CELEX: 62004CJ0486
Failure of a Member State to fulfil obligations
Assessment of the effects of certain projects on the environment
Waste recovery
Installation for the production of electricity by the incineration of combustible materials derived from waste and biomass in Massafra (Taranto)
Directives 75/442/EEC and 85/337/EEC

Grounds
1. By its application, the Commission of the European Communities is seeking a declaration by the Court that:
– by not subjecting the project for the installation in Massafra for the incineration of combustible materials derived from waste (‘CMW’) and of biomass, which is an installation covered by Annex I to Directive 85/337, to the environmental impact assessment procedure, in accordance with Articles 5 to 10 of Council Directive 85/337/EEC of 27 June 1985 on the assessment of the effects of certain public and private projects on the environment (OJ 1985 L 175, p. 40), as amended by Council Directive 97/11/EC of 3 March 1997 (OJ 1997 L 73, p. 5) (‘Directive 85/337’),
– by adopting legislation (Article 3(1) of the Decree of the President of the Council of Ministers of 3 September 1999, entitled ‘Policy and coordination measure amending and completing the earlier policy and coordination measure for the implementation of Article 40(1) of Law No 146 of 22 February 1994 concerning provisions relating to the assessment of environmental impact (GURI No 302 of 27 December 1999, p. 17) (‘the DPCM’), amending Annex A(i) and (l) to the Decree of the President of the Republic of 12 April 1996, entitled ‘Policy and coordination measure for the implementation of Article 40(1) of Law No 146 of 22 February 1994 concerning provisions on the assessment of environmental impact (GURI No 210, p. 28), (‘the DPR’)), which excludes some projects covered by Annex I to Directive 85/337 (projects for installations for the recovery of hazardous waste and of non-hazardous waste with a capacity exceeding 100 tonnes per day) from the environmental impact assessment procedure if authorised by a simplified procedure in accordance with Article 11 of Council Directive 75/442/EEC of 15 July 1975 on waste  (OJ 1975 L 194, p. 39), as amended by Council  Directive 91/156/EEC of 18 March 1991 (OJ 1991 L 78, p. 32) and by Commission Decision 96/350/EC of 24 May 1996 (OJ 1996 L 135, p. 32) (‘Directive 75/442’), and
– by adopting legislation (Article 3(1) of the DPCM, amending Annex A(i) and (l) of the DPR) which, for the purposes of establishing whether or not a project covered by Annex II of  Directive 85/337 must be subject to an assessment of environmental effects, sets an inadequate test, because projects which have a significant effect on the environment can be excluded from that assessment,
the Italian Republic has failed to fulfil its obligations under Articles 2(1) and 4(1), (2) and (3) of Directive 85/337.
Legal context
Community legislation
Directive 75/442
2. Article 1 of Directive 75/442 is worded as folows:
‘For the purposes of this Directive:
(a) “waste” shall mean any substance or object in the categories set out in Annex I which the holder discards or intends or is required to discard.
…
(d) “management” shall mean the collection, transport, recovery and disposal of waste, including the supervision of such operations and after-care of disposal sites;
(e) “disposal” shall mean any of the operations provided for in Annex II, A;
(f) “recovery” shall mean any of the operations provided for in Annex II, B;
…’
3. Under Article 4 of that directive:
‘Member States shall take the necessary measures to ensure that waste is recovered or disposed of without endangering human health and without using processes or methods which could harm the environment, and in particular:
– without risk to water, air, soil and plants and animals,
– without causing a nuisance through noise or odours,
– without adversely affecting the countryside or places of special interest.
– …’
4. Under Article 9(1) of that directive:
‘For the purposes of implementing Articles 4, 5 and 7, any establishment or undertaking which carries out the operations specified in Annex II A must obtain a permit from the competent authority referred to in Article 6.
…’
5. Under Article 10 of the directive:
‘For the purposes of implementing Article 4, any establishment or undertaking which carries out the operations referred to in Annex II B must obtain a permit.’
6. Article 11(1) of Directive 75/442 provides:
‘1. Without prejudice to ... Directive 78/319/EEC ... the following may be exempted from the permit requirement imposed in Article 9 or 10:
…
(b) establishments or undertakings that carry out waste recovery.
