I INTRODUCTION

This is an overview of Dutch environmental law, including climate change legislation, highlights, trends and recent developments that are of importance when doing business in the Netherlands. The focus is on environmental laws applicable to operating industrial sites (facilities), but Dutch environmental legislation covers a much broader range of activities and products. This chapter, therefore, is an introduction only, and is limited to the European part of the Kingdom of the Netherlands (historically, certain island territories in the Caribbean form part of the Netherlands).

The Netherlands is a small, densely populated country and a Member State of the European Union. It is home to one of the largest port and petrochemical areas in Europe, and is one of the world's largest exporters of food and agricultural products. The Netherlands has a flat geography, a significant part of which is below sea level, and hosts a relatively large number of wetlands.

The Netherlands has a well-established system of environmental laws that is often perceived as detailed and complex. Further, the Netherlands has a well-established system of inspections and enforcement, as is discussed in greater detail below.

The Dutch government has a tradition of being a frontrunner in respect of environmental protection within the European Union. In implementing EU laws, the Dutch legislator often used to go beyond the level of protection agreed on a communal level. Recently, however, the Dutch legislator seems keener on directly transposing EU requirements without introducing additional national requirements. Nonetheless, the Dutch government still has high policy ambitions in respect of various environmental topics, including climate change, the circular economy and promoting sustainability, including wind power.

The scope and complexity of current environmental laws have triggered what is the largest system reform of Dutch environmental laws to date. This legislative project is ongoing, and aims for a full integration of virtually all environmental acts, including legislation on zoning and planning, and on nature protection, into a single Environment and Planning Act (Omgevingswet). Although the Act has been adopted by the Dutch parliament, the entire system reform is not expected to be completed before 2021 (the anticipated date of entry into force of the Act currently being 1 January 2021). The future Environment and Planning Act will have a significant impact on the environmental laws that apply to industrial facilities.

II LEGISLATIVE FRAMEWORK

The primary source of environmental law is the Dutch Environmental Management Act (EMA). The EMA contains an extensive set of rules with regard to various environmental topics, such as waste management, environmental impact assessment, greenhouse gas emission allowance trading, noise ceilings, air quality standards, etc. The EMA also serves as the legal framework for setting more detailed rules by order in council and ministerial decree, and numerous of such orders and decrees have been adopted under the EMA over time. In addition, the EMA describes the roles of municipal, provincial and national authorities in respect of environmental management.

Under the EMA, general environmental rules for facilities have been set in the Dutch Decree containing general rules for the regulation of facilities in the interest of protecting the environment (the Activities Decree). All facilities in the Netherlands (e.g., factories and offices buildings) are subject to the Activities Decree, which covers basically any environmental topic (noise, air emissions, soil, etc.). Inter alia, the Activities Decree prescribes that a zero base soil survey is conducted before starting operations (and requires that the soil is brought back to these conditions if the facility is shut down). Further general rules include air emission limit values and maximum noise and odour limits, as well as mandatory energy saving measures.

In addition to the general rules that apply under the Activities Decree, designated facilities – referred to in the Netherlands as 'Type C'-facilities – also require an environmental operating permit. These include facilities under the scope of the EU Integrated Pollution Prevention and Control (IPPC) regime (EU Directive 2010/75/EU on industrial emissions (integrated pollution prevention and control (IPPC facilities)) and other facilities that are deemed to have a significant impact on the environment and have been designated as such. Permit conditions attached to environmental operating permits must be based upon the best available techniques, as detailed in reference documents. These include reference documents available on an EU level, commonly referred to as 'best available technique reference documents'. The issuance of permits, including procedural rules, legal redress and enforcement action, is governed by the Act containing general provisions on environmental permitting (WABO). Supplemental – mostly procedural – requirements apply under the General Administrative Law Act.

The WABO forms the legal basis for also permitting various other activities (than operating a facility), such as building activities, deviating from a municipal zoning plan, activities that involve designated monuments, etc.

Various other environmental laws apply in the Netherlands, such as the Nature Protection Act that provides the legal regime for protecting flora and fauna, Natura 2000 areas and the Dutch forests. Other acts include, for instance, the Soil Protection Act (SPA) and the Water Act. The latter Act provides for a dedicated permitting regime for, inter alia, activities that may adversely impact the surface water quality (e.g., discharges of wastewater) or groundwater (e.g., groundwater extraction), and activities within water works (e.g., the construction and operation of an offshore wind farm). The Dutch Building Decree, the Asbestos Removal Decree and the Labour Conditions Decree contain rules on the management, maximum exposure to, and (sometimes mandatory) removal of asbestos.

III THE REGULATORS

Who the regulator is in respect of environmental matters depends on the matter involved. In respect of facilities, in principle, the municipality in which a facility is located is the authority empowered to issue permits or take enforcement action. In some cases, this power resides with the province instead. This, more specifically, concerns facilities that are in scope of the Dutch Risks of Major Accidents Decree 2015 and designated IPPC facilities. Under very specific circumstances, the Minister for Infrastructure and Water Management (the Minister) is the competent authority.

