COMMISSION STAFF WORKING DOCUMENT REFIT Evaluation of the Environmental Liability Directive Accompanying the document Report from the Commission to the European Parliament and to the Council pursuant to Article 18(2) of Directive 2004/35/EC on environmental liability with regard to the prevention and remedying of environmental damage
Date: 2016-04-14
Institutions: Directorate-General for Environment, European Commission
Subjects: EU environmental policy, cost of pollution, environmental liability, environmental monitoring, environmental protection, national implementing measure, polluter pays principle, prevention of pollution

EUROPEAN 
COMMISSION 

Brussels, 14.4.2016  
SWD(2016) 121 final 

COMMISSION STAFF WORKING DOCUMENT 

REFIT Evaluation of the Environmental Liability Directive 

Accompanying the document 

Report from the Commission to the European Parliament and to the Council pursuant 
to Article 18(2) of Directive 2004/35/EC on environmental liability with regard to the 
prevention and remedying of environmental damage 

{COM(2016) 204 final} 
{SWD(2016) 122 final} 

EN 

   EN 

 
 
 
 
  
 
 
 
 
TABLE OF CONTENTS 

1. 

INTRODUCTION....................................................................................................... 3 

1.1.  Purpose of the evaluation .................................................................................. 3 
1.2.  Scope of the evaluation ..................................................................................... 4 

2.  BACKGROUND TO THE INITIATIVE ................................................................... 5 

2.1.  Description of the initiative and its objectives .................................................. 5 
2.2.  Baseline ............................................................................................................. 7 
2.2.1.  Overview  on  the  functioning  of  the  Environmental  Liability 

Directive .............................................................................................. 7 
2.2.2.  Objectives of the Environmental Liability Directive ........................ 10 
2.2.3.  The Polluter-Pays Principle............................................................... 11 
2.2.4.  The Liability Scope and Standard of the ELD .................................. 11 

3.  EVALUATION QUESTIONS.................................................................................. 15 

4.  METHOD/PROCESS FOLLOWED ........................................................................ 16 

4.1.  Process/Methodology ...................................................................................... 16 
4.2.  Limitations – robustness of findings ............................................................... 17 

5.  TRANSPOSITION 

AND 

IMPLEMENTATION 

OF 

THE 

ENVIRONMENTAL LIABILITY DIRECTIVE (STATE OF PLAY).................... 18 

5.1.  Transposition of the ELD ................................................................................ 18 
6.2. Implementation of the ELD................................................................................ 21 

6.  ANSWERS TO THE EVALUATION QUESTIONS............................................... 35 

6.1.  Relevance ........................................................................................................ 35 
6.2.  Effectiveness.................................................................................................... 36 
6.3.  Efficiency ........................................................................................................ 43 
6.4.  Coherence ........................................................................................................ 51 
6.5.  Complementarity ............................................................................................. 57 
6.6.  EU-added value ............................................................................................... 58 

7.  CONCLUSIONS ....................................................................................................... 60 

ANNEXES ........................................................................................................................ 63 

ANNEX 1: PROCEDURAL INFORMATION ........................................................ 63 
ANNEX 2: ELD STUDIES....................................................................................... 64 
ANNEX 3: MEMBER STATES REPORTS ............................................................ 77 
ANNEX 4: THE POLLUTER-PAYS PRINCIPLE.................................................. 95 

2 

 
 
 
 
1. 

INTRODUCTION 

1.1. 

Purpose of the evaluation 

Pursuant to the Commission's Regulatory Fitness and Performance Programme (REFIT)1, 
the  purpose  of  this  evaluation  is  to  examine  to  what  extent  Directive  2004/35/EC  on 
environmental  liability2  (Environmental  Liability  Directive  –  ELD)  remains  fit  for 
purpose with regard to the prevention and remedying of environmental damage remains 
fit  for  purpose  and  whether  it  delivers  the  intended  results.  REFIT  is  the  European 
Commission's  Regulatory  Fitness  and  Performance  programme,  whose  main  purpose  is 
to make EU law simpler and to reduce regulatory costs, thus supporting growth and jobs 
by contributing to a clear, stable and predictable regulatory framework. 

The evaluation of Directive 2004/35/EC is triggered by the legal requirement pursuant to 
its Article 18(2) and (3), to report on the experience gained in the application of the ELD 
including  a  review  (COM(2016)204).  According  to  this  requirement,  the  Commission 
shall submit a report to the European Parliament and to the Council by 30 April 20143 
based on the reports on the experience gained in the application of the Directive between 
30 April 2007 and 30 April 2013, as submitted by the Member States to the Commission 
according to Article 18(1) of the ELD. 

According to Article 18(3) ELD the report must review the following points: 

(a)  the  application  of  Article  4(2)  and  (4)  ELD  relating  to  the  exclusion  of  pollution 
covered by the international instruments listed in Annexes IV and V of the ELD from the 
scope of the Directive and of Article 4(3) ELD relating to the right of an operator to limit 
his liability in accordance with the international conventions in Article 4(3); 

(b)  the  application  of  the  Directive  to  environmental  damage  caused  by  genetically 
modified organisms (GMOs); 

(c) the application of the Directive in relation to protected species and natural habitats; 

(d)  instruments  that  may  be  eligible  for  incorporation  into  Annexes  III  (occupational 
activities  covered  by  strict  liability),  IV  (international  Conventions  in  the  maritime 
sector) and V (international instruments in the nuclear sector). 

In  2013,  the  REFIT  programme  included  the  ELD  which  required  an  evidence-based 
judgment carried out according to the main evaluation criteria of relevance, effectiveness, 
efficiency, coherence, and EU-added value as well as further criteria, as appropriate. 

This  evaluation  will  examine  to  which  extent  the  ELD  is  fit  for  purpose  and  will  look 
into  what  works  and  what  does  not,  including  to  what  extent  objectives  have  been 

1 See last Better Regulation Communication (COM(2015)215) 

2 OJ L 143, 30.4.2004, p. 56. 

3 The Commission ELD evaluation and report is delayed due to several reasons: first, national reports and commissioned studies in 
2013 and early 2014 were received with a delay,  second, a new Commission was appointed in 2014 and third, the new Better 
Regulation package and REFIT evaluation regime was introduced on 19th of May 2015. 

3 

 
 
 
 
                                                            
achieved  between  April  2007  and  April  2013  and  why  some  elements  or  features  were 
successful  or  not.  It  is  thus  an  ex-post  evaluation  of  the  Environmental  Liability 
Directive, based on the evidence mainly gathered in the context of the ELD report. It will 
examine  the  performance  of  the  ELD  according  to  the  abovementioned  five  standard 
evaluation criteria, supplemented by the further evaluation criterion of complementarity 
with MS legislation which appears to be relevant in the context of the ELD. 

The evaluation will deliver a summary overview of the functioning and implementation 
of the Directive and of how and to what extent its objectives were reached. It will also 
describe  the  challenges  and  problems  of  the  Directive  regarding  its  legal  obligations, 
technical  requirements, 
implementation  deficits, 
shortcomings  and  sometimes  wide  variations  in  implementation,  and  indicate  possible 
solutions how weaknesses and divergences in the application of the Directive, could be 
improved on the basis of the evidence gathered in the evaluation. 

transposition, 

the  national 

the 

The  results  of  this  evaluation  will  be  used  to  strive  for  further  improvement  of  the 
implementation  of  the  Directive  to  the  extent  necessary,  through  a  range  of  practical 
measures  as  presented  in  the  final  conclusions  and  the  consequential  action  plan 
consistent with the elaborated means and methods in the report under Article 18(2) ELD. 

1.2. 

Scope of the evaluation 

This  evaluation  covers  the  scope  of  the  Environmental  Liability  Directive,  its 
implementation in practice, and links to related EU law, national law or international law. 

It looks into all aspects of the functioning of the Directive which consists in 

• 

• 

• 

• 

• 

• 
• 

the trigger as well as in the application of preventive action as well as remedial action 
of liable operators, 
the  enforcement  including  approval  of  remediation  plans  by  the  competent 
authorities, 
the  use  of  the  three  remedial  action  types  under  the  ELD:  primary,  complementary 
and compensatory remediation of environmental damage, 
the  contribution  by  civil  society  (persons  affected  by  environmental  damage  and 
environmental NGOs) to the detection and remediation of environmental damage, 
the  cover  (offer  and  demand)  of  financial  security  including  insurance  for  ELD 
liabilities, 
the potential deterrent effect and enhanced risk management (changed behaviour), 
the  contribution  of  the  Directive  to  reducing  of  environmental  damage  and  halting 
biodiversity loss, improving the freshwater and marine water quality as well as soil 
protection in the EU. 

The  evidence  base  of  this  evaluation  includes  the  Member  States  reports  of  2013,  the 
targeted external implementation and evaluation studies launched by the Commission in 
2012  and  2013,  the  conclusions  from  the  Commission  ELD  report  2010  and  relevant 
stakeholder  input  or  feedback.4  As  basic  knowledge  of  the  ELD  enables  a  better 
understanding  of  the  investigation,  information  and  findings,  the  relevant  basic 

relevant 

4  All 
Commission: 
http://ec.europa.eu/environment/legal/liability/index.htm  including  a  brief  information  sheet  and  a  brochure  on  the  ELD  and  a 
summary of the Directive). 

liability  website 

environmental 

documents 

available 

the 

the 

are 

on 

of 

4 

 
 
  
 
 
                                                            
information  in  chapter  2  below  including  figure  3  summarises  the  functioning  of  the 
Directive. 

In  addition  to  the  four  specific  review  points  in  Article  18(3)  ELD  mentioned  above, 
particular  reference  should  also  be  made  to  the  Commission  report  of  October  20105 
which covers in its conclusions and recommendations the points to be looked at by this 
second Commission report on the ELD: the uneven biodiversity damage scope across the 
EU, the uneven application of the permit and state of the art defences across the EU, the 
divergent national transposing rules potentially creating difficulties, the sufficiency of the 
financial capacities of operators in particular in case of major accidents, and the potential 
need for an EU-wide mandatory financial security system. 

2.  BACKGROUND TO THE INITIATIVE 

2.1.  Description of the initiative and its objectives 

The  background  to  the  adoption  of  the  ELD  was  the  need  to  reduce  environmental 
damage to natural resources and to ensure that the polluter who caused the damage takes 
responsibility in order to avoid that such damage remains unrestored or that the general 
tax payer bears the costs of the restoration. 
Industrial and other activities in the 20th century have caused considerable damage to the 
environment  and  put  the  environment  under  increasing  pressure.  Hence,  the  protection 
and  restoration  of  the  environment  have  become  a  growing  global  concern.  In  the 
European Union, this has led to the development of an environmental policy based on the 
current  Articles  191  to  193  of  the  Treaty  on  the  Functioning  of  the  European  Union 
(TFEU). In its Article 191(2), the guiding principles for the implementation of this policy 
are mentioned. All of these principles and particularly the polluter-pays principle are of 
direct relevance and are implemented through the ELD.6 

Problems with contaminated sites posing significant health risks and loss of biodiversity 
as  well  as  pollution  of  freshwaters  required  action  in  various  respects.  While 
environmental  impact  assessments,  the  setting  of  permit  requirements  or  of  technical 
standards  to  limit  pollution  levels  and  the  establishment  of  plans  and  programs  to 
monitor  and  better  control  the  environmental  degradation  and  improve  environmental 
protection levels tackle environmental pollution mainly ex ante, a general instrument to 
tackle  it  ex  post  was  still  missing.  In  the  light  of  many  pollution  incidents  and  events 
including in particular some major accidents with or without transboundary effects at EU 
level  which  contributed  significantly  to  environmental  damage,  the  Commission  had 
started  in  the  1990s  to  work  on  the  establishment  of  a  general  binding  liability 
instrument7  to  prevent  and  to  repair  environmental  damage  where  such  damage  can  be 
clearly attributed to individual responsible polluters. 