This exemption may apply only:
– if the competent authorities have adopted general rules for each type of activity laying down the types and quantities of waste and the conditions under which the activity in question may be exempted from the permit requirements,
and
– if the types or quantities of waste and methods of disposal or recovery are such that the conditions imposed in Article 4 are complied with.’
7. Annex II A to Directive 75/442, entitled ‘Disposal operations’, is intended to list disposal operations such as they occur in practice. It is stated there that, in accordance with Article 4, waste must be disposed of without endangering human health and without the use of processes or methods likely to harm the environment.
8. Annex II B to that directive, entitled ‘Recovery operations’, is intended to list recovery operations as they occur in practice. It is stated there also that, in accordance with Article 4, waste must be recovered without endangering human health and without the use of processes or methods likely to harm the environment.
Directive 85/337
9. Article 1(2) and (3) of Directive 85/337 is worded as follows:
‘2. For the purposes of this Directive:
“project” means:
– the execution of construction works or of other installations or schemes,
– other interventions in the natural surroundings and landscape including those involving the extraction of mineral resources;
“developer” means:
the applicant for authorisation for a private project or the public authority which initiates a project;
“development consent” means:
the decision of the competent authority or authorities which entitles the developer to proceed with the project.
3. The competent authority or authorities shall be that or those which the Member States designate as responsible for performing the duties arising from this Directive.’
10. Under Article 2(1), (2) and (3), first subparagraph, of that directive:
‘1. Member States shall adopt all measures necessary to ensure that, before consent is given, projects likely to have significant effects on the environment by virtue, inter alia, of their nature, size or location are made subject to an assessment with regard to their effects. These projects are defined in Article 4.
2. The environmental impact assessment may be integrated into the existing procedures for consent to projects in the Member States, or, failing this, into other procedures or into procedures to be established to comply with the aims of this Directive.
...
3. Without prejudice to Article 7, Member States may, in exceptional cases, exempt a specific project in whole or in part from the provisions laid down in this Directive.’
11. Article 3 of that directive provides:
‘The environmental impact assessment shall identify, describe and assess in an appropriate manner, in the light of each individual case and in accordance with Articles 4 to 11, the direct and indirect effects of a project on the following factors:
– human beings, fauna and flora;
– soil, water, air, climate and the landscape;
– material assets and the cultural heritage;
– the interaction between the factors mentioned in the first, second and third indents.’
12. Article 4 of the directive provides:
‘1. Subject to Article 2(3), projects listed in Annex I shall be made subject to an assessment in accordance with Articles 5 to 10.
2. Subject to Article 2(3), for projects listed in Annex II, the Member States shall determine through:
(a) a case-by-case examination,
or
(b) thresholds or criteria set by the Member State
whether the project shall be made subject to an assessment in accordance with Articles 5 to 10.
Member States may decide to apply both procedures referred to in (a) and (b).
3. When a case-by-case examination is carried out or thresholds or criteria are set for the purpose of paragraph 2, the relevant selection criteria set out in Annex III shall be taken into account.
4. Member States shall ensure that the determination made by the competent authorities under paragraph 2 is made available to the public.’
13. In point 9 of Annex I to Directive 85/337, reference is made to waste disposal installations for the incineration, chemical treatment as defined in Annex IIA to Directive 75/442 under heading D9, or landfill of hazardous waste (namely, waste to which Council Directive 91/689/EEC of 12 December 1991 on hazardous waste (OJ 1991 L 377, p. 20) applies).
14. Point 10 of Annex I refers to waste disposal installations for the incineration or chemical treatment, as defined in Annex IIA to Directive 75/442/EEC under heading D9, of non-hazardous waste with a capacity exceeding 100 tonnes per day.
15. In point 11(b) of Annex II to Directive 85/337 reference is made to installations for the disposal of waste (projects not included in Annex I).
16. Annex III to that directive lists the selection criteria referred to in Article 4(3):
‘1. Characteristics of projects
The characteristics of projects must be considered having regard, in particular, to:
– the size of the project,
– the cumulation with other projects,
– the use of natural resources,
– the production of waste,
– pollution and nuisances,
– the risk of accidents, having regard in particular to substances or technologies used.