In other matters, who the regulator is may vary. For instance, in matters concerning nature protection, powers in principle reside with the province, while in product stewardship matters powers often reside at a national level.

Day-to-day handling of environmental matters on a municipal and provincial level takes place by regional environmental bodies, acting on behalf of the authority. These government bodies consist of environmental experts who issue permits, carry out inspections and take enforcement action on behalf of multiple municipal and provincial authorities. Only a limited number of dedicated regional environmental bodies deal with (external) safety issues. In 2016, legislation was adopted aimed at enhancing the quality of permit issuance, inspections and enforcement action, inter alia, requiring all authorities involved, including criminal authorities, to share information with each other.

At the national level, inspections and enforcement are carried out by the Human Environment and Transport Inspectorate (ILT), acting on behalf of the Minister or State Secretary for Infrastructure and Water Management. Other national inspectorate bodies and departments may be involved as well.

A violation of environmental law may also be considered a criminal offence and may therefore be investigated by the police and criminally prosecuted by the Public Prosecutor, which is discussed below.

IV ENFORCEMENT

Under Dutch environmental law, scope for enforcement, including in respect of general rules and permit conditions, exists under both administrative and criminal law. In addition, anyone incurring damages as a result of the infringement may seek an injunction or compensation of damages under civil law.

i Administrative law enforcement

Enforcement under administrative law is primarily aimed at undoing the violation and preventing new violations from occurring, while criminal proceedings are aimed at imposing a punitive sanction. The most common administrative law sanctions are an order under administrative coercion and an order under penalty payment. In the case of an order under administrative coercion, the government will remedy the violation at the expense of the violator, often after expiry of a mandatory grace period. In the case of an order under penalty payment, a penalty is forfeited for the duration that the violation continues to exist after the grace period. No maximum amount applies in respect of the order under penalty payment, but the penalty must be proportionate, yet effective. Further administrative sanctions include withdrawal of the environmental operating permit, which is usually seen as a last resort measure, while in designated cases an administrative fine may be imposed (e.g., for certain violations in respect of the Emissions Trading Scheme). A recent trend under environmental law is the broader introduction of such administrative fines. For instance, the Nature Protection Act allows for imposing administrative fines in respect of certain violations. It is anticipated that under the future Environment and Planning Act, administrative fines will become a common sanction in environmental law.

The authorities may take enforcement action ex officio, or upon request by a third party, including a competitor. Violations must in principle be enforced. Exceptions may include if legalisation is imminent (e.g., the authority is about to issue a permit that takes away the violation), or if enforcement action is deemed disproportionate, which is rarely the case. Also, immediate enforcement action may not be taken where the authority's own, reasonable policy dictates otherwise, for instance stipulating that a warning letter is sent first. Dutch authorities often send warning letters, and in most cases a draft version of the sanction decision must be sent first, allowing the addressee to submit its views on the intended sanction.

If a violation is tolerated, this should in principle take the form of a formal decision to tolerate, imposing a deadline and conditions that mitigate the impact of the violation. The Council of State recently ruled that such formal decision does not qualify as a decision that can be appealed with an administrative judge.2 In practice, however, occasionally no enforcement action will be taken without a formal decision to tolerate. A general trend is, however, that authorities are more stringent when it comes to inspections and taking enforcement action. In this respect, almost all authorities have adopted a nationwide enforcement strategy, which provides for a uniform approach to environmental violations.

ii Criminal law enforcement

The Public Prosecutor's Office is charged with enforcement pursuant to criminal law. Both legal entities and natural persons may be prosecuted for criminal offences. A legal entity can be held criminally liable for any criminal act that can be attributed to it. Whether an offence can be attributed to a legal entity will depend on the specific circumstances, including on whether the offence is within the normal activities of the legal entity and whether the legal entity exercised control over the offence. Officers of the company can also be held criminally liable when they have given factual directions regarding the event. Examples would include if the individual did not take measures to prevent the offence, even though he or she had the authority and reasonable duty to do so. In a decision of April 2016, the Supreme Court reconfirmed and clarified the position regarding criminal liability of the individual who has given factual directions regarding the offence.3

Most violations of specific environmental laws and regulations have been designated as criminal offences. The Dutch Penal Code also provides for a number of general environmental offences, including a prohibition on bringing a hazardous substance in the soil, air or surface water, and a duty for operators of industrial plants to take reasonable measures to prevent or limit danger to health or the environment when producing or making available substances, preparations or GMOs.

iii Civil law enforcement

Civil law is rarely applied to achieve enforcement objectives, though the authorities may also file civil law claims against polluters if no administrative law instruments are available. Anyone incurring damages as a result of a violation of a statutory duty, a property right, or an unwritten duty of proper social conduct that can also be regarded as a fault, can seek an injunction or compensation of damages under civil law from the perpetrator. A related application of civil law to force government to take action to achieve policy objectives is the Urgenda litigation, referred to in Section VII.iv. Meanwhile, the Netherlands has also been held liable for a failure to achieve air quality standards (see Section VI.i).