The complete and detailed intervention logic is presented as follows: 

5 http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52010DC0581 

6 "Union policy on the environment shall aim at a high level of protection taking into account the diversity of situations in the various 
regions of the Union. It shall be based on the precautionary principle and on the principles that preventive action should be taken, 
that environmental damage should as a priority be rectified at source and that the polluter should pay." 

7 Green Paper of 1993 and White Paper of 2000, leading to the Commission legislative proposal of 2002. 

5 

 
 
                                                            
Figure 1: The intervention logic for the Environmental Liability Directive 

Objectives  

•  To establish a framework of environmental liability based on the ‘polluter-pays' principle, to prevent 

and remedy environmental damage 
Ensure effectiveness in terms of actual remediation of environmental damages including for interim 
losses 
Ensure the availability at reasonable costs of insurance and other types of financial security 

• 

• 

Actions  

•  Member States to transpose the Directive into national legislation 
•  Member States to enforce and implement the Directive 
•  Member States to take measures to encourage the development of financial security instruments 

including, as appropriate, to establish mandatory financial security 

•  Member States to report on the application of the Directive to the Commission in 2013 
•  Commission to assess timely and conform transposition by all Member States  
•  Commission to monitor the implementation of the Directive and react as appropriate 
•  Commission to support implementation, and to engage with stakeholders, practitioners and experts 

Consequences 

•  All MS applying the Directive meaning effectively preventing and remedying environmental damage   
•  Harmonised remediation methods and standards developed as necessary  
•  Functioning information and notification system / inventory of  ELD instances system established as 

appropriate 

•  Functioning financial security system established as necessary 
•  Developing and putting in motion awareness, information, exchange of experience and training of 

operators, competent authorities, financial security providers and ENGOs at national and at EU levels  

•  Evaluating and reviewing the implementation (effectiveness, etc.) and taking action as necessary

Expected results / Impact 

•  Prevention and remediation of environmental damage works effectively in the EU, thus contributing to 
the halting of  biodiversity loss, to safeguarding the European waters and to protecting the soil quality  

•  Liability in environmental damage cases is clearly and rapidly attributed to the actual polluters 
•  Compliance with international obligations 
•  Appropriate financial security instruments and markets for ELD liabilities are available at reasonable 

costs 

•  Awareness of risks and liabilities is improving gradually with operators and financial security providers 

External factors 

(Pre-)existing national legislation in this and neighbouring fields, the relevant national legal framework 

•  Transposition, compliance and willingness to enforce by Member States 
• 
•  Resources, supporting tools and expertise within competent authorities 
•  Level of cooperation at all levels and between stakeholders 
•  Economic and financial environment 
•  Expertise and available funds within insurance and financial security industry 
•  Climate change (warmer climate = more biodiversity loss etc.)

6 

 
 
 
2.2.  Baseline 

Before  the  ELD  was  adopted,  environmental  liability  had  been  scattered  around  many 
national  jurisdictions  in  the  EU.  Some  Member  States  had  environmental  liability 
regimes either for specific damage categories, others had broader defined regimes which 
were  in  general  not  much  elaborated  and  in  practice  often  ineffective.  Environmental 
liability for biodiversity was lacking nearly everywhere. Apart from some specific laws, 
strict  liability  standard  for  environmental  damage  was  rather  the  exception;  many  laws 
required time-consuming and often inefficient prove of fault, thus failing the purpose of 
quick remediation. The public liability regimes were in most of the Member States not 
supported by participation rights of the civil society (affected persons and environmental 
NGOs).  Often  the  national  liability  system  did  not  require  restoration  of  the  damaged 
natural resources to the condition which existed before the time of the damage. 

Serious accidents leading to major losses in terms of natural capital could not be tackled 
appropriately  as  the  damage  was  left  un-remedied  or  was  remedied  at  tax  payer's 
expense. Most severe damage incidents, such as the Boliden's Doñana accident in 1999, 
briefly described in the box below, had even a direct effect on spurring the development 
of the Directive, proposed by the Commission in 2002. 

Box 1: Severe environmental damage case example: Doñana accident of 1999 
illustrating the baseline before intervention 

On  25  April  1998,  a  dam  at  the  Los  Frailes  pyrite  mine  operated  by  Boliden  Apirsa 
(Apirsa),  a  subsidiary  of  the  Swedish  mining  company  Boliden,  at  Aznalcóllar  near 
Seville, Spain, collapsed, resulting in the release of water and slurry from a 1.5 square 
kilometre  tailings  pond.  Acidic  water  and  heavily  contaminated  slurry  tailings  spilled 
into the Agrio, Guadiamar and Los Frailes rivers. Around 4 500 hectares of agricultural 
land  were  contaminated  by  the  polluted  water;  2  600  hectares  were  covered  with 
tailings. The contamination resulted in the closure of over 50 irrigation wells and a ban 
on  the  sale  of  agricultural  produce  and  shellfish  affected  by  the  spill.  Only  the 
emergency construction of barriers stopped most of the nearby Doñana National Park, a 
Natura  2000  and  World  Heritage  Site  and  Spain’s  largest  park,  from  being 
contaminated. The disaster had direct economic impacts on the agriculture and fishing 
industry, on the mining sector and on tourism in the region. Costs arising from the spill 
were substantial.  
  Source: Summary, based on the ELD Fund Study, p. 20, 21         

To better understand the baseline, in a first step, a general overview of the functioning of 
the ELD will be provided. Then, the objectives, principles and scope of the Directive will 
be  explained.  The  baseline  is  to  be  compared  with  the  practical  experience  in  the 
implementation of the ELD, mainly on the basis of the Member States' reports. 

2.2.1.   Overview on the functioning of the Environmental Liability Directive 

The ELD aims at ensuring that significant natural resource damage (harm to biodiversity, 
water or land) is restored to the condition which existed before the damage occurred. The 
economic  operator  who  caused  the  environmental  harm  has  to  take  the  necessary 
restoration  action  and  to  bear  the  costs.  Besides  the  restoration  of  damage  to  the 
environment, another important objective of the Directive is to prevent damage in case of 
an imminent threat that such damage will happen in the near future. The ELD provides 

7 

 
 
 
for the responsibility of an operator, based on the 'polluter-pays' principle: An operator is 
a  (natural  or  legal,  private  or  public)  person  who  operates  or  controls  the  damaging 
occupational (professional) activity. Operators who carry out certain – mostly industrial – 
activities potentially dangerous to the environment (listed in Annex III of the Directive) 
are liable according to the standard of strict liability, which means that no proof of fault 
(intent or negligence) is necessary. This makes the liability faster and more efficient. It is 
however  necessary  to  proof  that  the  operator  has  caused  the  damage  (causal  link).  In 
addition,  economic  operators,  other  than  those  carrying  out  the  listed  dangerous 
activities, are liable for the damage they caused to protected animal or plant species or to 
protected natural habitats (biodiversity damage) on the basis of fault. 

The  ELD  requires  that  the  damaged  environment  is  physically  reinstated.  This  is 
achieved  through  the  replacement  of  the  damaged  natural  resources  by  identical  or, 
where  appropriate,  equivalent  or  similar  natural  components  ('primary  remediation').  If 
measures  taken  on  the  affected  site  do  not  allow  achieving  the  return  to  the  baseline 
condition, 'complementary remediation' measures have to be taken elsewhere (preferably 
at  an  adjacent  site).  Finally,  'compensatory  remediation'  has  to  be  taken  to  compensate 
for the 'interim losses', i.e. loss resulting from the fact that the damaged natural resources 
are not able to perform their ecological functions or services after the damage until the 
environment  is  fully  restored.  Such  measures  consist  in  additional  improvement  of  the 
ecological structures and functions to compensate for the interim losses. 

The following graphics shows how remediation under the ELD is basically working. 

Figure 2: Anatomy of damage, source ELD training slides 

Source: ELD Training Handbook (2 days version), p. 13 

The liable operator must take the necessary preventive or remedial measures and bear the 
costs  thereof.  The  competent  authorities  play  a  major  role  within  the  administrative 
liability system of the ELD. They have to survey and enforce the environmental liability, 
in particular to identify the liable operator, to assess the significance and to approve or 
determine  the  remedial  measures.  The  third  key  player  in  the  system  is  civil  society. 
Natural  or  legal  persons  affected  by  environmental  damage  and  enabled  environmental 
NGOs  have  the  right  to  request  the  competent  authority  to  decide  on  an  instance  of 
observed environmental damage. 

8 

 
 
 
 
 
 
 
Figure 3: Overview on the functioning of the Directive, Source:  

Aim = 

To restore natural 
resource/service 
to baseline 
condition 

Biodi- 
versity 

Land

Water

NGOs and citizens
can request the 
competent 
authority to take 
action 

Liability is strict in case of 
dangerous activities 
listed in the Directive or 
fault-based (biodiversity 
damage) 

Liable operator pays for 
costs of preventive & 
remedial measures 
(polluter pays principle) 

Compensatory 
remediation: to 
compensate for the 
interim loss of natural 
resources/services 

Complementary 
remediation: to provide 
a similar level of natural 
resources/services 

Primary remediation: 
to restore the 
damaged natural 
resources/services

Competent authority: to 
enforce the Directive, identify 
the liable operator, assess the 
significance of damage, 
determine the remediation 

9 

 
 
 
 
 
 
 
2.2.2.   Objectives of the Environmental Liability Directive 

The  two  main  objectives  of  the  ELD  are  prevention  of  environmental  damage  in  case  of 
imminent  threat  of  damage  and  remediation  of  environmental  damage  if  it  has  already 
occurred. Environmental damage continues to create significant losses in natural resources in 
the  EU  every  year.  Some  of  these  losses  are  due  to  major  accidents  (for  example 
Doñana/Spain8,  Baia  Mare/Romania9,  Kolontár/Hungary10,  Moordijk/Netherlands11)  or  big 
scale pollution events. Other incidents are smaller but still significant. 

The purpose of the ELD is thus to contribute to the halting of biodiversity loss in the EU by 
2020 and to the improvement of the water quality of European freshwaters under the Water 
Framework Directive. This aim is pursued first by incentivising operators who typically carry 
out those hazardous activities which most frequently cause environmental damage, to take a 
more  effective  precautionary  approach  by  e.g.  establishing  an  environmental  management 
system,  environmental  safety  measures,  carrying  out  risk  assessments,  investing  in  risk 
abatement  technology  and  taking  out  sufficient  financial  security.  Second,  in  case  of 
imminent  threat  of  damage  or  actual  damage,  operators  are  liable  to  take  the  necessary 
preventive  or  remedial  action  and  to  bear  all  costs,  i.e.  to  internalise  the  external 
environmental  costs  so  that  neither  the  public  pays  for  the  damage  nor  the  damage  remains 
un-remedied. 

The  liable  operator  must  take  the  necessary  preventive  or  remedial  measures  and  bear  the 
costs thereof. Operators should therefore have sufficient financial capacity to cover the costs 
which  may  arise  due  to  their  potential  liability  for  environmental  damage.  The  ELD  does 
however  not  establish  a  system  of  mandatory  financial  security  at  EU  level  but  leaves  this 
decision to the Member States. Around one third of the MS have established or are about to 
establish  such  mandatory  financial  security  schemes  at  national  level  and  two  thirds  of  the 
Member States rely on voluntary instruments and market developments. 