2. Location of projects
The environmental sensitivity of geographical areas likely to be affected by projects must be considered, having regard, in particular, to:
– the existing land use,
– the relative abundance, quality and regenerative capacity of natural resources in the area,
– the absorption capacity of the natural environment, paying particular attention to the following areas:
...
3. Characteristics of the potential impact
The potential significant effects of projects must be considered in relation to criteria set out under 1 and 2 above, and having regard in particular to:
– the extent of the impact (geographical area and size of the affected population),
... ’
National legislation
17. Article 6 of Law No 349 of 8 July 1986 establishing the Ministry of the Environment (GURI No 59, of 15 July 1986) transposed Directive 85/337 into Italian law. Subsequently, Article 40 of Law No 146 of 22 February 1994 concerning provisions on the assessment of environmental impact (ordinary supplement to the GURI No 52 of 4 March 1994) (‘Law No 146/1994’) called on the Italian Government to define, by an express policy and coordination measure, the conditions, criteria and technical standards for the application of the environmental impact assessment procedure to projects covered by Annex II to that directive.
18. The DPR was adopted in order to implement Article 40(1) of Law No 146/1994.
19. Article 1(3) of the DPR states:
‘The projects referred to in Annex A are subject to the environmental impact assessment procedure.’
20. Article 3(1) of the DPCM, which amended the original version of Annex A to the DPR, is worded as follows:
‘In Annex A to the DPR of 12 April 1996, points (i), (l) ... are replaced by the following points:
(i) 	Installations for the disposal and the recovery of hazardous waste through the operations in Annex B and points R1 to R9 of Annex C to Legislative Decree No 22 of 5 February 1997, [“Legislative Decree No 22/1997”], excluding recovery installations subject to the simplified procedures of Articles 31 and 33 of that legislative decree ... .
(l) Installations for the disposal and the recovery of non-hazardous waste, with a capacity exceeding 100 tonnes per day, through the incineration and treatment operations in points D2 and D8 to D11 of Annex B and points R1 to R9 of Annex C to Legislative Decree No 22 [1997], excluding recovery installations subject to the simplified procedures of Articles 31 and 33 of that legislative decree ...’.
21. The provisions of Legislative Decree No 22/1997 which describe the characteristics of waste and the operations for which the simplified procedure may be used were adopted in order to transpose Article 11 of Directive 75/442. Those provisions were the subject of the implementing measures taken under the Decree of the Ministry of the Environment of 5 February 1998 on the identification of non-hazardous waste subject to the simplified recovery procedures as provided for in Articles 31 and 33 of Legislative Decree No 22 of 5 February 1997 (ordinary supplement to the GURI No 88 of 16 April 1998).
Pre-litigation procedure
22. By letters of 22 August and 12 November 2001, the Commission requested  the Italian authorities for information on the application of  the procedures laid down by Directive 85/337 to two industrial installation projects in the Massafra municipality, namely an installation for the production of electricity by the incineration of CMW and biomass and an installation for the preselection of solid urban waste and the production of CMW.
23. The Italian authorities stated that they had excluded the projects at issue from the environmental impact assessment procedure since they fell within the exception referred to in Annex A (l) to the DPR, as amended by Article 3(1) of the DPCM.
24. Having regard to the responses thus provided by the Italian Government, which it found to be unsatisfactory, the Commission initiated the pre-litigation procedure by an initial letter of formal notice of 18 October 2002, supplemented by a letter of 11 July 2003, those letters referring to failures to fulfil obligations, in relation to the special treatment given to the industrial installation in Massafra and to the national legislation itself.
25. Then, by a reasoned opinion of 16 December 2003, the Commission invited the Italian Republic to take the necessary measures to comply with the obligations under Directive 85/337 within a period of two months from the receipt of that opinion.
26. Since the Commission considered the position adopted by the Italian Government in a letter of 22 April 2004 to be unsatisfactory, it brought the present action under the second paragraph of Article 226 EC.