V REPORTING AND DISCLOSURE

Typically, permit conditions will require the permit holder to report the facility's emissions to the competent authorities on a frequent basis (monthly, quarterly, etc.). Similar reporting requirements apply under the Activities Decree in respect of the general rules set. Also, companies participating in the EU Emissions Trading System (ETS) must report on their emissions annually, in the form of a verified emissions report. Whereas such reporting requirements concern the normal business operations, additional requirements apply to specific events, the main requirements of which are as follows.

Under the EMA, unforeseen incidents that occur within a facility and that have, or threaten to have, a negative impact on the environment, must immediately be reported to the authorities. An unforeseen incident is any event that deviates from normal business operations and includes calamities and accidents as well as failures in the production process.

For IPPC facilities, the EMA imposes a similar reporting requirement in the case of any non-compliance with permit conditions and general rules, other than that which is caused by an unforeseen incident.

In addition, under the SPA, anyone conducting or involved in activities that cause soil contamination must immediately report the contamination to the authorities.

Additional reporting regimes are in place in respect of specific activities. For instance, a reporting requirement similar to the requirement under the SPA applies under the Water Act in respect of activities that pollute river banks. Also, a reporting requirement applies under the Act on transport of dangerous substances in the case of accidents or other incidents that may pose a risk to public safety. Further, self-reporting obligations have been imposed by EU product stewardship legislation, such as the Dutch implementing laws for the European Union's Restriction of Hazardous Substances Directive 2011/65/EU, require the manufacturer to inform the authority when he or she has reason to believe that his or her product does not comply and poses a risk.

There is no specific rule on disclosure of environmental information in transactions. Under the Dutch Civil Code, however, the seller must disclose information, including information that the seller should know may be relevant for the buyer, while the buyer is under obligation to make its own due investigations. Although this depends on the merits of the case (including on the professionalism of the parties involved and what information is available in the public domain already, such as soil contamination registered in the Land Register), typically the seller's disclosure requirement will prevail over the buyer's duty to investigate. The seller is thus likely to be liable for failure to disclose information that was not self-evident. In transactions, it is common for the buyer to require warranties and indemnities for environmental matters from the seller. Usually, this is in itself a driver for the seller to disclose information.

VI ENVIRONMENTAL PROTECTION

i Air quality

Air quality standards are primarily laid down in and on the basis of the EMA. These standards and requirements should be taken into account, inter alia, when determining whether an environmental permit for a facility may be granted. If an application for such permit has been submitted, the application should also include an assessment on whether the activities conducted within a facility do not lead to the exceeding of the applicable quality standards. Air emission standards and related requirements have been set in the Dutch Activities Decree, for instance with respect to combustion plants. The various standards and requirements, inter alia, concern NOx SOx, and particle pollution, but also substances of very high concern.

The air quality standards referred to above also aim to implement the air quality standards set at the European level in Directive 2008/50/EC on ambient air quality and cleaner air for Europe. It has been established that those standards are not being complied with at all locations in the Netherlands. Initially, the District Court in The Hague therefore ordered the Dutch state in injunction proceedings to adopt air quality plans, containing additional measures to comply with the air standards at all locations as soon as possible. This ruling seemed to be in line with previous case law of the European Court of Justice (ECJ).4 The District Court also ordered the state to refrain from taking measures in the meantime that could negatively affect the possibility to comply with the air quality standards as soon as possible.5

However, this ruling has been overruled by the District Court in The Hague in the main proceedings. By a judgment of 27 December 2017, the District Court ruled that the state has discretion in deciding which measures to adopt to ensure compliance with the air quality standards at all locations as soon as possible. According to the District Court, there is no reason to assume that the air quality plans in place do not provide for adequate measures.6 Higher appeal is pending.

In future, the above-discussed rules will be included in the new Environment and Planning Act.

ii Water quality

The water quality regime in the Netherlands is primarily laid down in the Water Act. This Act requires the Minister, in consultation with the Minister of Economic Affairs, to adopt a National Water Plan, as well as the provincial council of each province in the Netherlands to adopt regional water plans. The current National Water Plan refers to the EU Water Framework Directive 2000/60/EC (WFD) and aims to further improve the water quality in line with the WFD. Further to the obligation to adopt a National Water Plan and regional water plans, the Water Act prohibits the discharge of waste water or contaminating or hazardous substances in surface waters, except when the discharge of these substances is allowed for under a water permit or the general rules laid down in the Water Decree.

The water quality standards mentioned in the WFD have been implemented in the Dutch Decree on quality requirements and monitoring for water 2009.

In future, the rules discussed above will be included in the new Environment and Planning Act.

iii Chemicals

Similar standards for the manufacturing, supply and safe use of chemicals apply across the entire European Economic Area. In the Netherlands, as in any EU Member State, Regulation (EC) No. 1907/2006 of the European Parliament and of the Council on the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) has direct application. The aims of REACH include the protection of human health and the environment from the risks that can be posed by chemicals.

REACH establishes procedures for collecting and assessing information on the properties and hazards of substances. Companies need to register their substances and to do this they need to work together with other companies who register the same substance. The European Chemicals Agency, the central regulatory authority that implements REACH, receives and evaluates individual registrations for their compliance.

