OPINION OF ADVOCATE GENERAL

MAZÁK

delivered on 22 March 2007 ( )

Case C-194/05

Commission of the European Communities

v

Italian Republic

(Failure of a Member State to fulfil obligations – Environment – Directive 75/442/EEC as amended by Directive 91/156/EEC – Concept of ‘waste’ – Excavated earth and rocks)

I – Introduction

1. By the present action, the Commission seeks a declaration that the Italian Republic has failed to fulfil its obligations under Article 1(a) of Council Directive 75/442/EEC of 15 July 1975 on waste, ( ) as amended by Council Directive 91/156/EEC of 18 March 1991 ( ) (‘Directive 75/442’ or ‘the Directive’), in so far as Article 10 of Law No 93 of 2001 and Article 1(17) and (19) of Law No 443 of 2001 exclude from the scope of national rules on waste excavated earth and rocks intended for actual reuse for re-filling, infilling, embanking and grinding, with the exception of materials from polluted sites and reclaimed land with a concentration of pollutants above the acceptable limits laid down in the applicable rules.

2. This is yet another case before the Court of Justice concerning the Community concept of waste. Given the fact that there neither is nor can be a comprehensive definition of the concept of waste and that, accordingly, the question whether a given substance is waste has to be determined on a case-by-case basis in the light of all the circumstances, the Court will certainly have ample opportunity also in the future to reflect on the meaning of that term.

3. The central issue in the present case is how far and under which circumstances a substance which is reused for certain purposes may be regarded as falling outside the definition of waste in the Directive. This case thus concerns the distinction to be drawn between waste recovery and normal industrial treatment of a product, or – more precisely – a by‑product, which is not waste.

4. In this respect the present case is closely connected to Case C‑195/05 in which I am also delivering my Opinion today and to which I shall refer here to the extent that these cases overlap. ( )

II – Legislative background

A – Directive 75/442

5. Article 1(a) of the Directive provides as follows:

‘(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.

The Commission, acting in accordance with the procedure laid down in Article 18, will draw up, not later than 1 April 1993, a list of wastes belonging to the categories listed in Annex I. This list will be periodically reviewed and, if necessary, revised by the same procedure;’.

6. Annex I to Directive 75/442, entitled ‘Categories of Waste’, includes, as Category Q16, ‘[a]ny materials substances or products which are not contained in the above categories’.

7. The current list of waste, adopted by the Commission in accordance with Article 1(a) of Directive 75/442, ( ) refers in Chapter 17 – one of the Chapters listing sources generating waste and concerning ‘Construction and demolition wastes (including road construction)’ – to ‘Soil and dredging spoil’ (head 17 05) and, more specifically, to ‘Soil and stones containing dangerous substances’ (code 17 05 03*) and ‘Soil and stones other than those mentioned in 17 05 03’ (code 17 05 04).

B – National legislation

8. In Italy, the disposal of waste is governed by Legislative Decree No 22 of 5 February 1997 ( ) (‘LD No 22/97’).

9. Article 6(1)(a) of LD No 22/97 defines waste as follows:

‘For the purposes of this Decree:

(a) “waste” shall mean any substance or object in the categories set out in Annex A which the holder discards, or intends or is required to discard.’

10. Article 8(1) of LD No 22/97 excludes certain substances or materials from the scope of the decree, in so far as they are covered by specific legislation, including, under point (b), ‘waste resulting from prospecting, extraction, treatment and storage of mineral resources and the working of quarries’.

11. Article 10 of Law No 93 of 23 March 2001 concerning ‘provisions on the environment’ (‘Law No 93’) added a new point (f‑a) in Article 8(1) of LD No 22/97. Accordingly, the following substances, which are specified in that point, are inter alia excluded from the scope of the Decree:

‘excavated earth and rocks intended for actual use for re-filling, infilling, embanking and grinding, with the exception of materials from polluted sites and reclaimed land with a concentration of pollutants above the acceptable limits laid down in the applicable legislation.’

12. Article 1(17) of Law No 443 of 21 December 2001 entitled ‘delegation of the Government with regard to infrastructure and installations of strategic production […]’ (‘Law No 443’) provided that Article 8(1)(f‑a) of LD No 22/97 is to be interpreted:

‘as meaning that excavated earth and rocks, including from tunnels, are not waste and, consequently, are excluded from the scope of that legislative decree, even if they are contaminated, during the production cycle, by pollutant substances coming from activities of excavation, drilling and construction, in so far as the average composition of the total mass does not have a concentration of pollutants above the maximum limits laid down in the applicable legislation.’

