while the German Public Prosecutor’s Office appears to have tried to coordinate within the framework of the EU Agency for Criminal Justice Cooperation to avoid a duplication of criminal proceedings against Volkswagen in several member states, the Italian Competition Authority did not participate in that attempt. Consequently, the conditions for disapplying the principle ne bis in idem were not fulfilled.

(3) Public Access to Environmental Information

In accordance with the Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters (Aarhus Convention), EC Directive 2003/4 on Public Access to Environmental Information requires member states to ensure that public authorities holding such information make it available to any applicant. Requests for environmental information may be refused only in certain exceptional cases specified in the directive.

In its judgment of 23 November in case C-84/22 (Case C-84/22, Right to Know, ECLI:EU:C:2023:910), the CJEU considered several points of law raised by the High Court of Ireland in relation to a request for access to any records of discussions within the Irish Cabinet between 2002 and 2016 regarding Ireland’s greenhouse gas emissions.

The CJEU provided guidance on the scope of two exceptions to the right of access to environmental information: requests concerning internal communications and requests for information, the disclosure of which would adversely affect the confidentiality of the proceedings of public authorities, where such confidentiality is provided for by law. The delineation between these exceptions was decisive in the main proceedings, because pursuant to Directive 2003/4, access to ‘information on emissions into the environment’ may not be refused on the grounds of the latter exception, whereas the exception of ‘internal communications’ may extend to such information.

The CJEU reiterated the principle that the disclosure of environmental information should be the general rule and the exceptions to the right of access should, consequently, be interpreted in a restrictive way, considering the public interest served by disclosure. Next, the CJEU confirmed that records of government discussions can, in principle, fall under the exception for internal communications since such records, first, reflect information exchanged between members of an administration, and second, are not intended to be disclosed to the public. In contrast, the exception based on the protection of confidentiality of ‘proceedings of public authorities’ refers only to the final stages of the decision-making process. While the CJEU left the ultimate assessment of the facts to the referring court, it clarified that the two exceptions under consideration are mutually exclusive—the exception protecting ‘proceedings of public authorities’ constituting a lex specialis to the exception protecting internal communications.

The CJEU also examined whether EU law precludes national law from applying the res judicata principle to certain grounds of challenge alleging an infringement of Directive 2003/4, if those grounds of challenge were rejected by an earlier judgment. Specifically, the question concerned the principle of ‘issue estoppel’ under Irish law, which extends the authority of res judicata beyond the operative part of a judgment to include the grounds of that judgment dealing with issues of fact and law. The CJEU confirmed that EU law does not preclude such a procedural rule, provided it is applied in accordance with the principles of equivalence and effectiveness. However, the national court must exercise any available authority to ensure that, if necessary, the situation is brought back into line with EU legislation.

(6) Environmental Impact Assessment and Habitat Protection

(A) National Legislation Excluding the Need for an Environmental Impact Assessment

Pursuant to EU Directive 2011/92 on the Assessment of the Effects of certain Public and Private Projects on the Environment (EIA Directive), projects likely to have significant effects on the environment must be subject to development consent, which is to be granted only after an assessment of those effects. To determine whether an infrastructure project falls under these requirements, member states may rely on a case-by-case examination and/or set thresholds. In either case, they must consider a set of criteria defined in the directive, including the absorption capacity of the natural environmental. In respect of this criterion, they are to pay particular attention to densely populated areas and landscapes and sites of historical, cultural, or archaeological significance.

When transposing the EIA Directive into national law, Austria required the performance of an environmental impact assessment on multifunctional urban development projects solely when thresholds of land take of at least 15 hectares and a gross floor area of more than 150,000 square metres were attained. No case-by-case assessment was required to take other criteria into consideration.

Based on these provisions, the Vienna City Administration decided that no environmental impact assessment was required for the ‘Heumarkt Neu’ project located in the UN Educational, Scientific and Cultural Organization (UNESCO) World Heritage Site known as ‘Historic Centre of Vienna’—a project including hotel, commercial, residential, and conference premises as well as an ice-skating rink and an underground sports hall. This decision was found void on appeal, and the Austrian Federal Administrative Court considered the transposition of the EIA Directive inadequate.

With respect to the pending parallel application for development consent, the Administrative Court of Vienna referred several questions on the interpretation of the EIA Directive to the CJEU for preliminary ruling (Case C-575/21, WertInvest Hotelbetriebs).