REACH impacts on a wide range of companies across many sectors, including manufacturers and importers into the European Union. To a limited extent, downstream users may also have some responsibilities under REACH. The specific obligations that companies have depend on the type of products involved (i.e., substances on their own, including metals, mixtures or articles).

In the Netherlands, Bureau REACH performs most tasks pursuant to REACH, including the management of the REACH help desk.7 Enforcement is the responsibility of a cooperation of the Labour Inspectorate, the Food and Consumer Product Safety Authority (NVWA) and the Environmental Protection Agency (ILT).

Other EU regulations on chemicals, such as the Biocidal Products Regulation (Regulation (EU) 528/2012), the Classification, Labelling and Packaging Regulation (CLP Regulation (EC) No. 1272/2008) and the Prior Informed Consent Regulation (PIC Regulation (EU) 649/2012), directly apply in the Netherlands as well.

Dutch companies must observe the national guideline document Publication Series on Dangerous Substances (PGS), setting detailed guidelines on the handling and storage of hazardous substances. These guidelines apply to nearly all industrial facilities, through a reference in the Activities Decree, or in the environmental operating permit.

iv Solid and hazardous waste

Waste storage, transportation and disposal are controlled by a variety of legislation, both at a national and a regional level. Increasingly, there has been a legal emphasis on waste prevention and minimisation.

The EMA is the main Act setting out the obligations in respect of waste management and transportation. It defines the roles of parties involved in the waste processing chain such as the 'disposer', 'transporter' and 'collector' of waste, each having specific rights and obligations. For example, business waste may only be transferred to a permitted waste collector or certified transporter. In addition, the EMA has set a national landfill ban (i.e., landfilling may only occur at designated areas).

Similar to REACH, the EU Waste Transportation Regulation (EC) 1013/2006 applies in the Netherlands (and other EU Member States), setting out the legal requirements for transportation of waste from and to the Netherlands (e.g., transport of dangerous waste needs to be notified).

In future, the above-discussed (national) rules will be included in the new Environment and Planning Act.

Circular economy

The concept of a circular economy – where the value of products, materials and resources is maintained in the economy for as long as possible, and the generation of waste minimised – has been embraced by the Dutch government. The Netherlands positions itself within the European Union as a circular hotspot, and various 'green deals' on circular initiatives have been agreed upon by (semi-) public institutions and commercial parties. Next to these market initiatives, in the summer of 2016, a national policy programme named 'the Netherlands circular in 2050' was presented to the Dutch parliament. Much of the policy initiatives concern waste management and the recovery of raw materials from waste, although the Dutch government is bound to the EU law concept of 'waste'.

Shell case

In respect of the latter, the judgment of the ECJ of 12 December 2013 in the Shell case (Cases C-241/12 and C-242/12) is worth mentioning here.8 This case concerned ultra-light sulphur diesel (ULSD) that was accidentally mixed with methyl tert-butyl ether (MTBE). Because the flashpoint of the mixture was too low for it to be resold as fuel for diesel engines, the mixture was off spec. The District Court in Rotterdam filed a request for a preliminary ruling to the ECJ on the question of whether the mixture could be qualified as waste. Under the EU Waste Framework Directive 2008/98 any substance or object that the holder discards, or intends or is required to discard can be considered as waste. The ECJ ruled that the mixture of ULSD and MTBE did not qualify as waste. According to the ECJ, particular attention must be paid to whether the substance in question is of any use to its holder. If not, the substance constitutes a burden that he or she will seek to discard in a way that is likely to cause harm to the environment. In the present case, however, the mixture of ULSD and MTBE did not constitute a burden. On the contrary, the holder had sent back the mixture with the intention of getting a refund under the sales contract, while the recipient had taken back the mixture with the intention of blending it and placing it back on the market.

The judgment of the ECJ in the Shell case has not gone unnoticed by the Dutch Council of State, the highest administrative judge in the Netherlands. The key factor for the Council of State in determining whether an object or substance can be considered as waste now appears to be whether the object or substance in question constitutes a burden for the holder that he or she will seek to discard in a way that is likely to harm the environment. Based on that factor, the Council of State has ruled, for example, that flux-oil that contained minor contaminations did not qualify as waste.9 The Council of State reached the same conclusion in respect to electric devices returned by customers, even those that should be repaired first to be reused.10 The latter ruling did not seem in line with a previous ruling of the Dutch Supreme Court.11 This triggered the Court of Appeals in The Hague to submit various questions for a preliminary ruling to the ECJ in a similar case.12 On 4 July 2019, the ECJ ruled that returned electronic devices qualify as waste, unless it concerns goods that have become redundant in the seller's product range and that are in their unopened original packaging. According to the ECJ, to prove that malfunctioning appliances do not constitute waste, the holder of the products must demonstrate not only that these products can be reused, but also that their reuse is certain, and ensure that the prior inspections or repairs necessary to that end have been done.13 This ruling implies that the approach adopted by the Council of State in this respect may be too flexible. However, future case law is to be awaited.

v Asbestos

The use of asbestos-containing materials has been prohibited in the Netherlands since July 1993. Notwithstanding this prohibition, there is no general legal requirement to remove asbestos already present in buildings, provided this presence does not impose health risks. Concentration limit values have been set to this end, and are used to determine whether remediation is required (usually in the case of friable asbestos, or in case of demolition and renovation activities). Good practice dictates that all asbestos on site should be identified, labelled and maintained in a good condition (i.e., not in a fibre-releasing state), and management plans are adopted to this end. Having a building used while being aware of a dangerous situation concerning asbestos posing a health risk for the people in that building, may constitute a criminal offence.