The ELD targets only pollution which is significant, measurable and can be traced back to an 
identifiable  polluter.12  A  liability  instrument  would  face  challenges  in  tackling  so  called 
diffuse pollution, caused by multiple polluters whose share cannot be calculated or estimated, 
as e.g. is the case with air pollution due to car traffic or household heating. For the latter type 
of pollution, other instruments are available, as e.g. environmental taxes or charges. 

8 See box 1 above. 

9 At the end of January 2000 near Baia Mare, Romania a dam holding waters from the gold mining activities by the Aurul company burst 
and  100,000  cubic  metres  of  cyanide-contaminated  water  spilled  over  to  farmland  and  into  the  Someș  river.  The  waters  polluted  by 
cyanide and heavy metals eventually reached the Tisza and then the Danube, killing large numbers of wildlife (foxes, otters, ospreys etc.) 
and fish in particular in Hungary and Serbia (80% of aquatic life) and had a long-lasting negative impact on the environment. There was no 
adequate remediation of the damaged natural resources to their baseline condition. 

10 The Ajka alumina sludge spill was an industrial accident at a caustic waste reservoir chain of the Ajkai Timföldgyár alumina plant in Ajka, 
Veszprém  County,  in  western  Hungary.  On  4  October  2010,  the  north-western  corner  of  the  dam  of  reservoir  no. 10  collapsed,  freeing 
approximately one million cubic metres (35 million cubic feet) of liquid waste from red mud lakes. The mud was released as a 1–2 m (3–
7 ft) wave, flooding several nearby localities, including the village of Kolontár and the town of Dececser. Ten people died, and 150 people 
were injured. About 40 square kilometres of land were initially affected. The waste extinguished all life in the Marcal river. 

11 A major fire at the firm ChemiePack, which resulted in damage to the soil, surface water and groundwater due to pollution of the water 
used to put out the fire. The activity causing the damage is covered by Annex III (7) of the ELD, as dangerous substances were stored and 
packaged. 

12 Articles 2(1), (2) and 4(5) ELD, also Article 11(2) ELD. 

10 

 
 
 
                                                            
2.2.3.  The Polluter-Pays Principle 

The ELD establishes a framework based on the polluter pays principle (PPP) to prevent and 
remedy  damages  on  certain  environmental  media.  Article  191(2)  TFEU  provides  that  the 
Union  policy  on  environment  shall  be  based  on the  principle  that  the  polluter  should  pay13. 
The PPP is one of the main principles guiding EU environmental law and policy. Economic 
activities  often  create  emissions  discharged  into  air,  soil  or  water  and  having  a  detrimental 
effect on flora and fauna or human health; this is what is often referred as 'external effects' of 
an  activity.  On  a  macroeconomic  level,  the  question  arises  whether  the  public  or  a  specific 
person or group of persons have to bear the costs of preventing and remedying the costs of 
such environmental damages. If the costs are attributed to the person responsible, the 'external 
effects' are considered to be internalized. This is what the 'polluter-pays principle' is aiming 
for.  If  the  costs  are,  however,  born  by  the  public,  a  'community-pays'  system  is 
implemented.14  More  background  information  on  the  economic  principles  of  cost  allocation 
for environmental damage can be found in the Annex on the 'polluter-pays principle'. 
The ELD implements not only the polluter-pays principle expressly invoked by its Article 1,15 
but  also  the  other  environmental  principles  enshrined  in  Article  191(2)  TFEU,  namely  the 
precautionary  principle16,  the  preventive  principle17  and  the  principle  that  environmental 
damage should as a priority be rectified at source (primary remediation)18. 

2.2.4.  The Liability Scope and Standard of the ELD 

The material, personal, temporal and territorial scope of application is crucial for the degree 
of  internalization  of  external  effects  and  thereby  for  the  effectiveness  and  efficiency  of  the 
ELD.  The  scope  of  application  of  the  ELD  answers  the  questions  who  can  be  held  liable 
(personal  scope),  for  what  type  of  damage  (material  scope:  environmental  or  traditional 
damage), within which geographical ambit or area (territorial scope), and within which time 
(temporal scope). The standard of liability (strict or fault-based) and the treatment of multi-
party liability are also basic elements of each liability system which will be briefly presented 
below for the ELD. 

Material scope – Environmental damage vs. traditional damage: 

Traditional  damage  or  third-party  damage  is  caused  to  persons  as  victims  resulting  from  an 
activity. This old concept of tort law consists in three categories: damage to property, bodily 

13 See footnote 6 above. 

14 Opposed to the polluter-pays principle is the beneficiary-pays principle attributing the costs to the persons benefitting from the intact 
environment (a certain group interested in the conservation of a certain environment) or the general public which would be tantamount 
to the community-pays principle: the costs of a certain polluting activity are socialised (which is what is happening most often in reality, 
including  under  the  ELD  for  the  non-significant  environmental  damage).  Another  cost  allocation  principle  is  the  ability-to-pay  principle 
according to which the costs are allocated according to the economic capacities of the payers.   

15 "The purpose of this Directive is to establish a framework of environmental liability based on the 'polluter-pays' principle, to prevent and 
remedy environmental damage." 

16 See the incentivising role of the internalisation of damage costs (PPP) and in particular Article 14 ELD (Financial security) 

17 See in particular Article 5 ELD (Preventive action). 

18 See in particular Article 6 (Remedial action) and Annex II ELD (Remedying of environmental damage). 

11 

 
 
 
                                                            
injury  (health  damage)  including  loss  of  life,  and  economic  loss  (comprehending 
consequential or even pure economic loss19). 

In  contrast,  the  pure  environmental  or  ecological  damage,  which  is  the  subject  of  the  ELD, 
concerns  the  environment  as  such  without  any  person  needed  to  have  suffered  damage  or 
losses. This rather novel legal concept makes the owned as well as the un-owned environment 
(the  'common  good')  the  victim  of  damaging  activities.  As  'the  environment'  cannot  raise 
claims,  it  needs  a  'trustee'  to  act  on  its  behalf.  Under  the  ELD,  this  is  the  public  authority 
responsible  for  the  protection  of  environment,  with  civil  society  (affected  persons  including 
entitled  environmental  NGOs)  enabled  to  request  decisions  by  the  competent  authorities  on 
remedial actions in case of observed environmental damage.20 

The material scope of the ELD is defined by the three categories of 'environmental damage': 
'protected species and natural habitats', 'water' and 'land' (called altogether 'natural resources'). 
As regards protected species and natural habitats, the legal definitions of the ELD refer to the 
Birds Directive (2009/147/EC)21 and the Habitats Directive (92/43/EEC)22. For water damage, 
the  ELD  refers  to  the  waters  covered  by  the  Water  Framework  Directive  (2000/60/EC)23, 
including groundwater, surface water, transitional waters and coastal waters, as well as marine 
waters covered by the Marine Strategy Framework Directive (2008/56/EC)24. The term "land" 
in contrast is not further defined in the ELD, neither explicitly nor indirectly via reference to 
EU legislation. 

The  application  of  the  ELD  is  not  triggered  by  just  any  impairment  of  these  three  natural 
resources,  but  only  if  certain  thresholds  are  exceeded.  Article  2,  letter  (a)  ELD  specifies 
damage  to  protected  species  and  natural  habitats25,  letter  (b)  specifies  water  damage26  and 

19 A civil or third-party liability system acknowledging only consequential economic loss limits the scope of economic loss to such damage 
suffered  as  a  consequence  of  other  traditional  damage  (damage  to  property  or  bodily  harm)  while  the  concept  of  pure  economic  loss 
allows also claims for economic loss suffered without such a link, for example loss of income to fishermen as a consequence of damage to 
fish populations. 

20 There are however overlaps between 'traditional' and 'environmental' damage in particular as far as 'pollution' damage is concerned. 
International  conventions,  notably  those  included  in  Annex  IV  of  the  ELD,  contain  a  definition  of  'pollution  damage'  that  covers  also 
damage to the environment and the cost of any preventive measures taken to address the threat of such damage. Claimants under the 
conventions  may  include  the  State  or  local  communities,  who  have  taken  such  measures  for  the  reinstatement  of  the  environment  – 
including  biodiversity  –  in  an  area  falling  within  their  territorial  waters  and  the  EEZ,  or  for  any  relevant  preventive  measures  wherever 
taken.  The  notion  of  'pollution  damage'  under  these  conventions  transcends  the  distinction  between  'traditional'  and  'environmental' 
damage. 

21 Directive 2009/147/EC on the conservation of wild birds, OJ L 20, 26.1.2010, p.7 . 

22 Council Directive 92/43/EEC on the conservation of natural habitats and of wild fauna and flora, OJ L 206, 22.7.1992, p. 7. 

23 Directive 2000/60/EC establishing a framework for Community action in the field of water policy, OJ L 327, 22.12.2000, p. 1. 

24 Directive 2008/56/EC establishing a framework for community action in the field of marine environmental policy, OJ L 164, 25.6.2008, p. 
19. 

25  "…  damage  to  protected  species  and  natural  habitats,  which  is  any  damage  that  has  significant  adverse  effects  on  reaching  or 
maintaining the favourable conservation status of such habitats or species." (Article 2(1)(a) ELD). 

26 "any damage that significantly adversely affects: (i) the ecological, chemical or quantitative status or the ecological potential, as defined 
in Directive 2000/60/EC, of the waters concerned; … or (ii) the environmental status of the marine waters concerned, as defined in Directive 
2008/56/EC" (Article 2(1)(b) ELD). 'Deterioration of the status' under the Water Framework Directive (WFD) has recently been the subject 
C-461/13): 
of 
http://curia.europa.eu/juris/document/document.jsf?text=&docid=165446&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1
&cid=175744. 

judgment 

Justice 

recent 

Court 

case 

(see 

the 

by 

of 

a 

12 

 
 
                                                            
letter (c) land damage27. Also, the obligation to take preventive measures pursuant to the ELD 
is only triggered when it is likely that a non-action would result in a significant environmental 
damage.  However,  in  application  of  the  precautionary  principle,  scientific  certainty  that  the 
potential  damage  will  exceed  the  significance  threshold  is  not  required,  a  reasonable  belief 
would be sufficient.28 

Box 2: ELD case example how the Directive is applied 

On  or  about  2  July  2009,  crude  sewage  was  discharged  for  several  hours  into  the  "Three 
Pools" waterway at Crossens (United Kingdom), following the failure of foul water pumps 
at the Crowland Street pumping station. This resulted in a release of raw sewage effluent 
into surface water which impacted the biological quality of the water. The spill caused the 
death of over 6,000 fish in a 5 km stretch of the river. Based on the reasonable grounds that 
an  environmental  damage  may  have  been  caused,  the  competent  authority  assessed  the 
damage under the Environmental Damage (Prevention and Remediation) Regulations 2009 
(hereinafter  "the  EDR"),  the  ELD  transposing  legislation.  The  authority  determined  that 
environmental damage to surface water had occurred pursuant to Regulation 4 of the EDR 
because  the  biological  quality  element  for  fish  had  dropped  from  good  to  poor,  changing 
sufficiently  to  lower  the  status  of  the  water  body  within  the  meaning  of  the  Water 
Framework Directive (2000/60/EC).29 

Therefore,  on  2  December  2009,  the  authority  served  a  Notification  of  Liability  on  the 
operator,  requiring  him  to  propose  measures  for  the  remediation  of  the  damage  by  5 
February 2010. The operator agreed to let the authority propose remediation measures on its 
behalf. Subsequently, the authority developed and consulted on options for remediation of 
the damage in accordance with the requirements of the EDR which are more stringent than 
those set forth under the Water Resources Act 1991. Pursuant to Regulation 20 of the EDR, 
the operator has to carry out primary as well as compensatory remediation to compensate 
for the interim loss of resources or services pending full recovery. On 7 October 2011, the 
authority  served  a  Remediation  Notice  under  the  EDR  on  the  Operator,  ordering  it  to 
restock  the  river  with  fish  (primary  remediation)  and  to  carry  out  habitat  and  access 
improvements  to  compensate  for  the  loss  of  angling  services  due  to  the  damaged  aquatic 
environment (compensatory remediation).30 

Source: ELD Implementation Study, Annex 1, p. 13, slightly adapted and shortened 

Personal scope – Liable person: 

27  "any  land  contamination  that  creates  a  significant  risk  of  human  health  being  adversely  affected  as  a  result  of  the  direct  or  indirect 
introduction, in, on or under land, of substances, preparations, organisms or micro-organisms" (Article 2(1)(c) ELD). 