13. Moreover, Article 1(19) of Law No 443 provides that:

‘[f]or materials referred to in paragraph 17, actual use for re-filling, infilling, embanking and grinding shall also mean use for different cycles of industrial production, including the infilling of cultivated quarries and the dumping on to another site, authorised for any reason whatsoever by the competent administrative authority, provided that the limits referred to in paragraph 18 are complied with and that that dumping is effected in accordance with the detailed rules for environmental redevelopment of the site concerned.’

14. Articles 1(17) and (19) of Law No 443 were amended by Article 23 of Law No 306 of 31 October 2003 (‘Law No 306’).

III – Pre-litigation procedure and judicial proceedings

15. By a letter before action of 27 June 2002, the Commission informed the Italian Government that, in its view, by excluding excavated earth and rocks intended to be reused for certain purposes from the scope of the national rules on waste, Article 10 of Law No 93, read in conjunction with Article 1(17) and (19) of Law No 443, infringes Directive 75/442.

16. Since the Italian authorities did not reply to that letter, the Commission issued a reasoned opinion on 19 December 2002, calling on the Italian Republic to comply with the Directive within a period of two months from receipt of that reasoned opinion.

17. In their reply of 5 March 2003 to the reasoned opinion, the Italian authorities sent the Commission a draft amendment to the legislation concerning excavated earth. At a joint meeting on 25 June 2003, the Commission maintained that that draft legislation continued to provide for a strict interpretation of the notion of waste and that it was therefore contrary to the Directive. By letter of 3 February 2004, the Italian authorities sent the Commission a copy of the new text of the amended law, namely Law No 306, as announced to the Commission by letter of 5 March 2003.

18. Taking the view that the situation remained unsatisfactory, the Commission brought the present action by application lodged at the Court Registry on 2 May 2005.

IV – Analysis of the alleged infringement

A – Main arguments of the parties

19. The Commission complains that the Italian legislation on waste, in particular Article 10 of Law No 93, read in conjunction with Article 1(17) and (19) of Law No 443, infringes – even if the amendments made by Law No 306 are taken into account – Directive 75/442 in that it excludes a priori and in general excavated earth and rocks intended for certain operations of reuse from the scope of application of national legislation on waste, with the consequence that the provisions on the management of waste laid down in the Directive will not be applied in Italy to those materials.

20. The Commission considers that the materials in issue, which are included in the European Waste Catalogue, constitute materials which the holder wishes to discard and which must therefore be regarded as covered by the definition of waste in Directive 75/442. In its view, the fact that those materials are excluded from the scope of the Italian legislation on waste only in so far as they are intended for actual reuse for re-filling, infilling, embanking and grinding is not relevant.

21. The Commission argues that the definition of waste in Italian legislation is narrower than the concept of waste as defined in the Directive as further interpreted by the case-law of the Court. According to that case-law, ( ) for a residue not to be regarded as waste but as a by-product which the holder does not discard, it is necessary to assess in particular the likelihood that the residue will be reused, but above all it is necessary to ascertain that it will actually be reused in the same process of production.

22. Contrary to that case-law, the exclusion at issue in the present case applies also in cases where those residues are reused in different production cycles, including the infilling of cultivated quarries and the tipping on to another site, authorised by the competent national authority.

23. Lastly, the Commission submits that the amendments made by Law No 306 have not essentially changed the infringement complained of.

24. The Italian Government maintains, first of all, that the action is inadmissible since, in its view, the Commission did not take into account the amendments made by Law No 306 adopted on 31 October 2003, that is to say, during the infringement proceedings.

25. As to the substance, that Government submits that the Italian legislation is consonant with the concept of waste as defined in Directive 75/442.

26. Relying on the case-law of the Court, ( ) the Italian Government argues that the Community notion of ‘waste’ is subject to reasonable exceptions in the case of by-products which the undertaking does not wish to ‘discard’ as waste.