It was initially anticipated that, as of 2025, asbestos-containing materials in rooftops would be prohibited. Owing to age, the surface of roofing materials containing asbestos is becoming brittle, slowly releasing asbestos fibres to the environment and therefore creating a health risk. However, on 4 July 2019, the Dutch Senate rejected the proposed ban on asbestos-containing materials in rooftops. Although most political parties seemed to agree with the reasons for introducing a general ban, they also believed that the proposed ban and timing were too rigorous and would lead to significant costs for owners. A proposal by the Dutch government to postpone the entry into force of the ban until 2028 was unsuccessful.

vi Contaminated land

The most important requirements regarding prevention and remediation of contaminated soil and groundwater have been laid down in the SPA. The SPA distinguishes between 'historical' soil and groundwater contamination (caused before 1 January 1987) and 'new' soil and groundwater contamination (caused from 1 January 1987 onward). All new soil contamination must be prevented as far as possible, and in the event that new soil or groundwater contamination occurs nonetheless, all new contamination must in principle be cleaned up. For historical soil contamination, remediation requirements only apply if the authorities deem the soil contamination to be 'severe' and a clean-up urgently required. Whether contamination must be deemed severe contamination is determined by a number of factors, including whether certain limit values (intervention values) are exceeded. The urgency of a clean-up depends on a risk assessment.

Anyone who intends to remediate or move contamination must notify the authorities. Remediation may, in principle, only be carried out in accordance with a remediation plan that has been approved by the authorities. Upon completion of the clean-up, a final report must be issued to the authorities for approval. The authorities will determine whether the clean-up meets the conditions stated in the remediation plan. If the contamination has not been entirely removed, restrictions regarding the use of the soil and 'aftercare' requirements (e.g., monitoring of potential migration) may also be imposed. The authorities may also require remediation prior to redevelopment as a condition of planning permission. In theory, under the SPA, the polluter is primarily responsible for the contamination. However, in addition, the landowner or leaseholder can be held responsible by the authorities, regardless of whether he or she contributed to the contamination. The authorities have discretion in deciding whether to assign responsibility for remediation to either the polluter or the landowner, and in practice, the polluter plays a very limited role in the discussions.

The SPA does not deal with apportioning liability and recourse between the various civil parties that may be held responsible; that should be determined under rules of civil law. A party that is held responsible by the authorities for a remediation under the SPA, or otherwise incurs cost in relation to contamination he or she did not cause, may try to take recourse against the polluter on the basis of tort, or against the party from whom he or she acquired the site. In addition, an owner of a site from which contamination migrates to an adjacent site may be held liable by the owner of the adjacent site, regardless of whether the owner of the site caused the contamination.

In addition to soil contamination remediation obligations, a company may also be faced with requirements regarding the quality of the soil or dredging spoil that is being excavated and repurposed at another location (e.g., following construction works). The Dutch Soil Quality Decree sets out national generic standards regarding soil quality for specific functions that can be adjusted by municipalities and water quality managers to allow for local customisation. These local standards can be more stringent or flexible. In practice, soil contamination can be caused by many substances. In the event no standard has been determined for a substance, the detection limit (i.e., the threshold for detection of a substance) serves as the applicable standard.

One of the relatively new chemicals acknowledged to cause soil contamination are per- and polyfluoralkyl substances (PFAS). PFAS have waterproof features and are used for inter alia household products and aqueous film forming foams for fire fighting. No standard has been determined for PFAS, meaning that the detection limit of 0,1 µg/kg dry soil applies. However, due to the wide spread use of PFAS in the past, levels above the detection limit are found at many locations. As a result, almost all excavated soil and dredged spoil must be considered to be 'contaminated' and cannot be reused without the soil being cleaned first, affecting many construction projects. As a temporary emergency measure, the Dutch Minister for the Environment and Housing has set a temporary standard of 0,8 µg/kg dry soil. In addition, the Minister has announced the introduction of a fast-track procedure for local authorities to set flexible and less stringent local standards for PFAS.

In future, the rules regarding prevention and remediation of contaminated soil and groundwater will be included in the Environment and Planning Act (in the proposed bill for new soil protection legislation, the role of the polluter is even more limited). The focus on the landowner, which is already current practice, will be formalised and the SPA itself will be withdrawn.

vii Nature protection

On 1 January 2017, the new Nature Protection Act entered into force. This Act provides for the legal framework for, inter alia, the protection of protected flora and fauna and of habitats in designated Natura 2000 areas. Under the Nature Protection Act, the killing, disturbing and wounding of protected species is prohibited, unless an exemption has been obtained (or a general exemption applies). In addition, a permit is required for activities that may adversely affect a Natura 2000 area.