In its judgment of 25 May in Case C-575/12 (ECLI:EU:C:2023:425), the CJEU considered that even a small project may have significant effects on the environment, and recalled that the member state’s legislation must take into account the effect of a project on population and human health, biodiversity, land, soil, water, air and climate, as well as material assets, cultural heritage, and the landscape. By establishing thresholds or criteria that take account only of the dimension of a project, without taking into consideration the criteria identified in the EIA Directive, Austria exceeded its margin of discretion under that directive. Regarding the ‘Heumarkt Neu’ project, the CJEU considered as particularly relevant the project’s location in the central area of a UNESCO World Heritage Site. In an urban environment where space is limited, the relevant thresholds meant that most urban development projects were exempt in advance from the requirement for an environmental impact assessment. Indeed, the Austrian government had already decided to amend its legislation because those thresholds were too high.

Furthermore, the CJEU held that the EIA Directive does not provide the public with a right to participate in the procedure, be it administrative or judicial in nature, to determine whether a project requires an environmental impact assessment. However, the decision adopted at the end of that procedure must be made available to the public and the ‘public concerned’ must be able to challenge its legality.

(B) Screening of Projects under the Habitats Directive and the Environmental Impact Assessment Directive

The CJEU’s judgment of 15 June in Case C-721/21, Eco Advocacy (ECLI:EU:C:2023:477), responds to a preliminary reference by the High Court of Ireland in the context of proceedings concerning the validity of a planning permission for the construction of 320 dwellings close to the designated conservation and special protection areas of River Boyne and Blackwater. First, the CJEU provided clarifications on the possibility for national procedural rules to limit the judicial review under the EIA Directive and EEC Directive 92/43 on the Conservation of Natural Habitats and of Wild Fauna and Flora (Habitats Directive). Second, the CJEU clarified the requirements regarding the statement of reasons to support an administrative decision authorizing a plan or project without an ‘appropriate assessment’ of the implications for a site protected under the Habitats Directive. Third, the CJEU considered the features that may be taken into account to determine whether it is necessary to carry out such an assessment.

The CJEU recalled that while Article 11 of the EIA Directive and Article 9 of the Aarhus Convention require that environmental associations be guaranteed access to an effective and fair review procedure, it is for the domestic legal system to lay down the detailed procedural rules, provided they comply with the principles of equivalence and effectiveness. A procedural rule precluding applicants from relying on any grounds that they have not stated precisely in their application for judicial review, or for which they have not identified the supporting facts or matters, does not make it impossible or excessively difficult in practice to exercise the rights conferred by EU law.

If a national authority decides to authorize a plan or project that is likely to have a significant effect on a site protected under the Habitats Directive without requiring an ‘appropriate assessment’ of the implications for that site, that authority must state the reasons why there was no reasonable scientific doubt as to the possibility that the project could significantly affect the conservation objectives or adversely affect the integrity of that site.

Finally, the CJEU held that in order to determine whether it is necessary to carry out an ‘appropriate assessment,’ account may be taken of the features that have been incorporated into the relevant plan or project as ‘standard features,’ irrespective of any effect on the protected site. It follows from the CJEU’s previous case law that measures intended to avoid or reduce the harmful effects on that site cannot be considered at the screening stage but only at the stage of the appropriate assessment, lest the practical effect of the Habitats Directive be compromised (for example, judgment of 12 April 2018, Case C‑323/17, People over Wind and Sweetman, EU:C:2018:244). In judgment C-721/21, the CJEU nuanced that exclusion, admitting that the constituent elements inherent in a project may be considered at the screening stage even if they have the effect of reducing a project’s harmful effects. The CJEU referred specifically to the features at issue in the main proceedings, which involved the removal of contaminants from surface water run-off through the operation of attenuation storage tanks in conjunction with suitable flow control devices.

(5) State Aid Measures Related to the EU’s Green Transition Policy

In the context of the European Green Deal, the reflection of environmental and climate objectives in state aid policy is of key importance. This year, the CJEU rendered two relevant judgments in that regard concerning access to justice vis-à-vis commission guidelines on state aid measures (joined cases C-73/22 P and 77/22 P) and the assessment of renewable energy support mechanisms under EU state aid rules (joined cases C-702/20 and C-17/21).