27. In its view, a careful reading of that case-law shows that the essential requirement for the classification of residue as a by-product rather than as waste is not the reuse of those materials in the same process of production as that from which they derive, but rather the certainty that they will be reused, without any prior processing. Residues which are certain to be used, and without any prior processing, in a process of production other than that from which they derive – but in any event occurring at the same time as the latter, or at least at a time appropriate for ensuring reuse in a timely manner – should be classified as by-products.

28. The Italian Government emphasises that, in the present case, the primary objective of the national legislature was to carry out public works and that the movement of earth and the intended use of excavated earth constitute probably the most important part of such projects. It is thus the fact that those carrying out the projects are under an obligation to complete them which guarantees the actual reuse of excavated earth and materials for embanking.

29. The legislation at issue, far from laying down a general exclusion, determines strictly – at the stage of planning and control of the performance of the works – the cases in which excavated earth and rocks are to be exempt from the legislation on waste, in so far as they are materials which may be reused in accordance with a coherent plan based on a prior and specific assessment of the effects on the environment and on health.

B – Appraisal

30. As regards, first of all, the preliminary objection as to admissibility raised by the Italian Government on the ground that the Commission did not take into account the amendments made by Law No 306 adopted on 31 October 2003 – that is to say, after the expiry of the period prescribed in the reasoned opinion – it should be recalled that it is settled case-law that the question whether or not a Member State has failed to fulfil its obligations must be determined by reference to the situation prevailing in the Member State at the end of the period laid down in the reasoned opinion and that the Court cannot take account of any subsequent changes. ( )

31. Thus the Commission was not under an obligation in the present proceedings to take into account the amendments made by Law No 306; nor is that law subject to scrutiny in the present case. In that regard, it should be noted that the form of order sought does not refer to Law No 306 and although the Commission stated that that law had not changed the infringement complained of, it emphasised both in its reply and at the hearing that it is not challenging Law No 306 in the framework of the present proceedings.

32. It must therefore be examined whether the Italian legislation on waste at issue, namely Law No 93 and Law No 443, unlawfully restricts the concept of waste as defined in Directive 75/442 by excluding from its scope excavated earth and rocks intended for certain operations of reuse.

33. I shall begin by briefly outlining the principal features of the concept of waste under the Directive as refined by the Court. ( )

34. First, it follows from settled case-law, in particular, that the question whether a material or a good is to be regarded as waste within the meaning of the Directive depends on whether the holder discards it, or intends or is required to discard it. That factor must be established in the light of all the circumstances. On that point, the Court has provided a number of criteria and guidelines from which it may be possible to infer the act of discarding or a corresponding intention. Thus, the fact that a substance used is a production residue – that is to say, a product not sought by the producer primarily and as such – is, as a rule, evidence that the holder of that substance has discarded it or intends to discard it. ( )

35. However, goods, materials or raw materials resulting from a manufacturing or extraction process which is not primarily intended to produce that item may also constitute, not a residue, but a by-product which the undertaking intends to exploit or market on terms which are advantageous to it, in a subsequent process, without any process prior to reuse. Given the obligation to interpret the concept of waste widely, the reuse of the goods, materials or raw materials must, according to the case-law, be a certainty and form part of the continuing process of production or use. It is nevertheless possible for a substance not to be regarded as waste if it is certain to be used to meet the needs of economic operators other than the operator who produced it. ( )

36. As I have also pointed out in my Opinion in Case C‑195/05, what is in the end decisive with regard to classification as a by-product is whether there is evidence that the substance concerned represents an economic value to the holder – rather than a burden he would seek to discard – be it in terms of its further exploitation or use for the principal activity or because the holder markets it on terms which are advantageous to him. ( )

37. Finally, it must always be borne in mind that, in view of the aims of the Directive, the concept of waste cannot be interpreted restrictively. ( )

38. Turning now to the national rules at issue in the present proceedings, they exclude earth and rocks from the scope of the rules on waste on condition that these materials are intended to be reused for re-filling, infilling, embanking and grinding.

39. In that regard, it must be noted that, even supposing that the materials in question are actually intended for reuse, it cannot, as the Commission rightly submitted, automatically and in general be inferred from that fact alone that those materials are not waste.

40. In fact, the legislation at issue, particularly Article 1(19) of Law No 443, clearly envisages a wide range of situations, including cases where earth or rocks are dumped on to another site.