28  See  for  example  the  English  Environmental  Damage  Regulation  13(1)  which  provides:  "An  operator  of  an  activity  that  causes  an 
imminent threat of environmental damage, or an imminent threat of damage which there are reasonable grounds to believe will become 
environmental damage, must immediately (a) take all practicable steps to prevent the damage;" 
29 Please note that pursuant to case C-461/13 (the Weser ruling), the fact that the biological quality element for fish had dropped from 
good to poor would be sufficient to qualify as a 'deterioration of the status', notwithstanding whether it changed sufficiently to lower the 
(overall) status of a water body pursuant to Directive 2000/60/EC. 

30 Case study taken from the ELD Implementation Study 2013, Annex, Part B, slightly shortened and adapted. 

13 

 
 
 
 
 
                                                                                                                                                                                         
 
The persons liable to prevent and to remedy environmental damage and to bear the costs for it 
under the ELD are those who have caused the imminent threat or the actual damage through 
their  occupational  activities  (first  level-channelling  of  liability  to  occupational/professional 
activities). An activity is "occupational" when it is carried out in the course of an economic 
activity, a business or undertaking, irrespectively of its private or public, profit or non-profit 
character. 

On  a  secondary  basis,  a  third  party  who  has  caused  the  damage  despite  appropriate  safety 
measures of the strictly liable operator have been in place, or a public authority who has given 
a  compulsory  order  which  led  to  the  damage  are  financially  liable  for  the  preventive  or 
remedial action to be taken by the liable operator in case the latter has successfully invoked a 
defence under Article 8(3) of the ELD. A further secondary liability of additional responsible 
parties (e.g. landowners, successor in rights) is possible under Article 16(1) ELD if a Member 
State so decides and it is compatible with the Treaties, in particular if the ELD requirements 
are complied with (causality, no liable operator)31. 

Standard of liability – Strict and fault-based: 

The ELD contains two standards of liability. The liability standard is strict (faster to establish) 
for environmental damage (damage to biodiversity, water and land) if caused by one or more 
of the dangerous activities listed in its Annex III. Article 3(1)(b) ELD establishes in addition a 
fault-based  standard  of  liability  for  an  imminent  threat  or  damage  to  protected  species  or 
natural habitats for operators pursuing an occupational activity which is not listed in Annex 
III ELD. 

The legal design of the liability rules and the standard of liability in particular is crucial for 
the  extent  of  internalization,  hence  for  efficiency.  A  strict  liability  system  (which  does  not 
require any form of culpability) represents the polluter-pays principle more adequately and is 
commonly regarded as highly effective to its aims if it is strictly enforced and not undermined 
by too many exceptions and defences. 

Multi-party liability – joint & several vs. proportionate liability: 

The liability scope in case of multi-party causation of environmental damage (i.e. if more than 
one person contributes to the damage) could range from joint and several liability, where each 
polluter,  who  has  contributed  to  causing  the  damage,  is  liable  for  the  prevention  or 
remediation of the full damage to a proportionate system of liability where the judge or the 
authority determines the share of liability of each polluter. The ELD does not take a decision 
but leaves it up to the Member States.32 Joint and several liability is commonly regarded more 
effective  while  a  proportionate  system  has  the  fairness  argument  on  its  side.  Most  Member 
States apply joint and several liability or a mitigated/combined joint and several liability.33    

Temporal scope: 

31 Judgment of the Court of Justice of the European Union of 4 May 2015 in Case C-534/13, paragraphs 59-62. 

32  "This  Directive  is  without  prejudice  to  any  provisions  of  national  regulations  concerning  cost  allocation  in  cases  of  multiple  party 
causation especially concerning the apportionment of liability between the producer and the user of a product." (Article 9 ELD). 

33 Only Denmark, Finland, France and Slovakia opted for proportionate liability in the ELD context. 

14 

 
 
 
 
                                                            
Unlike  some  other  liability  laws34,  the  Environmental  Liability  Directive  does  not  establish 
retroactive  liability.  The  Directive  does  neither  apply  to  damages  caused  by  an  emission, 
event or incident that took place before the 30th of April 2007, nor to an emission, event or 
incident subsequent to this date when they derive from an activity that took place and finished 
before the deadline for the transposition in the Member States (30th of April 2007), nor to a 
damage caused by an emission, event or incident that took place more than 30 years ago. This 
limitation of the temporal scope of the ELD implicates that remediation of pollution stemming 
from  the  time  before  the  entry  into  application  of  the  ELD  may  be  treated  under  any 
previously existing national regime.35 

Territorial scope: 

The  territorial  application  of  ELD  applies  to  the  geographical  extent  where  Member  States 
exercise  jurisdiction  (land  territories,  water  damage  not  only  in  the  coastal  and  territorial 
waters  but  also  in  the  exclusive  economic  zone  and  the  continental  shelf  where  Member 
States  apply  jurisdiction36).  According  to  Article  52  TEU,  EU  law  applies  to  the  European 
territories of the Member States and to certain overseas territories and islands as specified in 
Article 355 TFEU. Environmental damages occurring, for example, on the Saint-Martin, the 
Azores or Madeira Islands, have to be remedied according to the ELD, but for those occurring 
at the Faeroe Islands, the genuine national law is decisive. 

3.  EVALUATION QUESTIONS 

The key evaluation questions for this exercise can be summarised as: 

Relevance: 

Are the objectives of the Directive still relevant (i.e. do they still match current needs) 

• 
and are key problems still properly addressed? 

Effectiveness: 

• 

What progress have Member States made over time towards achieving the objectives 
set  out  in  the  Directive?  And  does  the  Directive  lead  to  a  level  playing  field  in  terms  of 
preventing and remedying environmental damage across the EU? 

Has  the  current  scope  of  the  Directive  worked  out  to  be  right  in  meeting  practical 

• 
demands? 

Efficiency: 

• 

What  are  the  costs  and  benefits  (monetary  and  non-monetary)  associated  with 

compliance with the Directive in the Member States and in the EU? 

34  For  instance  the  US  federal  environmental  liability  legislation  pursuant  to  CERCLA  (Comprehensive  Environmental  Response, 
Compensation, and Liability Act) establishes retrospective liability for clean-up costs. 

35 In addition to this absolute time limitation, there is a relative limitation in temporal application of the ELD which enables the competent 
authority within five years after completion of the preventive  or  remedial measures or the identification of the liable operator or third 
party to initiate cost recovery proceedings in case the competent authority has taken the preventive or remedial action (Article 10 ELD). 

36 See for water damage in particular the ELD amendment through Directive 2013/30/EU on safety of offshore oil and gas operations and 
amending Directive 2004/35/EC, OJ L 178, 28.6.2013, p. 66 (Article 38). 

15 

 
 
 
                                                            
• 

Is  there  evidence  that  the  Directive  has caused  unnecessary  administrative  burden? 

Can any costs be identified that are out of proportion with the benefits achieved? 

Coherence: 

• 

To what extent is the Directive satisfactorily integrated and coherent with other parts 

of EU environmental law/policy? 

• 
Are  there  overlaps,  gaps  and/or  inconsistencies  that  significantly  hamper  the 
achievements of the objectives and to what extent is the Directive consistent with the Habitats 
Directive? 

Complementarity: 

To  what  extent  does  the  ELD  support  and  usefully  supplement  other  instruments  or 

• 
policies? 

EU-added value: 

• 
What has been the EU added value?, i.e. what has been the practical significance of 
the  Directive  as  compared  to  (pre-)  existing  national  legislation  and  what  would  likely 
happen if EU action were repealed? 

4.  METHOD/PROCESS FOLLOWED 

4.1. 

Process/Methodology 

The  evaluation  started  in  2012.  The  work  took  longer  due  to  the  delayed  arrival  of  several 
Member State reports (the last ones received in December 2013 with translation in January 
2014  completed),  and  the  slightly  delayed  completion  of  the  ELD  evaluation  studies  (by 
March 2014). Where possible, the present evaluation and how it is being reported is aligned 
with the Better Regulation guidelines of 19 May 2015. 

The  evaluation  is  mainly  based  on  the  information  and  data  provided  in  the  27  national 
application  reports  of  the  Member  States37  under  Article  18(1)  ELD.  The  studies  are 
summarised  horizontally  according  to  the  main  trends  and  features  and  the  reports  are 
summarised vertically per Member State in two Annexes to this REFIT evaluation. They are 
also  available  in  English  translation  of  the  originals  on  the  Commission  liability  website: 
http://ec.europa.eu/environment/legal/liability/index.htm 

 A major source of the evaluation provided the two implementation studies of 2012/2013 and 
the  three  evaluation  studies  of  2013/14.  These  studies  are  summarised  in  an  Annex  to  this 
REFIT  evaluation  and  are  as  well  available  at  the  aforementioned  environmental  liability 
website.  The  studies  investigated  the  main  questions  guided  by  the  evaluation  criteria,  in 
particular as regards effectiveness, coherence and EU-added value.  

Information drawn from experts and stakeholders complete the overall information sources.38 

37 Croatia accessed to the EU on 1 July 2013 and has not yet been a member of the EU at the time of the deadline set for the submission of 
the national ELD reports (30 April 2013). 

38 This covers comments and feedback gathered in meetings with ELD Member States' experts, in particular the 11th, 12th, 13th, 14th and 
15th meetings of 30th May 2012, 15th January 2013, 10th June 2013, 3rd February 2014 and 13th May 2015, and in the three ELD stakeholder 

16 

 
 
 
 
                                                            
In  addition,  information  from  financial  security  providers,39  from  industry,40  and  from 
environmental NGOs or interest groups41 were taken into account. The permanent exchange 
with  experts  and  stakeholders,  including  their  consultation  in  all  ELD  studies  and  their 
involvement in the ELD information and training material, is an indispensable contribution to 
the development of the ELD implementation. 

There  was  no  formal  public  internet  consultation  of  twelve  weeks,  but  stakeholders  had  the 
above mentioned opportunities to consider the implementation and evaluation of the ELD and 
to express views. 

4.2.  Limitations – robustness of findings 

Information  and  data  provided  in  the  MS  reports  2013  varies  considerably.  While  some 
Member States submitted detailed and well-structured information, others provided much less 
information. The length of the reports differed between half a page and more than 60 pages. 
Several  Member  States  provided  only  narrative  reports,  some  MS  only  tables,  and  others  a 
combination of a written report and a table.  