The action
Arguments of the parties
27. The Commission considers that the Massafra incineration installation, whose capacity exceeds 100 tonnes of waste per day, falls within point 10 of Annex I to Directive 85/337 and, as such, should, before being authorised, have been subject to an environmental impact assessment procedure.
28. It claims, more generally, that the effect of the Italian legislation at issue, by subjecting some waste recovery installations to the specific procedures provided for in Articles 31 and 33 of Legislative Decree No 22/1997, is to exclude the installations which fall within Annex I to Directive 85/337 from the procedure established in Article 4(1) and (2) of that directive.
29. The Commission also submits that the installations covered by Annex II to Directive 85/337 and, in particular, those to which point 11(b) of that annex refers, must, whether they concern waste disposal or recovery, at least be subject to the determination procedure to which Article 4(2) of that directive refers.
30. The Commission states that in the original version of Directive 75/442 the term ‘disposal’ covered both operations leading to actual disposal and recovery operations. It points out that identical terms were used in the original versions of Directives 75/442 and 85/337 and infers from that that, by adopting the latter directive, the Community legislature necessarily wished to subject some waste recovery operations to the provisions governing the environmental impact assessment procedure.
31. According to that institution, the term ‘disposal’ mentioned in points 9 and 10 of Annex I and point 11(b) of Annex II to Directive 85/337 also covers both disposal in the strict sense of the word and recovery operations.
32. The Commission addes that it does not see what difference there can be, from the point of view of the effect on the environment, between the construction in a given area of an installation carrying out waste recovery operations and that of an installation carrying out waste disposal operations. It points out, in that regard, that Directive 75/442 seeks to impose a control, admittedly with some differences, on both disposal and recovery operations, with the objective of safeguarding human health and the environment.
33. The Italian Republic does not admit the failure to fulfil obligations alleged, since the installations at issue carry out waste recovery and are subject to the simplified procedures put in place by Legislative Decree No 22/1997. By establishing, on one hand, a link between Directive 85/337 and Directive 75/442 as regards the technical terms used concerning waste and by referring, on the other hand, to the actual wording of Annex I, points 9 and 10 and to that of Annex II, point 11(b) to Directive 85/337, which rely on the single concept of waste disposal, the Italian Republic considers that that latter directive applies only to installations which carry out waste disposal, thus excluding from its scope waste recovery installations.
34. The Italian Government also submits that the amendments made to Directive 75/442 by Directive 91/156 were done with the aim of laying down a common terminology and a harmonised definition of waste, enabling comparison of the various provisions which, both at national and Community level, deal with waste. Therefore, when Directive 97/11 refers to the concept of waste, the terms and definitions which it uses are bound to be borrowed from the legislation specific to that sector, namely Directive 91/156.
35. The Italian Republic maintains, in addition, that where, so far as waste recovery is concerned, the emissions do not exceed the limits permitted by the Community legislation, it is not necessary to implement the assessment procedure inasmuch as the very aim of waste recovery is to protect the environment.
Findings of the Court
36. The Member States must implement Directive 85/337 in a manner which fully corresponds to its requirements, having regard to its fundamental objective which, as is clear from Article 2(1), is that, before consent is given, projects likely to have significant effects on the environment by virtue, inter alia, of their nature, size or location should be made subject to an assessment with regard to their effects (see, to that effect, Case C‑287/98 Linster  [2000] ECR I‑6917, paragraph 52).
37. In addition, it follows from the Court’s case-law that the scope of Directive 85/337 is wide and its purpose very broad (see Case C‑72/95 Kraaijeveld and Others  [1996] ECR I‑5403, paragraphs 31 and 39, and Case C ‑ 227/01 Commission  v Spain  [2004] ECR I‑8253, paragraph 46).
The complaint relating to the failure to subject the Massafra installation for electricity production through the incineration of CMW and biomass to the environmental impact assessment procedure
38. As the Italian legislation stands, the Massafra installation for the incinceration of CMW and biomass is considered to be an installation for the recovery of non-hazardous waste, with a capacity exceeding 100 tonnes per day, subject to the simplified procedures under the provisions of Legislative Decree No 22/1997, intended to transpose Article 11 of Directive 75/442. The Commission maintains that, in the light of the classification made by Directive 85/337, it is an installation for the disposal of non-hazardous waste by incineration or by chemical treatment, with a capacity exceeding 100 tonnes a day, within the meaning of point 10 of Annex I to Directive 85/337.