With respect to nitrogen depositions, reference must be made to the Integrated Approach to Nitrogen (PAS) that was introduced in the Netherlands in July 2015. The introduction of the PAS was triggered by the strict permitting regime under the previous Nature Protection Act 1998, requiring a permit for every project causing nitrogen depositions onto designated Natura 2000 areas, regardless its size. In principle, such permit can only be issued on the basis of an appropriate assessment for a specific project. Such assessment should confirm that the project would not adversely affect the integrity of the Natura 2000 areas involved. If such effect could not be excluded, a permit could only be issued to the extent that no alternatives are available, that there is an imperative reason of overriding public interest in issuing the permit and that the negative impact is compensated.

By introducing the PAS, the government aimed to facilitate new projects being developed, as their nitrogen depositions would be compensated by measures taken at a national level to reduce the nitrogen deposition onto Natura 2000 area. To that end, the PAS inter alia provided for the allocation of 'nitrogen development space' to projects that negatively impact a Natura 2000 area by means of nitrogen depositions. The available nitrogen development space was, however, limited. A key assumption under the PAS was that nitrogen development space was to be created by restoration measures for Natura 2000 areas and source-directed measures aimed at lowering NOx emissions, resulting in a general (autonomous) reduction of the nitrogen depositions onto such areas.

The PAS was immediately contested in court. In 2017, the Council of State submitted various questions for a preliminary ruling to the ECJ, asking the ECJ whether the PAS violates the European Birds and Habitats Directives (EU Directives 92/43/EEC and 2009/147/EC).14 The ECJ answered these questions in its judgment of 7 November 2018.15 In short, the ECJ ruled that the European Birds and Habitats Directives do not preclude a programmatic approach, provided that a thorough and in-depth examination of the restoration measures and source-directed measures under the PAS makes it possible to ensure that there is no reasonable scientific doubt as to the absence of adverse effects of each plan or project on the integrity of the Natura 2000 areas concerned.

On 29 May 2019, the Council of State ruled that the PAS did not meet the conditions mentioned by the ECJ and declared the PAS to be in violation of EU law and therefore non-binding.16 The exact impact of the judgments is still subject to debate, but may be far-reaching. Following the judgments, a large number of nature permits, based on the PAS, have been annulled. Now that the PAS can no longer be relied upon, the strict permitting regime prior to the PAS applies. As noted above, under said regime, a permit can only be issued on the basis of an appropriate assessment for a specific project. Such assessment must confirm that the project would not adversely affect the integrity of the Natura 2000 areas involved. If such effect could not be excluded, a permit could only be issued to the extent that no alternatives are available, that there is an imperative reason of overriding public interest in issuing the permit, and that the negative impact is compensated.

Although the Council of State emphasised in its judgments that its rulings of 29 July 2019 did not affect the legality of nature protection permits that have already become legally irrevocable, Dutch scholars have argued that it might still be possible to withdraw irrevocable nature protection permits issued under the PAS. The main argument for this is that, now that the PAS has been declared in violation of EU laws, permits issued under the PAS must also be deemed to be in violation of EU laws. However, case law is still being awaited on this.

The aforementioned judgments of the Council of State have attracted fierce attention of the government, parliament and society. The exact impact of the judgments being unclear, the Dutch provinces have decided to no longer issue new nature protection permits, putting many new projects on hold, until a common approach has been agreed upon by all stakeholders involved. To that end, the government has recently introduced legislation to end the current impasse, inter alia, by introducing various measures aimed at lowering NOx emissions, resulting in a reduction of the nitrogen depositions onto Natura 2000 areas and allowing such reduction to be used for new projects. However, given the similarities with the PAS, scholars have questioned whether the new legislation will comply with EU laws. The proposed legislation nonetheless passed the Dutch Senate on 17 December 2019 and it subsequently entered into force on 1 January 2020.

VII CLIMATE CHANGE

In the Netherlands, several laws and other initiatives are in place aimed at reducing greenhouse gas emissions and improving energy efficiency. The number of Acts and measures to reduce greenhouse gas emissions will increase substantially in the near future. In this respect it should be noted that in July 2019, the Dutch government entered into a national Climate Agreement with various stakeholders. The Climate Agreement contains a package of measures in several sectors to reach a 49 per cent emission reduction target in 2030. These measures will be implemented in several (new) acts. The most important measures are described below.

i Energy efficiency

The EU Energy Efficiency Directive 2012/27/EU has been implemented in the Activities Decree. Among others, companies are required to conduct energy audits every four years to identify energy-saving measures that could decrease energy consumption within their businesses. In addition, companies are required to implement all energy-saving measures with a return on investment period of five years or less. Ultimately on 1 July 2019 and every four years thereafter, companies had to inform the competent authorities which energy-saving measures hadbeen implemented in the business. Also, as of 2023, every office building exceeding a floor area of 100 square metres must comply with the requirements of an energy performance certificate label C or higher (labels run from G up to A). If the building does not meet these minimum energy performance requirements, it may no longer be used for office purposes as of 2023.