Overall the Commission did not receive from all MS all the information sought or needed for 
a  complete  assessment  and  while  some  MS  have  supplemented  the  data  upon  extra  request 
from  the  Commission,  the  situation  remains  partly  incomplete  for  others.  However,  the 
obtained information appears in general sufficient to provide an overview, as is shown in the 
chapter on implementation. One of the significant information shortcomings concern data on 
costs, in particular on administrative costs. Only a few MS have provided seemingly reliable 
data in this respect, some more have provided at least illustrative information but the majority 
nothing. This part of the information was to be submitted by Member States however only on 
a voluntary basis according to Annex VI ELD42. 

The  robustness  of  the  findings  may  be  challenged  in  some  respects:  First,  despite  the 
common  interpretative  guidance  on  the  reporting,  MS  may  have  had  a  different 
understanding of some terms, or use from the outset different systems e.g. for the calculation 
of  costs.  While  for  example  Hungary  provided  that  the  Directive  did  not  cause  additional 
administrative  costs  for  their  total  573  ELD  cases,  the  United  Kingdom  found  that  the 
Directive  could  become  onerous  if  it  exceeded  the  number  of  cases  they  have  experienced 
(which is 19 in the reporting period), based on the national interpretation of the 'significance 
threshold'. Most of the MS remained quiet in this respect. 

conferences  of  8th  November  2011,  11th  June  of  2013  and  26th  November  2014.  Information  on  these  meetings  is  available  on: 
http://ec.europa.eu/environment/legal/liability/eld_meetings.htm 

39 In particular surveys carried out by Insurance Europe, and feedback from some national insurance associations. 

40 Surveys and papers from the Ad-Hoc Natural Resource Management Group and from CEFIC, information on environmental claims dealt 
with by the IOPC Funds, information by the 'International Group of P & I Clubs' and ITOPF on shipping incidents covered by the Clubs in the 
reporting period 2007-2013, input from the ship owners associations. 

41 In particular from Justice and Environment, Client Earth and the CPMR. 

42 Annex VI ELD lists all the information and data to be submitted by Member States according to Article 18(1) of the Directive. The first 
five  numbers  cover  the  mandatory  information  and  data,  the  last  three  numbers  contain  the  voluntary  information  and  data.  The 
Commission agreed with the ELD government experts of the MS a 'non-binding guidance document for the reporting' which helped in the 
sense that several MS sent also voluntary data and information, even beyond those listed in Annex VI, but could despite all efforts not 
ensure that the overall submitted information was complete and coherent. 

17 

 
 
                                                                                                                                                                                         
The overall finding from the submitted information and data confirmed the conclusion from 
the  previous  Commission  report  on  the  ELD  of  October  2010  of  a  significant  variance 
between  Member  States.  Despite  the  efforts  undertaken  so  far  by  the  Commission  and  the 
stakeholder  groups  to  create  a  better  level  field  by  non-legislative  measures,  not  only  the 
transposition of this framework directive but also the implementation still varies greatly. This 
is the reason why the topic of the remaining 'patchwork' situation as regards environmental 
liability was broadly discussed in several of the ELD implementation and evaluation studies. 

Therefore,  despite  more  efforts  to  step  up  implementation  and  create  a  better  level  playing 
field, more transparency and complete data about ELD instances, as well as on environmental 
damage instances which are not treated under the ELD transposing legislation in the Member 
States but by other national legislation, would be necessary to assess the effectiveness of the 
Directive  in  an  unbiased  manner  (as  such  other  national legislation is often  used  instead  of 
the ELD). As the above comparison between the United Kingdom and Hungary shows, the 
approach  towards  the  use  of  the  ELD  varies  greatly.  The  factors  of  the  different  use  are 
multiple  but  as  the  most  important  ones  could  be  identified  the  use  of  other  national 
legislation instead of the ELD, based on the justification that the damage remains below the 
significance threshold. 

This significant data gap brings a potential bias into the evaluation and in order to improve 
the  quality  of  the  next  REFIT  evaluation,  the  aforementioned  additional  data  would  be 
necessary to examine the overall effect of the Directive in relation to the total environmental 
damage caused. This would however require  a long term planning and an agreement by all 
Member States and stakeholders to jointly work on it for the benefit of regulatory monitoring 
and  better  implementation  and  regulation.  The  costs  of  such  monitoring  must  be  carefully 
weighed  against  the  environmental  benefits.  It  follows  from  the  ELD  studies,  in  particular 
from  the  ELD  implementation  Study  and  the  Legal  analysis  Study,  that  a  complete  and 
transparent ELD case register, as is already established by at least one third of the Member 
States,  could  enhance  significantly  the  necessary  information  platform  for  the  exchange  of 
ELD-relevant  data.  Not  only  the  Commission,  but  all  Member  States  and  the  insurance 
sector,  industrial  operators  and  environmental  NGOs  could  benefit  from  such  an  EU  data 
base for private and public decisions. 

5.  TRANSPOSITION  AND  IMPLEMENTATION  OF  THE  ENVIRONMENTAL 

LIABILITY DIRECTIVE (STATE OF PLAY) 

There is a difference between transposition and implementation. Transposition is the formal 
act of translating Directives addressed to Member States into national law, i.e. integrating the 
Directive into the national legal system in order to render the Directive effective. A Directive 
is  binding  as  to  the  result  to  be  achieved  but  leaves  the  form  and  methods  to  the  Member 
States (Article 288 TFEU). Implementation describes all the measures giving practical effect 
to  the  transposed  legislation  (application,  enforcement,  inspections,  awareness  raising, 
information,  guidance,  training,  etc.).  It  is  sometimes  also  used  as  broad  term  covering 
transposition and all application aspects. 

5.1. 

 Transposition of the ELD 

Communication of transposition: 

The  Directive  was  to  be  transposed  by  30  April  2007  but  only  four  Member  States  met  the 
deadline  (Italy,  Latvia,  Lithuania  and  Hungary).  Consequently,  the  Commission  opened 

18 

 
 
   
 
 
infringement  procedures  against  23  Member  States,  issued  16  Reasoned  Opinions  and 
referred  nine  Member  States  to  the  Court  of  Justice  of  the  European  Union  (CJEU).  The 
CJEU decided in 2008 and 2009 that seven Member States had not communicated on time the 
measures  to  transpose  the  Directive  into  national  law43.  The  last  piece  of  transposing 
legislation was communicated in 2010. 

The  Directive  does  not  contain  specific  measures  to  be  implemented  by  certain  deadlines 
except the designation of the competent authorities by the date of transposition44, which does 
not mean that the Directive was completely implemented by that time, as its full effectiveness 
depends on several conditions and factors. The most important are: 

•  Designation of competent authorities by the time of the transposition (Article 11(1) ELD): 
All  Member  States  have  designated  competent  authorities  which  are  in  charge  of 
determining  significant  environmental  damage,  establishing  the  causal  link,  identifying 
the  liable  operators,  deciding  in  cooperation  with  the  liable  operators  the  remedial 
measures  and  approving  the  remediation  plan  of  the  operator,  as  well  as  executing  and 
overseeing  the  required  application  of  the  prevention  and  remedial  action  and  the  cost 
reimbursement provisions. 

•  Establishment  of  financial  security  instruments  and  markets  (Article  14(1)  ELD):  While 
the Directive acknowledges that liability without appropriate financial security is doomed 
to  be  ineffective45,  it  did  not  choose  to  set  up  the  establishment  of  mandatory  financial 
security  at  EU  level.  It  required  Member  States  instead  to  "take  measures  to  encourage 
the development of financial security instruments and markets" including the decision as 
to whether mandatory financial security should be established at national level. One third 
of them have either so far established mandatory financial security on a legal basis or are 
working  on  it.  The  other  two  thirds  decided  to  let  the  market  itself  develop  adequate 
instruments. 

•  Member  States  have  to  provide  since  the  entry  into  application  of  the  Directive  for  the 
economic valuation of a damage which occurred, and have to apply the remediation types 
and  techniques  as  required  by  Annex  II  ELD.  The  extent  to  which  the  Member  States 
implemented these provisions depended also on the existing administrative structures and 
resources,  on  the  already  achieved  practical  experience,  and  on  the  respective 
arrangements between authorities, stakeholders and practitioners. This is one of the core 
elements  and  probably  the  biggest  novelty  brought  by  the  ELD.  Without  functioning 
instruments  and  available  resources,  the  remediation  measures  cannot  properly  be 
determined, designed and implemented. 

Conformity of transposition: 

The  conformity  of  the  transposed  legislation  means  that  the  national  law  is  correctly  and 
completely  covering  the  requirements  addressed  to  the  Member  States  in  the  Directive.  For 
example, rights conveyed to citizens or business, as well as obligations imposed on them have 
to  be  clearly  transformed  into  domestic  law  in  compliance  with  the  provisions  in  the 
Directive. Noncompliant legal transposition risks that the objectives of the Directive will not 

43 France, Finland, Slovenia, Luxembourg, Greece, Austria and the United Kingdom. 

44 The designation of the competent authorities is mostly integrated in the transposing legislation. 

45 Article 14(1) ELD. 

19 

 
 
 
 
 
 
                                                            
be achieved. It is therefore with priority that the Commission examines the conformity of the 
transposition in order to ensure at an early time a level playing field and the functionality and 
effectiveness of a Directive. 

The Commission has in the last years assessed the conformity of the transposing legislation of 
the  27  Member  States  covered  by  the  report.  It  has  opened  further  investigations  in  several 
cases,  some  still  ongoing.  In  six  Member  States,  legislation  was  completely  conform,  while 
more  than  20  Member  States  had  some  non-conformities,  15  of  which  have  been  solved  so 
far.     

The aforementioned (potential) non-conformities related to virtually all provisions in the ELD 
which  needed  to  be  transposed  (not  all  must  be  transposed46).  The  provisions  of  the  ELD 
which were most often invoked by the Commission in the bilateral meetings as a result of the 
conformity  assessments  concern:  Articles  2  (Definitions),  4  (Exceptions),  8  (Prevention  and 
remediation  costs)  and  12  (Request  for  action)  as  well  as  Annexes  II  (Remedying  of 
environmental  damage)  and  III  (Activities  referred  to  in  Article  3.1).  In  all  cases  so  far, 
Member States' authorities could either satisfactorily answer and explain or have rectified the 
ELD non-conformities, but the exercise is not yet completed. 

The  Commission  pursued  the  method  of  a  bilateral  dialogue  with  the  Member  State, 
discussing the potential non-conformities including points for clarification together with other 
implementation-relevant topics, such as on general implementation (challenges and obstacles, 
numbers of cases, awareness of and communication with stakeholders, etc.) on remediation of 
environmental damage (methods and categories, information/guidance/training tools or needs, 
etc.),  and  on  financial  security  (available  financial  security  instruments  and  options, 
development and experience, risk assessment, etc.). Where the problems could not be clarified 
within this framework bilateral investigations were opened. 

It would appear in general that identified problems regarding the effective application of the 
Directive  are  often  not  related  with  the  transposition.  There  are  examples  where  Member 
States  with  better  implementation  of  the  ELD  have  also  more  non-conformity  issues. 
However, 
related  with  better 
implementation  record)  can  also  not  be  verified.  Only  few  complaints  regarding  bad 
application of the Directive have reached the Commission. Apart from some initial inquiries, 
the Commission has so far not opened any formal investigations regarding the bad application 
of the Directive on the basis of citizen's complaints. 

the  opposite  correlation 

(higher  non-conformities 

Quality of transposition: 

The quality of the transposition varies widely, as well as the type and method: Single laws, 
sometimes reproducing the ELD, are the most common, but in several instances such specific 
national  ELD  transposing  laws  are  supplemented  by  legislative  amendments  to  existing 
material laws, mainly regarding nature protection, water management and soil protection. The 
integration of the transposition into the existing national frameworks is in any case crucial for 
the transposition and effectiveness of the Directive. 