39. In order to establish whether that complaint is justified, the Court must first determine the legal scope of the concept of ‘disposal of waste’ for the purpose of Directive 85/337 in the light of the same expression used in Directive 75/442.
40. It is common ground that Directive 85/337 does not define the concept of waste disposal, Annexes I and II to that directive merely referring to some waste disposal installations. Furthermore, it is also common ground that Directive 75/442 does not include any general definition of the concepts of waste disposal and recovery, but merely refers to Annexes II A and II B to the directive, in which various operations falling within the scope of those concepts are listed (see Case C‑6/00 ASA   [2002] ECR I‑1961, paragraph 58).
41. The essential characteristic of a waste recovery operation, such as is apparent from Article 3(1)(b) of Directive 75/442 and from the fourth recital to that directive, is that its principal objective is that the waste can serve a useful purpose in replacing other materials which would have had to be used for that purpose, thereby conserving natural resources (see, inter alia, ASA , paragraph 69; Case C‑458/00 Commission  v Luxembourg  [2003] ECR I‑1553, paragraph 36; and Case C‑103/02 Commission  v Italy  [2004] ECR I-9127, paragraph 62).
42. That characteristic is extraneous to the consequences which the waste recovery operations as such can have on the environment. As the Advocate General pointed out in paragraphs 54 to 56 of his Opinion, those operations, like those for waste disposal, are capable of having significant effects on the environment. Moreover, Directive 75/442, in Article 4, obliges Member States to take the necessary measures to ensure that waste is recovered or disposed of without endangering human health and without using processes or methods which could harm the environment.
43. Lastly, it must be noted that where the Community legislature considered it necessary in Directive 85/337 to establish a link with Directive 75/442, it did so expressly. That applies, in particular, where, in points 9 and 10 of Annex I to that directive, it refers to chemical treatment as defined in Annex II A to Directive 75/442, under heading D 9. However, no reference of that nature is made concerning waste disposal itself.
44. Therefore, it must be held that the concept of waste disposal for the purpose of Directive 85/337 is an independent concept which must be given a meaning which fully satisfies the objective pursued by that measure, recalled at paragraph 36 above. Accordingly, that concept, which is not equivalent to that of waste disposal for the purpose of Directive 75/442, must be construed in the wider sense as covering all operations leading either to waste disposal, in the strict sense of the term, or to waste recovery.
45. As a result, the establishment in Massafra, which generates electricity from the incineration of biomass and CMW and has a capacity exceeding 100 tonnes per day, comes into the category of disposal installations for the incineration or chemical treatment of non‑hazardous waste in point 10 of Annex I to Directive 85/337. As such, before being authorised, it should have undergone the environmental impact assessment procedure, since the projects which fall within Annex I must undergo a systematic assessment under Articles 2(1) and 4(1) of that directive (see, to that effect, Case C‑431/92 Commission  v Germany  [1995] ECR I‑2189, paragraph 35).
46. In the light of the foregoing, it must be held that, by exempting from the environmental impact assessment procedure the Massafra installation for the incineration of CMW and of biomass, with a capacity exceeding 100 tonnes per day, covered by point 10 of Annex I to Directive 85/337, the Italian Republic has failed to fulfil its obligations under Articles 2(1) and 4(1) of that directive.
The complaint relating to the adoption of Article 3(1) of the DPCM, amending Annex A(i) and (l) to the DPR, excluding from the environmental impact assessment some projects covered by Annex I to Directive 85/337 (projects for installations for the recovery of hazardous waste and of non-hazardous waste with a capacity exceeding 100 tonnes per day) if they are authorised by a simplified procedure in accordance with Article 11 of Directive 75/442
47. It follows from Annex A(i) and (l) of the DPR that neither installations for the recovery of hazardous waste through the operations in Annex B and points R1 to R9 of Annex C to Legislative Decree No 22/1997, governed by the simplified procedures, nor installations for the recovery of non-hazardous waste, with a capacity exceeding 100 tonnes per day, through the incineration and treatment operations referred to in points D2 and D8 to D11 of Annex B and in points R1 to R9 of Annex C to that legislative decree, also covered by those simplified procedures, are subject to the environmental impact assessment procedure.