(A) Access to Justice and State Aid Guidelines Concerning Emission Allowance Trading and Carbon Leakage

EC Directive 2003/87 Establishing a Scheme for Greenhouse Gas Emissions Allowance Trading within the Community (ETS Directive) encourages member states to adopt financial measures in favour of sectors or subsectors exposed to a genuine risk of carbon leakage due to indirect emission costs in the context of that scheme. Carbon leakage refers to the situation that may occur if, for reasons of costs related to climate policies, businesses transfer production to other countries with laxer emission constraints, potentially resulting in an increase in their total emissions. In 2020, the commission adopted updated guidelines setting out the conditions under which aid measures referred to in the ETS Directive may be considered compatible with the internal market under Article 107(3)(c) of the Treaty on the Functioning of the European Union (TFEU). These guidelines identify the sectors deemed to be exposed to the risk of carbon leakage. In its judgment of 13 July, rendered on appeal in joined cases C-73/22 P and C-77/22 P (Grupa Azoty and Others, ECLI:EU:C:2023:570), the CJEU assessed the admissibility of direct actions against these guidelines. The applicants were undertakings that were active in the nitrogen compounds and fertilizer manufacturing sector, which is not listed in the guidelines and thus does not benefit from the privileged treatment of aid measures under the ETS Directive. According to Advocate General Pikamäe (ECLI:EU:C:2023:157), this CJEU ruling on the possibility of challenging commission guidelines was unprecedented, and, moreover, sensitive because it concerned access to justice at EU level.

The guidelines at issue have potential indirect financial consequences for the applicants, due to member states channelling aid for indirect emission costs only to sectors listed in these guidelines. While the CJEU acknowledged that the applicants’ chances of obtaining aid are reduced, it confirmed that such effects cannot convey locus standi for challenging the guidelines directly. Pursuant to Article 263 of the TFEU, the admissibility of direct actions against EU legal acts not directly addressed to the applicants depends on whether they are directly concerned by those acts. This requires that the applicants’ legal situation is directly affected, and the challenged act leaves no discretion as to its implementation. In the case at hand, the CJEU found that these restrictive admissibility conditions were not met, as there is nothing in the EU emission trading scheme that prevents member states from notifying aid for indirect emission costs to the commission for undertakings in an economic sector not referred to in the guidelines. Indeed, by means of such guidelines, the commission imposes only a limit on the exercise of its own discretion in assessing the compatibility of state aid. It remains obliged to examine the specific exceptional circumstances under which a member state may request the direct application of Article 107(3) of the TFEU. Based on these considerations, the CJEU upheld the orders of the General Court, dismissing the actions for annulment as inadmissible.

(B) Legislation Entitling Renewable Energy Producers to Higher Than Market Prices – Concepts of State Aid and Granting of Aid

In its Grand Chamber judgment of 12 January in joined Cases C-702/20 and C-17/21 (DOBELES HES, ECLI:EU:C:2023:1), the CJEU consolidated its case law on the conditions under which a national measure allowing producers of electricity from renewable energy sources to receive a higher tariff may be classified as ‘state aid’ within the meaning of Article 107(1) of the TFEU. The judgment was rendered on a request for preliminary ruling by the Latvian Supreme Court in the context of an action for damages brought by Latvian operators of hydroelectric power plants, who considered that the regulatory authority had failed to increase the price—corresponding to twice the average electricity sale price—at which they were entitled to sell their surplus electricity to the distribution undertaking.

The CJEU recalled that a national measure constitutes an intervention ‘through state resources’—one of the necessary conditions for being considered state aid—if the funds to which renewable energy producers are entitled derive from compulsory contributions imposed by the legislation and are managed and apportioned in accordance with that legislation. This is not only the case if the funds are financed by a levy or other compulsory surcharges but it is also sufficient that the sums constantly remain under public control, and therefore available to the national authorities. The CJEU found that this was the case under the legislation at issue, as the additional cost represented by the purchase of electricity generated from renewable sources at a higher-than-market price was financed by a compulsory surcharge borne by all end-users in proportion to their consumption. These funds were collected, managed, and apportioned by a state-owned company that was obliged by law to use them for offsetting the higher prices paid to the producers.

In the same judgment, the CJEU clarified a number of additional issues of state aid law, concerning: first, the relevance of market liberalization for the assessment of national measures; second, the question whether damages paid in compensation of harm can constitute state aid; third, whether a court decision granting a request for damages ought to be considered as a grant of state aid; fourth, de minimis aid; and fifth, the delineation between ‘new aid’ and ‘existing aid.’ As the CJEU’s findings on these questions do not pertain specifically to environmental law, they are not described in this contribution.

The views expressed are solely the author’s. They do not purport to reflect a position of the European Commission.