46  This  is  for  instance  the  case  for  provisions  which  require  a  direct  action  by  the  Member  States  (such  as  a  reporting  obligation),  or 
address the Commission, or are by nature clarifications (e.g. on the relationship with other applicable law). 

20 

 
 
 
 
 
 
 
 
 
                                                            
Therefore, the Legal Analysis studies mentioned above and summarised in the Annex on ELD 
studies investigated this question extensively. As overall conclusion can be drawn that most 
Member States transposed the ELD fairly faithfully, sometimes even in a "copy/paste"-style, 
which may entail risks of not fitting well into the existing legal frameworks, hence suffering 
more in the application under the competition of similar pre-existing national legislation than 
well integrated transposing provisions. 

There  are  also  Member  States  with  well-considered  integration  of  the  Directive  into  a 
multitude of existing material laws. And nearly all Member States have transposed large parts 
of the Directive, such as technical annexes, in quite a literal manner. 

6.2. Implementation of the ELD 

The  following  overview  of  the  implementation  of  the  ELD,  follows  largely  the  national 
reports submitted by the Member States to the Commission on the experience gained in the 
application  of  the  Directive  between  30  April  2007  and  30  April  2013  according  to  Article 
18(1) in conjunction with Annex VI(1) ELD. Member States were required to report on the 
type  of  environmental  damage,  the  date  of  its  occurrence  and/or  discovery  and  the  date  on 
which proceedings were initiated under the ELD. The requirements were specified in a non-
binding guideline prepared with the government experts as follows: 

(cid:131)  "Type of environmental damage" refers to the three categories of environmental damage 
as specified in Article 2(1) ELD: damage to protected species and natural habitats; water 
damage;  land  damage.  The  Member  States  were  asked  to  report  on  confirmed  damage 
incidents,  therefore  on  cases  treated  as  environmental  damage  cases  by  the  liable 
operators and/or competent authorities according to the requirements of the ELD. 

(cid:131)  "Date of its occurrence" refers to the date when the event, incident or emission causing 

the damage occurred. 

(cid:131)  "Date of its (…) discovery" refers to the date when the damage has been discovered by 

any person (private person, operator, authority, etc.). 

(cid:131)  "Date  on  which  proceedings  were  initiated  under  the  ELD"  refers  to  the  date  when 

remedial action was commenced. 

The  focus  of  the  Member  State  reports  is  on  environmental  damages  and  the  measures  to 
remediate  them.  Incidences  of  imminent  threat  of  environmental  damage  and  the 
implementation  of  preventive  measures  remained  formally  outside  of  the  reporting  scope. 
This means that the numbers of imminent threat incidents as disclosed by the Member States 
in their Article 18(1) ELD-reports is not necessarily tantamount to the actual number of cases 
treated  under  the  national  law  transposing  the  ELD.  Thus,  the  exact  number  of  incidents 
causing  an  imminent  threat  of  an  environmental  damage  is  due  to  the  narrow  scope  of  the 
reporting duty not known by the Commission. 

The  abovementioned  guidelines  were  of  non-binding  character;  the  Member  State  reports 
contained  therefore  sometimes  additional  information.  The  Commission  received  hence 
partially  also  information  on  cases  of  imminent  threat  and  on  other  details  of  the 
administrative  procedure.  Although  just  of  indicative  character,  this  information  is  also 
included as much as available, in the present ELD report.  

Number of cases handled under national law implementing the ELD: 

21 

 
 
 
 
 
 
 
Within  the  reporting  period  April  2007  to  April  2013  around  1,245  confirmed  incidents  of 
environmental  damage  triggered  the  application  of  national  rules  transposing  the  ELD.  At 
least 34 administrative procedures were pending at the time of reporting with the competent 
authorities  or  (administrative  or  judicial)  instances  and  are  therefore  not  considered 
confirmed ELD damage cases. 31 instances of imminent threat were reported voluntarily by 
Member States, excluding Italy; Italy communicated that it had identified almost 150 liability 
cases  and  that  "most  of  these"  concerned  imminent  threats  of  environmental  damage.  As 
mentioned before, the real number of 'imminent threat incidents' might be substantially higher 
since  the  Member  States  were  only  obliged  to  report  cases  of  natural  resource  damage 
pursuant to the ELD.47 

Case numbers vary considerably between the 27 reporting Member States. Three basic 
scenarios can be distinguished: 

(cid:131)  Member  States  without  any  confirmed  environmental  damage  incidents  (11):  Czech 
Republic,  Denmark,  France,  Luxembourg,  the  Netherlands48,  Slovenia  and  Slovakia 
reported that no incidence of environmental damage as defined by the ELD occurred in 
the  reporting  period.  Austria,  Bulgaria,  Ireland  and  Malta  initiated  proceedings  under 
national  law  transposing  the  ELD  but  these  cases  are  either  pending  or  they  concerned 
only incidents of imminent threat of environmental damage. 

(cid:131)  Member  States  with  1  to  60  confirmed  environmental  damage  incidents  (14):  Belgium, 
Cyprus, Estonia, Finland, Germany, Greece, Italy, Latvia, Lithuania, Portugal, Romania, 
Spain, Sweden and United Kingdom. 

(cid:131)  Member  States  with  more  than  500  confirmed  environmental  damage  incidents  (2): 

Hungary and Poland. 

Table 1: Confirmed or pending cases of environmental damage or imminent threat 

Member 
State 

Confirmed 
Damage 
Cases49 

Confirme
d Threat 
Cases 

Total of 
Confirme
d Cases 

Pending 
Cases50 

Dismisse
d Cases51 

In Total

47 For 35 incidents, administrative procedures according to the national law transposing the ELD were initiated but later dismissed; Italy 
classified  850  incidents  as  non  ELD-cases  after  a  first  technical  assessment.  Reasons  for  dismissal  were,  inter  alia,  that  the  activity 
concerned did not fall under Annex III ELD; that the significance threshold was not met; or that the damage occurred before the entry into 
force  of  the  ELD.  Several  Member  States  mentioned  an  unspecified  number  of  'other'  environmental  damage  incidences  for  which  no 
administrative proceedings were initiated due to the same aforementioned reasons. 

48 The ChemiePack accident at Moerdijk of January 2011 is mentioned in the Dutch report, but not as a case in which the ELD transposing 
legislation has been applied. 

49 "Confirmed" case means – as distinct from "pending" – that the case even though remediation may still be ongoing is being handled 
under the national ELD law. 

50  "Pending"  is  not  tantamount  to  "open"  (which  amount  together  with  "completed"  to  the  total  of  "confirmed"  cases),  but  means 
(pursuant to the MS reports) that the case may became a "confirmed" ELD case, but is not (yet). Therefore it is at present included in the 
total number of ELD cases but not in the total number of "confirmed" ELD cases. Regarding the numbers under "pending", no distinction 
was made between environmental damage and imminent threat. 

51    "Dismissed"  means  that  the  procedure  started  under  national  ELD  law  but  was  later  dismissed  e.g.  because  of  absence  of  verified 
significance or Annex III activity. 

22 

 
 
 
 
 
                                                            
Austria 
Belgium 
Bulgaria 
Cyprus 
Czech 
Republic 
Denmark 
Estonia 
Finland 
France 
Germany  

0 
1 
0 
1 
0 

0 
2 
2 
0 
60 

no info 
0 
4 
0 
0 

0 
2 
no info 
0 
no info 

0 
1 
4 
1 
0 

0 
4 
2 
0 
60 

Greece 
Hungary 

40 
563 

11 
no info 

51 
563 

3 
0 
1 
0 
0 

0 
4 
0 
0 
0 
(estimation
) 
1 
10 
(estimation
) 
4 
approx. 
1000 

0 
0 
0 

1 
0 

1 
0 
0 
1 
15 

0 
8 
0 
0 
no info 

4 
1 
5 
2 
15 

0 
16 
2 
0 
60 

0 
no info 

52 
573 

6 
approx. 
850  

3 
no info 
no info 

1 
0 

no info 
no info 
no info 
no info 
no info 
0 
several 
cases55 
(3558)  

10 
(15052) 
Approx
. 2,000 
16 
4 
0 

2 
0 

514 

8 
5 
0 
0 
12 
5 
20 

(147659) 

Ireland 
Italy 

Latvia 
Lithuania 
Luxembour
g 
Malta 
The 
Netherlands 
Poland 

Portugal 
Romania 
Slovenia 
Slovakia 
Spain 
Sweden 
UK 

0 
17 

13 
4 
0 

0 
0 

0 
(up to) 133 

0 
(up to) 150

no info 
no info 
0 

no info 
no info 

13 
4 
0 

0 
0 

no info53 

506 

8 
(minimum) 

no clear 
info 

506 
(maximum
) 
2 
454 
0 
0 
11 
4 
13 

6 
1 
no info 
no info 
no info 
0 
7 

8 
5 
0 
0 
11 
4 
20 

0 
0 
0 
0 
1 
1 
0 

In total 

1243 

164 

140756 

(3457) 1034 

52 Without Italian pending and dismissed cases. 

53  Poland  clarified  by  written  comment  of  August  2015  that  they  did  not  provide  information  on  cases  of  imminent  threat  as  such 
information was not obligatory according to Annex VI ELD. Poland has information on cases of imminent threat. 

54 According to clarification by Romania in September 2015. 

55 Not counted. 

23 

 
 
                                                            
885 

3326 

Please note that cases are only counted once in the above table, even if they concerned more 
than one damage category (biodiversity/water/land). Several Member States pointed out that 
the  environmental  damage  posed  also  a  risk  for  another  environmental  medium  and 
constituted thereby a case of imminent threat as well (most often soil pollution constituted an 
imminent threat to water). The risk was usually neutralized in the course of the remediation 
measures. Also these cases were counted once only. 

Further to be born in mind is that Member States usually considered those incidents in their 
reports which were handled under the national ELD transposing legislation. Several Member 
States  transposed  the  Directive  quite  some  time  after  the  ELD  transposition  deadline  had 
expired on the 30th of April 2007 and consequently did not consider environmental damage 
that  occurred  between  the  date  of  application  of  the  ELD  and  the  entry  into  force  of  the 
national transposing legislation. 

The  numbers  of  cases  treated  under  national  ELD  regime  varies  substantially  between  the 
Member  States.  Especially  Hungary  and  Poland  have  a  very  high  number  of  confirmed 
environmental  damage  incidents.  In  contrast,  several  Member  States  did  not  report  a  single 
confirmed  damage  case,  among  them  medium  and  large  Member  States.  In  the  box  below, 
two  examples  are  given  to  display  the  diverting  national  approaches  regarding  reporting  of 
incidents. The reasons for the disparities which will be discussed further below in the chapter 
on the effectiveness of the ELD could be linked with the following factors in particular: 

• 

• 

• 

the framework character of the Directive and the many options which Member States use to 
a varying degree, 

the uneven interpretation of definitions and concepts, such as in particular the 'significance 
threshold' (see below box 3), and 

the entitlement for MS to adopt or maintain more stringent measures, again used to a varying 
degree (for example operator definition, scope of strict liability).60 

The difference in the stringency of the regime and in the interpretation of the terms can lead to 
considerably  different  results  if  it  is  combined  with  the  continued  use  of  existing  national 
legislative frameworks instead of the ELD transposing legislation. 