48. Having regard to the scope of the concept of ‘waste disposal’ for the purpose of Directive 85/337, as defined in paragraph 44 above, it is apparent that installations which, although they undertake waste recovery, are included in the category of installations for the disposal of hazardous waste by incineration or chemical treatment within the meaning of point 9 of Annex I to that directive and in the category of installations for the disposal of non-hazardous waste by incineration or chemical treatment within the meaning of point 10 of Annex I to that provision, may be among the projects thus made subject to the simplified procedures by the national legislation.
49. However, such installations cannot avoid the environmental impact assessment procedure since, as stated at paragraph 45 above, the projects listed in Annex I to Directive 85/337 must undergo such an assessment in so far as they are likely to have significant effects on the environment.
50. Consequently, by adopting Article 3(1) of the DPCM, amending Annex A(i) and (l) to the DPR, allowing projects for the recovery of hazardous waste and of non-hazardous waste with a capacity exceeding 100 tonnes per day covered by Annex I to Directive 85/337 to avoid the environmental impact assessment procedure provided for in Articles 2(1) and 4(1) of that directive, the Italian Republic has failed to fulfil its obligations under the directive.
The complaint relating to the adoption of Article 3(1) of the DPCM, amending Annex A(i) and (l) to the DPR, laying down an inappropriate criterion for the purpose of determining whether a project covered under Annex II to Directive 85/337 must undergo an environmental impact assessment.
51. As stated in paragraph 47 above, the effect of the criticised national legislation is that projects for the recovery of hazardous or non‑hazardous waste to which the simplified procedures apply avoid any assessment procedure as to their environmental effects. Installations for waste recovery covered by point 11(b) of Annex II to Directive 85/337 may be among those projects.
52. According to the Commission, the criterion set by the Italian authorities in order to thus exclude the installations for waste recovery referred to in Annex II from the environmental impact assessment procedure, namely that they must be subject to the simplified procedures laid down by Legislative Decree No 22/1997, is unsuitable in so far as it can exclude from that assessment projects which have significant effects on the environment.
53. In this connection, the Court has already held that Member States may establish the criteria and/or thresholds necessary to determine which of the projects covered by Annex II to Directive 85/337, in its original version, are to be subject to an assessment. However, the discretion thus granted to the Member States is limited by the obligation, set out in Article 2(1) of that directive, to subject projects likely to have significant effects on the environment, particularly by virtue of their nature, size or location, to an assessment with regard to their effects (see, to that effect, Kraaijeveld and Others , paragraph 50, and judgment of 16 March 2006 in Case C‑332/04 Commission  v Spain , not published in the ECR, paragraph 76). Accordingly, when establishing those thresholds and/or criteria, Member States must take account not only of the size of projects, but also of their nature and location (see, to that effect, Case C‑392/96 Commission  v Ireland  [1999] ECR I-5901, paragraph 65, and Commission  v Spain , paragraph 76).
54. In addition, in accordance with Article 4(3) of Directive 85/337, the Member States are under an obligation to take into account, when establishing those criteria or thresholds, the relevant selection criteria defined in Annex III to that directive (see, to that effect, Commission  v Spain , paragraph 79).
55. Annex III to Directive 85/337 distinguishes, among the selection criteria referred to in Article 4(3), (i) the characteristics of projects, which must be considered having regard, in particular, to the size of the project, the cumulation with other projects, the use of natural resources, the production of waste, pollution and nuisances and the risk of accidents, (ii) the location of projects, which means that the environmental sensitivity of geographical areas likely to be affected by projects must be considered having regard, in particular, to the existing land use and the absorption capacity of the natural environment, and (iii) the potential significant effects of projects having regard in particular to the geographical area and size of the population.