ii Climate Act

On 1 September 2019 the Dutch Climate Act entered into force. This Act provides a framework for the development of policies aimed at irreversibly and step-by-step reduction of Dutch greenhouse gas emissions to limit global warming and climate change. To achieve this target before 2050, the Climate Act strives to a reduction of greenhouse gas emissions of 49 per cent in 2030 and a full CO2-neutral electricity production in 2050. The Minister of Economic Affairs and Climate Policy is responsible for determining a climate plan for the next 10 years, which contains the main points of the climate policy to be pursued to achieve the aforementioned objectives. The Climate Act also contains a chapter on accountability. Pursuant to the Climate Act, the Netherlands Environmental Assessment Agency issues a climate and energy exploration to the Minister of Economic Affairs and Climate Policy once a year. This is a scientific report on the consequences of climate policy in the previous calendar year and includes at least the greenhouse gas emissions in total and per sector as well as the developments and measures that have had an impact on greenhouse gas emissions. The Netherlands Environmental Assessment Agency issued its first climate and energy exploration in November 2019. This first report estimates that the CO2 reduction in 2030 will be approximately 35 per cent compared to 1990, but the implications of the national Climate Agreement could not be taken into account. In September 2019, the Minister of Economic Affairs and Climate Policy also published its draft climate plan, which has been assessed by the Council of State. According to the Council of State, the draft climate plan contains a strong climate policy, but the Council of State also refers to the aforementioned findings of the Netherlands Environmental Assessment Agency indicating that the Netherlands will not achieve the emission reduction target of 49 per cent in 2030.

iii ETS

As any other EU Member State, the Netherlands participates in the ETS for trading greenhouse gas emission allowances. The Dutch implementing laws are contained in the EMA, and require that listed facilities obtain a separate greenhouse gas emission permit from the Dutch Emissions Authority (NEa). Said permit will not impose emission limits, but instead will set out the framework for the facility's monitoring plan. Participating companies must surrender sufficient allowances to compensate their emissions (of the previous year). In most cases, facilities are eligible for a quantity of free allowances, while further emission allowances may be obtained through auctions or transactions with other parties participating in the ETS. According to the website of the NEa, around 450 companies in the Netherlands participate in the ETS, including industrial sectors and energy companies. The aviation industry has also been a participant in the system since 2012. During the current third phase of the ETS (2013–2020), auctions gradually replace free allocation as the most important method for allocating allowances.

In future, the above-discussed (national) rules will be included in the new Environment and Planning Act.

In this respect, reference must also be made to the Dutch government's intention to introduce a minimum carbon price floor for electricity generation. This proposal for an Act (Wet minimum CO2-prijs elektriciteitsopwekking) is still pending in the Second Chamber of Parliament. The purpose of this Act is that electricity generators would pay an environmental tax, which is equal to the difference between a tariff set in this Act (referred to as the minimum carbon price floor) and the forward rate of the greenhouse gas emission allowance. The minimum carbon price floor will increase from €12.30 per ton in 2020 to €31.90 per ton in 2030.

iv Urgenda case

One of the most remarkable judgments relating to climate change is the landmark judgment of the District Court in The Hague of 24 June 2015.17 This judgment not only caught the attention of the Dutch media, but also that of the foreign media. The District Court in The Hague ruled that the Netherlands must take more action to reduce greenhouse gas emissions. More specifically, the state has to ensure that the Dutch greenhouse gas emissions in the year 2020 will be at least 25 per cent lower than those in 1990. This is the first time that a court has ordered a government to set higher climate change targets. Not surprisingly, the ruling has encountered criticism. According to some scholars, the District Court's ruling violates established case law of the Dutch Supreme Court, holding that a mandatory order to the legislature is fundamentally at odds with the constitutional role of the judiciary and is therefore not possible. Some scholars have even argued that climate change is a political question that should not be addressed in court at all. In September 2015, the Dutch government filed an appeal against the District Court's ruling.

The Court of Appeals in The Hague ruled on the appeal on 9 October 2018.18 It agreed with the District Court that the state must ensure that Dutch greenhouse gas emissions in 2020 will be at least 25 per cent lower than those in 1990. The Court of Appeals therefore upheld the District Court's ruling. This was rather surprising and not expected by many scholars.

The government appealed the judgment of the Court of Appeals of The Hague with the Supreme Court. On 20 December 2019, the Supreme Court rendered its long-awaited judgment and affirmed the judgment of the Court of Appeals. In its judgment, the Supreme Court rejected all arguments brought forward by the government, including the more fundamental argument that the present case should not be decided in court and that an order to reduce greenhouse gas emissions is at odds with the constitutional role of the judiciary. The Supreme Court ruled, in line with the Court of Appeals, that the obligation for the government to take measures against climate change can be derived from the right to life and the right to family life laid down in Article 2 and Article 8 of the European Convention on Human Rights.19

The judgment of the Supreme Court is a landmark ruling that will attract fierce attention among scholars, politicians and the media, and will have a significant impact on government policy and future climate litigation in the Netherlands.