Moreover,  the  evaluation  studies  pointed  to  the  following  factors  greatly  influencing  the 
number of ELD cases (if available/existent or not): 
•  publicly accessible registers of ELD cases, 

56 Including the maximum of 133 imminent threat cases of Italy. 

57 Without Italy. 

58 Without Italy. 

59 Without Italian pending and dismissed cases. 

60 The Annexes to the ELD Effectiveness Study and the Implementation Study/legal part provide a more detailed impression of where the 
individual Member States have maintained or adopted more stringent measures. 

24 

 
 
 
 
 
 
                                                                                                                                                                                         
•  access  of  interested  parties  to  submit  comments  and  to  cooperate  with  competent 

authorities, 

•  a  secondary  obligation  of  competent  authorities  to  carry  out  preventive  and  remedial 

action if operators fail to do so, 
the repeal of overlapping national legislation, and 
the knowledge of the ELD by operators. 

• 
• 

However,  despite  the  fact  that  more  frequent  application  of  the  Directive  demonstrates  the 
need to use it as an effective enforcement tool to remedy environmental damage in order to 
ensure the effectiveness of EU environmental legislation and better environmental protection, 
as it was highlighted by several Member States in the reports as well as by stakeholders from 
all  sectors,  one  of  the  main  achievements  of  the  ELD  is  the  preventive  effect.  The  strict 
liability regime gives an incentive to implement better risk management and to take (further) 
precautionary  measures  and  actions  aiming  at  preventing  gradual  pollution  growing  into 
significant environmental damage. However, as mentioned before, there is no full set of data 
available  on  how  often  preventive  measures  pursuant  to  Article  5  ELD  were  taken  by 
operators.  The  main  reasons  for  the  lack  of  data  is  that  the  operators  must  only  report 
preventive measures to the competent authorities when the imminent threat of environmental 
damage is not dispelled despite the preventive actions taken immediately (Article 5(2) ELD) 
and  because  there  is  no  duty  of  the  Member  States  to  collect  and  report  information  about 
incidents  of  imminent  threat.  However,  some  Member  States  have  transposed  Article  5(2) 
ELD in a more stringent manner, obliging reporting of any imminent threat. Further, several 
Member  States  have  established  in  their  transposing  legislation  registration  and  publication 
requirements of ELD incidents. 

Box 3: ELD case examples showing different approaches towards significance threshold 

Case example 1: Sinking of a ship in the Upper Tisza Region (Hungary) 

A 1.5 ton motorboat half sunk at the camping site and gas oil leaked from its tank into the 
river  Tisza.  The  competent  authorities  considered  this  case  as  a  relevant  environmental 
damage falling under the national ELD transposition law. 

Case  example  2:  Fire  at  ChemiePack  on  the  5th  of  January  2011  in  Moerdijk 
(Netherlands)61 

Polluted fire extinction water at the company ChemiePack (presumably an Annex III(7)(a) 
activity) and stored chemicals penetrated the soil and polluted the surface waters and water 
beds  of  the  surrounding  ditches  and  those  of  De Roode Vaart  and  the  Northern Dock  and 
the groundwater. The cleaning up measures taken amounted to costs of 65.4 million EUR. 
The Dutch competent authorities applied national (especially water and soil) protection law 
rather than the ELD transposition law and therefore did not report it as an ELD case to the 
national  reporting  point  (thus  for  example  not  applying  the  baseline  remediation  and  the 
public participation requirements of the Directive). Consequently, it was not counted as an 
environmental damage incident in the Dutch report pursuant to Article 18(1) ELD, but the 
fire and its impact was indeed mentioned there. 

Source: Information drawn and verified from national reports and presentations 

61 The Dutch competent authorities have applied other (pre-existing) legislation to this case. 

25 

 
 
 
 
                                                            
Type of environmental damage/imminent threat according to the three damage categories 

The Member States were to report the cases of environmental damage handled under national 
ELD transposing legislation according to the damage categories 'protected species and natural 
habitats', 'water' and 'land'. In many cases, a single damaging event concerned more than one 
environmental damage category. That means that the total number of affected environmental 
media exceeds the total number of cases. 

Overall,  land  damage  incidents  dominate  with  about  51.5%  of  all  reported  cases.  Water 
damage  incidents  account  for  around  28.5%  and  biodiversity  damage  incidents  for  around 
20% of all reported cases. 

Table 2: Confirmed cases of environmental damage or imminent threat pursuant to 
damage category 

Member State 

Austria 
Belgium 
Bulgaria 
Cyprus 
Czech Republic 
Denmark 
Estonia 
Finland 
France 
Germany  
Greece 
Hungary 
Ireland 
Italy 
Latvia 
Lithuania 
Luxembourg 
Malta 
The Netherlands 
Poland 
Portugal 
Romania 
Slovenia 
Slovakia 
Spain 
Sweden 
UK 
In total 

Protected species 
and natural habitats
2 
0 
2 
1 
0 
0 
2 
1 
0 
27 
7 
124 
8 
6 
7 
0 
0 
2 
0 
92 
0 
0 
0 
0 
0 
2 
7 
290 

Water 

Land 

0 
0 
3 
0 
0 
0 
2 
0 
0 
10 
47 
243 
0 
7 
5 
4 
0 
0 
0 
392 
7 
4 
0 
0 
11 
1 
11 
747 

2 
1 
4 
1 
0 
0 
0 
1 
0 
42 
29 
244 
2 
8 
4 
1 
0 
0 
0 
49 
6 
1 
0 
0 
11 
5 
2 
413 

26 

 
 
 
 
 
Protected species and natural habitats 

Protected  species  and  natural  habitats  were  damaged  or  under  imminent  threat  to  get 
damaged  290  times.  However,  it  should  be  noted  that  Hungary  and  Poland  count  for  more 
than two thirds of all biodiversity cases (216 of 290 incidents, followed by Germany with 27 
incidents).  Biodiversity  cases  are  with  around  one  fifth  of  all  damage  cases  the  least 
numerous.  This  is  not  surprising  as  this  damage  category  was  since  its  introduction  at  EU-
level one of the most challenging novelties brought by the ELD. It still stands out for the EU-
added value of the Directive, together with complementary and compensatory remediation as 
well  as  public  participation  and  access  to  justice.  Some  Member  States  apply  damage  to 
protected species and natural habitats to the same or even to a higher extent as other damage 
categories, other Member States have experienced much less biodiversity cases. Three of the 
four pending cases in Ireland concern damage to protected habitats and species; in almost half 
of the German cases reported a damage of biodiversity was involved. In contrast for example, 
none  of  the  eight  cases  reported  by  Portugal  included  such  a  damage  or  imminent  threat 
thereof.  Besides  Portugal,  eleven  other  Member  States  have  not  recorded  any  biodiversity 
incidents. 

Water 

413 instances of water damage or imminent threat thereof were reported by Member States, 
making  this  category  of  damage  less  numerous  than  land  damage  but  more  numerous  than 
biodiversity  damage.  However,  Hungary  alone  counts  for  59%  (244  incidences)  and 
Germany,  Greece  and  Poland  for  29%  (120  incidents)  and  the  remaining  12%  (49  water 
cases)  are  spread  between  fourteen  Member  States.  Eight  Member  States  notified  no  water 
damage cases. In a considerable number of cases, damage to land was also accompanied by 
damage to water or imminent threat thereof. 

Land 

Land damage and imminent threat thereof are more than half of all incidences reported by the 
Member States; in 747 instances62 soil has been damaged or threatened to be damaged. This 
result does not come unexpected because this damage category requires a lower remediation 
standard and demands less remedial action (as compared with water and biodiversity damage: 
there  is  no  requirement  for  economic  valuation  and  for  complementary  and  compensatory 
remediation  for soil  damage).  These  reasons may  contribute  to  the  higher  number  of  cases. 
However, the result is on the other hand not coherent with the fact that land damage under the 
ELD sets a significantly higher damage threshold than under pre-existing national legislation 
as  it  requires  'significant  risk  of  human  health'  being  significantly  affected  but  not  also  a 
similar risk to the environment. 

The  ELD  Effectiveness  Study  does  not  recommend  establishing  EU-wide  limit  values  for 
land damage as Member States currently use quite varying protection levels and number and 
types of substances upon which such levels have been established. A harmonised, EU-wide 
limit without replacing national regulations may lead to a very complex situation across the 
EU, sitting on top of varying national regulations. Replacement of national regulations on the 
other  hand  seems  to  be  very  difficult,  as  the  failed  adoption  of  the  former  proposed  Soil 
Framework Directive has shown. However, as mentioned above, the ELD would probably be 

62 When the full potential of cases in Italy is disregarded. 

27 

 
 
 
 
 
                                                            
simpler for operators and national authorities in application if streamlined with national law, 
as land damage under the ELD is only triggered in case of 'significant risk of human health 
being adversely affected' and cannot alternatively also be triggered in case of 'significant risk 
of the environment being adversely affected', like in the majority of Member States. 

Other environmental media 

Some  Member  States  include  damage  to  air  (e.g.  Italy,  Hungary)  or  damage  to  protected 
landscapes  (e.g.  Lithuania,  Estonia).  Other  countries  broadened  the  scope  of  biodiversity 
damage  by  including  damage  to  flora  and  fauna  that  depend  on  an  aquatic  environment 
(Ireland  and  UK).  However,  just  a  few  cases  regarding  these  additionally  protected 
environmental media have been reported by the Member States. Hungary reported 18 cases of 
air contamination; Italy stated that two instances of damage to the atmosphere occurred. The 
numbers are based on the scope of damage in accordance with the respective national laws 
transposing the ELD. 

Classification of damaging activities: 

Annex VI of the ELD requires Member States to provide an activity classification code for 
the liable persons. Annex VI does not require the use of a specific code but clarifies explicitly 
that the NACE63 code according to Council Regulation (EEC) No 3037/90 of 9 October 1990 
on  the  statistical  classification  of  economic  activities  in  the  European  Community64  can  be 
used. However, in the guideline prepared at the 11th ELD government expert group meeting 
in  view  of  the  national  reporting  exercise,  it  was  emphasized  that  a  classification  of  the 
activities pursuant to Annex III to the ELD would be very useful in order to evaluate better 
the effectiveness of the ELD at EU level. 

The  classification  done  by  the  Member  States  is  unfortunately  not  uniform,  and  hence  not 
comparable. Fifteen Member States classified the liable activities according to Annex III to 
the ELD. Eight Member States used the NACE code of 1970 in either one of its revisions 1, 
1.1 or 2, and four Member States used (also) a national code which would be equivalent to 
the NACE code while one MS described the activities in general terms without referring to a 
standardised  code  or  to  Annex  III  of  the  ELD.  Some  MS  provided  more  than  one 
classification in regard of damaging activities, some none. More detailed information on the 
economic  classification  systems  used  by  the  Member  States  can  be  found  below  under 
'Member States using only a NACE code notification or no classification system'. 