41. Moreover, the requirements concerning actual reuse appear to be found in, or derive from, various legal contexts such as national provisions on public works – of which the Italian Government did not cite any specific set of rules – or the content of specific projects entailing the excavation of earth and rocks. As a consequence, there is a broad range of possibilities as to the circumstances and conditions of the reuse concerned. This raises serious doubts as to the certainty of reuse in any given case.

42. In particular, as the Italian Government has pointed out at the hearing, even though the former Government may have taken measures to accelerate public works in Italy in general, there is no rule in the legislation at issue that in a particular case materials from excavations are to be reused within a certain time frame. It may be recalled in this context that in Palin Granit, in which leftover stone resulting from quarrying was classified as an extraction residue and therefore as waste, the Court attached importance to the length of time of the storage and pointed out that long-term storage operations constitute a burden on the holder and are potentially the cause of precisely the environmental pollution which the Directive seeks to reduce. ( )

43. In the light of these factors, it cannot be generally and a priori presumed – even if it may be true in certain cases – that, in the situations covered by the exemption provided for in Law No 93 and Law No 443, the earth and rocks resulting from excavations constitute, on account of the intended reuse, an economic value or advantage to their holder as a by-product rather than a burden he seeks to discard. In fact there is no compelling reason, in the light of the legislation at issue and the explanations offered by the Italian Government, to suppose that, as a rule, the advantage to the holder consists in more than the mere fact that he can get rid of the earth and rocks concerned, that is to say, that he is able to discard them. Accordingly, in those cases the operations of reuse in question are actually to be viewed as operations of disposal or recovery within the meaning of the Directive.

44. It follows that the Italian legislation on waste at issue leads, as the Commission has submitted, to the exclusion from classification as waste of production residues which fall within the definition of waste laid down in Directive 75/442.

45. In so far as the exemption under Italian law relating to earth and rocks intended for certain operations of reuse amounts actually to a presumption that these materials are not waste within the meaning of the Directive, it should be noted that the effectiveness of Article 174 of the Treaty and of the Directive would be undermined if the national legislature were to use modes of proof, such as statutory presumptions, which had the effect of restricting the scope of the Directive so as not to cover materials, substances or products which clearly fall within the definition of waste laid down in the Directive. ( )

46. Next, as regards the Italian Government’s statement at the oral hearing that the operations in question – which are primarily public works such as the construction of embankments and tunnels – are governed by a plethora of national provisions, it should be noted that this could only lead the materials concerned to be excluded from the scope of the Directive if they fell under one of the categories of waste referred to in Article 2(1) of the Directive. However, that is clearly not the case, since the earth and rocks resulting from those operations do not constitute waste ‘resulting from prospecting, extraction, treatment and storage of mineral resources’ or from ‘the working of quarries’ within the meaning of Article 2(1)(b)(ii).

47. Moreover, the Italian Government has not shown to what extent the various provisions of national law applicable to the projects or works at issue relate, as is required by the case-law, to the management of waste as such and result in a level of protection of the environment at least equivalent to that sought by the Directive. ( )

48. Finally, as regards the argument put forward by the Italian Government that application of the waste regime would mean that waste-disposal undertakings or undertakings licensed to transport or collect waste would have to be involved in the works and that that might increase costs considerably, the Commission rightly pointed out that this problem arises from the Italian legislation rather than from the Directive. Subject to the requirements as to registration, or, as the case may be, obtaining a permit, the producer or holder of the waste can simply recover it or dispose of it himself in accordance with the provisions of the Directive. ( )

49. In the light of the foregoing, I come to the conclusion that the complaint of the Commission is well founded.

V – Conclusion

50. I therefore propose that the Court should

(1) declare that in so far as Article 10 of Law No 93 of 2001 and Article 1(17) and (19) of Law No 443 of 2001 exclude from the scope of national rules on waste excavated earth and rocks intended for actual reuse for re-filling, infilling, embanking and grinding, with the exception of materials from polluted sites and reclaimed land with a concentration of pollutants above the acceptable limits laid down in the applicable rules, the Italian Republic has failed to fulfil its obligations under Article 1(a) of Council Directive 75/442/EEC of 15 July 1975 on waste, as amended by Council Directive 91/156/EEC of 18 March 1991; and

(2) order the Italian Republic to pay the costs.