The government has indicated that it intends to comply with the Urgenda ruling and announced a list of measures that should lead to an emission reduction of 25 per cent in 2020. The early closure of one of the coal-fired power plants in 2020 (discussed below) is one of the most prominent measures.

v Offshore Wind Energy Act

An Offshore Wind Energy Act (OWEA) entered into force on 1 July 2015 and provides for a completely new legal framework for the construction and operation of offshore wind farms. The OWEA aims to accelerate and streamline the decisions and authorisations required for an offshore wind farm. In short, the OWEA distinguishes between three stages of decision-making: the designation of areas for the construction of wind farms in the National Water Plan; the adoption of site decisions by the relevant ministers, specifying the exact location and the conditions under which a wind farm can be constructed and operated; and tendering an OWEA permit to a project developer granting the exclusive right to construct and operate the wind farm.

In the meantime the Dutch Ministry of Economic Affairs and Climate Policy completed two tenders for offshore wind farms without a subsidy for the generation of renewable electricity. The government intends to amend the OWEA to organise tenders for granting an OWEA permit, which means that the winner of these tenders will need to pay for acquiring an OWEA permit.

vi Coal Phase Out Act

On 10 December 2019 the Coal Phase Out Act was enacted. The Coal Phase Out Act contains a prohibition on the use of coal for electricity generation. The use of coal for the generation of electricity will be prohibited with immediate effect as of 1 January 2020, provided that the prohibition will only be applicable as from 1 January 2030 for coal-fired power plants with an efficiency of at least 44 per cent. This means that the three newest Dutch coal-fired power plants have a transitional period until 2030 to convert their plants into power plants using a different fuel than coal.

VIII OUTLOOK AND CONCLUSIONS

As indicated, Dutch environmental law is on the eve of the largest system reform to date: the introduction of the Environment and Planning Act and its implementing legislation. Through the Act, the Dutch government aims to combine and simplify the regulations for projects that have an impact on the environment. The Act integrates 26 current acts (including, for instance, the above-mentioned Water Act, but also the Crisis and Recovery Act and legislation on zoning and planning, etc.), reducing 5,000 statutory provisions to 350, 120 orders in council to four, and 120 ministerial decrees to 10. The Act should result in fewer regulations applying to a project and reduce the burden on companies, inter alia, in respect of conducting studies. Moreover, the Act aims for quicker and better decision-making, allowing more room for private initiatives.

The upcoming Environment and Planning Act – which is expected to enter into force on 1 January 2021 – will heavily impact upon Dutch environmental law, and at least in the long term provide for a more streamlined and simplified set of legal requirements. In the short term, this system reform follows relatively shortly after the introduction of the Water Act in 2009 and the WABO in 2010. At that time, these Acts already meant a major shift in Dutch environmental law, and their introduction showed that the day-to-day legal practice requires some time to adapt to new laws and regulations. It is, therefore, likely to take some time before the benefits of the upcoming Environment and Planning Act are truly enjoyed.


Footnotes

1 Marinus Winters is a counsel, and Seppe Stax, Rob van der Hulle, Marjet van Bezooijen and Jasper Strijder are associates at Allen & Overy LLP Amsterdam. The authors thank Jochem Spaans, a former counsel of Allen & Overy LLP, for his input to a prior version of this text.

2 Council of State 24 April 2019, ECLI:NL:RVS:2019:1356.

3 Supreme Court 26 April 2016, ECLI:NL:HR:20163:733.

4 European Court of Justice 19 November 2014, ECLI:EU:C:2014:2382.

5 District Court of The Hague 7 September 2017, ECLI:NL:RBDHA:2017:10171.

6 District Court of The Hague 27 December 2017, ECLI:NL:RBDHA:2017:15380.

8 European Court of Justice 12 December 2013, ECLI:EU:C:2013:821.

9 Council of State, 19 November 2014, ECLI:NL:RVS2014:4130.

10 Council of State 3 February 2016, ECLI:NL:RVS2016:192.

11 Supreme Court 3 December 2013, ECLI:NL:HR:2013:1564.

12 Court of Appeals of The Hague 22 September 2017, ECLI:GHDHA:2017:2815.

13 European Court of Justice 4 July 2019, ECLI:EU:C:2019:564.

14 Council of State 17 May 2017, ECLI:NL:RVS:2017:1259 and ECLI:NL:RVS:2017:1260.

15 European Court of Justice 7 November 2018, ECLI:EU:C:2018:882.

16 Council of State 29 May 2019, ECLI:NL:RVS:2019:1603 and ECLI:NL:RVS:2019:1604.

17 District Court of The Hague 24 June 2015, ECLI:NL:RBDHA:2015:7145.

18 Court of Appeals of The Hague 9 October 2018, ECLI:NL:RBDHA:2015:7145.

19 Supreme Court 18 December 2019, ECLI:NL:HR:2019:2006. See also the advisory opinion of (deputy) Procurator General Langemeijer and Advocate General Wissink 13 September 2019, ECLI:NL:PHR:2019:1026.