56. As regards having recourse to the simplified procedures laid down by the provisions of Legislative Decree No 22/1997, adopted in order to transpose Article 11 of Directive 75/442, it must be pointed out that the exemption, for the establishments or undertakings concerned, from the obligation to obtain a permit to carry out waste recovery, a permit which is in principle required at the stage when the waste treatment procedure is implemented under Article 10 of that directive, can only apply under the conditions specified in Articles 4 and 11(1) of the directive.
57. It follows from those latter provisions that, first, the competent authorities must have adopted general rules for each type of activity, laying down the types and quantities of waste and the conditions under which the activity in question may be exempted from the permit requirement. Second, the types or quantities of waste and methods of recovery must be such that human health is not endangered and there is no use of processes or methods which could harm the environment, and in particular there is no risk to water, air, soil and plants and animals, no nuisance is caused through noise or odours, and there is no adverse effect on the countryside or places of special interest.
58. Therefore, by excluding projects for waste recovery installations from the environmental impact assessment, which must take place before the delivery of the decision of the competent authority or authorities which entitles the developer to proceed with the project, on the basis of the simplified procedure, the Italian legislation does not take into account all the selection criteria laid down in Annex III to Directive 85/337.
59. As a result, the criterion adopted by the Italian legislation, connected exclusively with the implementation of the simplified procedures, in order to exempt installations for waste recovery covered by point 11(b) of Annex II to Directive 85/337 from the assessment of environmental effects does not fulfil the requirements set out in paragraphs 53 to 55 above in so far as it can lead to projects which are likely to have significant effects on the environment by virtue of their size or location being exempt from an assessment of their environmental effects. Consequently, the legislation at issue is such as to undermine the objective of Directive 85/337, as stated in paragraph 36 above.
60. Having regard to the foregoing considerations, it must be stated that, by adopting Article 3(1) of the DPCM, amending Annex A(i) and (l) to the DPR, laying down, for the purposes of determining whether or not a project covered by Annex II to Directive 85/337 must be subject to an environmental impact assessment, a criterion which is inappropriate in that it may exclude projects which have a significant effect on the environment from that assessment, the Italian Republic has failed to fulfil its obligations under Articles 2(1) and 4(2) and (3) of that directive.
Costs
61. Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Commission applied for costs and the Italian Republic has been unsuccessful, the latter must be ordered to pay the costs.
Operative part
On those grounds, the Court (Second Chamber) hereby:
1. Declares that
–	by exempting from the environmental impact assessment procedure the Massafra installation for the incineration of combustible materials derived from waste and biomass, with a capacity exceeding 100 tonnes per day, covered by point 10 of Annex I to Council Directive 85/337/EEC of 27 June 1985 on the assessment of the effects of certain public and private projects on the environment, as amended by Council  Directive 97/11/EC of 3 March 1997,
– by adopting Article 3(1) of the Decree of the President of the Council of Ministers of 3 September 1999, entitled ‘Policy and coordination measure amending and completing the earlier policy and coordination measure for the implementation of Article 40(1) of Law No 146 of 22 February 1994 concerning provisions relating to the assessment of environmental impact, amending Annex A(i) and (l) to the Decree of the President of the Republic of 12 April 1996, entitled ‘Policy and coordination measure for the implementation of Article 40(1) of Law No 146 of 22 February 1994 concerning provisions relating to the assessment of environmental impact, allowing projects for the recovery of hazardous waste and of non‑hazardous waste with a capacity exceeding 100 tonnes per day covered by Annex I to Council Directive 85/337, as amended by Council Directive 97/11, to avoid the environmental impact assessment procedure provided for in Articles 2(1) and 4(1) of that directive, and
– by adopting Article 3(1) of the Decree of the President of the Council of Ministers of 3 September 1999, laying down, for the purposes of determining whether a project covered by Annex II to Directive 85/337, as amended by Directive 97/11, must be subject to an environmental impact assessment, a criterion which is inappropriate in that it may exclude projects which have a significant effect on the environment from that assessment,
the Italian Republic has failed to fulfil its obligations under Articles 2(1) and 4(1), (2) and (3) of that directive;
2.	Orders the Italian Republic to pay the costs.