Table 3: Classification system used by MS regarding confirmed or pending cases of 
environmental damage or imminent threat 

Member State  Annex III  

NACE code 

National NACE 
code equivalent 

No 
classification 
system 

Austria 
Belgium 
Bulgaria 

x 
x 
x65 

63 Nomenclature of Economic Activities. 

64 OJ L 293, 24.10.1990, p. 1. 

65 The classification was provided by Bulgaria upon written request in February 2015. 

28 

 
 
 
 
 
 
 
 
 
 
 
 
                                                            
Cyprus 
Czech Republic 
Denmark 
Estonia 
Finland 
France 
Germany  
Greece 
Hungary 
Ireland 
Italy 
Latvia 
Lithuania 
Luxembourg 
Malta 
The 
Netherlands 
Poland 
Portugal 
Romania 
Slovenia 
Slovakia 
Spain 
Sweden 
UK 
In total 

x 

x 
x 

x66 

x67 
x 
x68 
x 

x 
x 

x 

x69 
15 

x 

x 
x 

x 

4 

x 

1 

x 

x 
x 

x 

x 

x 
x 
x 
8 

Member States using Annex III classification 

Austria,  Belgium,  Bulgaria,  Cyprus,  Estonia,  Finland,  Greece,  Ireland,  Italy,  Latvia, 
Lithuania, Portugal, Romania and Spain specified the liable activities according to Annex III 
in  their  reports  and  provided  some  indication  as  to  whether  biodiversity  cases  were  treated 
under fault-based liability in accordance with Article 3(1)(b) ELD. 

The  by  far  most  frequently  mentioned  activity  are  "waste  management  operations"  (Annex 
III(2) ELD) and "manufacture, use, storage, processing, filling, release into the environment 
and  onsite  transport  of  dangerous  substances"  according  to  Annex  III(7)  ELD  with  44  and 
respectively 35 incidents caused.  The "operation  of  IPPC  installations"  (Annex  III(1)  ELD) 
and  "transport  by  road,  rail,  inland  waterways,  sea  or  air  of  dangerous  or  polluting  goods" 

66  Greece  provided  upon  written  request  complete  information  on  damaging  activities  according  to  Annex  III  and  Article  3(1)(b)  ELD  in 
March 2015. 

67  Ireland  provided  upon  written  request  complete  information  on  damaging  activities  according  to  Annex  III  and  Article  3(1)(b)  ELD  in 
March 2015. 

68  Latvia  provided  upon  written  request  complete  information  on  damaging  activities  according  to  Annex  III  and  Article  3(1)(b)  ELD  in 
March 2015. 

69 According to supplementary communication of March 2015, without however further differentiation. 

29 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                            
(Annex III(8) ELD) follow suit with 18 and respectively 15 incidents. Between five and eight 
incidents could be attributed to the following water-related Annex III activities: discharges of 
substances  into  groundwater  subject  to  authorisation  according  to  Council  Directive 
80/68/EEC70 (Annex III(4) ELD); discharges or injections of pollutants into surface water or 
groundwater  which  require  a  permit,  authorisation  or  registration  in  pursuance  of  Directive 
2000/60/EC71  (Annex  III(5)  ELD);  water  abstraction  and  impoundment  of  water  subject  to 
prior authorisation in pursuance of Directive 2000/60/EC (Annex III(6) ELD. 

Fault- or negligence-based  liability pursuant to Article 3(1)(b) ELD for  damages of species 
and natural habitats was established in 31 cases and is thus the activity with the third highest 
frequency in causing environmental damage. 

In some instances, the occupational activity responsible for the damage or for the imminent 
threat  could  be  subsumed  under  more  than  one  Annex  III  category.  For  example,  in  the 
Finnish  Talivaara  mine  case,  mining  operations  and  metal  industry  was  involved  which 
falling under point 1, 3 and 5 of Annex III. In Italy, in total 5 cases concerned the activities 
mentioned  in  point  4,  5  and  6  of  Annex  III  to  the  ELD.  This  should  be  taken  into  account 
when reading table 4 on the detailed Annex III-activities. 

Table 4: Number of activities under Annex III and Article 3(1)(b) liable for remediation or 
prevention of environmental damage 

1 

2 

3 

4 

5 

6 

2 

7 

1 

8 

9 

10  11  12  13  14  Article 
3(1)(b)
1 

Member 
State 
Austria 
Belgium  
Bulgaria 
Cyprus 
Estonia 
Finland 
Greece 
Ireland 
Italy 
Latvia 
Lithuania 
Portugal 
Romania 
Spain 
In total 

072 

1 

1 

4 

1 
6 

3 

2 

32 
2 
8 

1 
1 

1 

2 

1 

5 

5 

5 

1 
1 
2 
7 
7 
4 
7 
1 

- 

- 

- 

- 

- 

- 

31 

16 

1 

3 
5 

9 

4 
7 
2 
35  15 

2 
18  44  2 

5 

6 

8 

It can be concluded that all numbers were used except for the activities mentioned at the end 
of Annex III. While number III(9) ELD ("operation of installations subject to authorisation in 
pursuance of Council Directive 84/360/EEC") became obsolete as it was integrated into the 

70  Council  Directive  80/68/EEC  on  the  protection  of  groundwater  against  pollution  caused  by  certain  dangerous  substances,  OJ  L  20, 
26.1.1980, p. 43. 

71 See footnote 23 above. 

72 Responsible person not identified. 

30 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                            
IED activity, now III(1), the two GMO-related activities listed in Annex III.10 and III.11 as 
well as "transboundary shipment of waste" (III(12) ELD), "management of extractive waste" 
(III(13)  ELD)  and  operation  of  CCS-storage  sites  (III(14)  ELD)  have  not  been  notified  by 
those  MS  having  provided  data  under  Annex  III.  This  may  not  necessarily  mean  that  there 
was absolutely no case under these numbers as altogether only 167 cases of the total of 1,243 
cases  were  classified  according  to  Annex  III  and  Article  3(1)(b)  ELD,  but  it  appears  to  at 
least reflect with a high likelihood a clear trend. On the other hand, it is known for example 
that MS had water related activities involved in environmental damage despite the receipt of 
a very low number of such notified activities. 

Member States using only a NACE code notification or no classification system 

The most relevant data for those Member States having notified activities either on the basis 
of  the  NACE  code  or  a  national  equivalent  to  the  NACE  code  or  having  not  used  a 
classification system within their notification is briefly summarised as follows: 

The  classification  done  in  the  Polish  report  shows  a  considerable  high  number  of  incidents 
resulting from retail sale of automotive fuel (NACE code 50.5; 68 cases); wholesale of fuels 
(NACE code 46.71; 17 cases); manufacture of chemical products (NACE code 20.; 45 cases); 
land transport and pipelines transport (NACE code 45.; 61 cases, from which 33 concerned 
transport  on  roads);  collection  of  waste  (NACE  code  38.1;  28  cases);  electric  distribution 
(NACE code 35.1; 36 cases); waste water treatment (NACE code 38.2; 11 cases). 64 times 
the perpetrator could not been identified. 

Other Member States using the NACE code to classify the activities mentioned among others, 
road construction; waste collection, treatment and disposal activities; wholesale of petroleum 
and  petroleum  products;  freight  transport  by  road;  fuel  distribution  and  fuel  storage; 
manufacture  of  bio  fuels;  trade  with  fuels;  food  processing  industry;  and  manufacture  of 
chemicals. 

A rough analysis of the data provided by Hungary shows that in many cases (around 150) no 
classification  was  possible  due  to  the  fact  that  the  perpetrator  was  unknown  or  a  private 
individual. The following TEAOR'08 codes (which are equivalent to the NACE rev. 2 code) 
were  mentioned  frequently:  35.13-  distribution  of  electricity  (mentioned  85  times);  37.00  – 
sewerage (mentioned 26 times); 24. – manufacture of basic metals (mentioned 20 times; 11 
of them concerned the production of aluminium); 38.11 – collection of non-hazardous waste 
(mentioned  13  times);  19.20  –  manufacture  of  refined  petroleum  products  (mentioned  14 
times); 20. – manufacture of chemicals and chemical products (mentioned 9 times); 49.41 – 
freight transport by road (mentioned 12 times). 

Only Germany did not use a classification system for the liable activities nor categorize them 
according  to  Annex  III  ELD.  Instead  it  described  the  activities  responsible  for  the 
environmental damages. The analysis of the liable activities as outlined by Germany shows 
that most instances (18) were caused by biogas installations; around 14 cases were connected 
with  some  kind  of  manufacture,  use  or  storage  of  dangerous  substances;  a  lower  number 
concerned  the  transportation  of  dangerous  or  polluting  goods  and  discharges  of  pollutants 
into waters. 

Standard of remediation: 

The Directive provides for three different categories of remediation which complement each 
other,  depending  on  the  individual  case:  primary  remediation,  complementary  remediation 

31 

 
 
and compensatory remediation (explanation see above under 'Baseline'). As complementary 
remediation,  where  the  same  damaged  natural  resources  and  services  cannot  be  simply  re-
introduced or re-produced, and compensatory remediation for interim losses between damage 
and full restoration, belong to the EU-added value of the Directive, the application of these 
high remediation standards is core to the quality of the ELD implementation. 

Member  States  were  not  required  under  the  reporting  obligation  of  the  ELD  to  precisely 
report on the application of the three remediation categories and only very few have indeed 
included  some  indications.  Therefore,  the  available  data  and  information  is  haphazard  and 
scarce,  but  the  following  conclusions  can  be  drawn  from  the  information  sources  to  this 
evaluation. First, that there was much less application of 'complementary' and 'compensatory' 
remediation than of 'primary' remediation; and, second, that remediation is increasing while 
the absolute number of complementary and compensatory remediation cases appear to remain 
still very low. This finding does not indicate a highly qualitative implementation due to the 
low number of complementary and compensatory remediation cases. 

Judicial review: 

Only in few instances the confirmed ELD damage cases went into judicial review,73 with one 
notable  exception  (Poland:  44).  The  total  judicial  review  cases  in  the  EU  without  Poland 
would according to the notified data amount to about 20 cases. 

Table 5: Judicial review cases 

Member State 
Austria 
Belgium 
Bulgaria 
Cyprus 
Czech Republic 
Denmark 
Estonia 
Finland 
France 
Germany  
Greece 
Hungary 
Ireland 

Judicial Review  
2 
0 
1 
0 
0 
0 
074 
1 
0 
075 
1 
5 (minimum) 
0 

Italy 
Latvia 
Lithuania 
Luxembourg 
Malta 
The Netherlands 
Poland 
Portugal 
Romania 
Slovenia 
Slovakia 
Spain 
Sweden 
UK 

0 
1 
0 
0 
1 
0 
44 
0 
0 
0 
0 
1-3 
1 
176 

Requests for action from citizens and NGOs according to Article 12 ELD: 

73 According to Article 13(1) ELD the enabled persons under Article 12(1) ELD have access to justice, i.e. the right to appeal before a court 
or another independent and impartial public body against the decision taken by the competent authority. 

74 Estonia clarified by written comment of September 2015 that it had no instance of judicial review, just appeals before the Environmental 
Board. 

75 Pursuant to a clarifying comment of August 2015, there have been judicial reviews before courts as well in Germany, but no review has 
confirmed a damage case. 

76 Added due to written information from the United Kingdom of September 2015. 

32 

 
 
 
                                                            
Only a small number of requests for action77 (above 30) was reported by the Member States - 
with the exception of Italy, which reported 93 such requests. The low number is not further 
surprising because the Member States communicated only a few cases in total. However, for 
Member  States  which  have  a  higher  number  of  cases,  also  a  higher  number  of  citizen's 
requests  could  have  been  expected  can  be  presumed  (as  for  example  known  for  Poland, 
without a specification in the Polish report78). 

Table 6: Requests for action under Article 12(1) 

Member State 
Austria 
Belgium 
Bulgaria80 
Cyprus 
Czech Republic 
Denmark 
Estonia 
Finland 
France 
Germany  
Greece 
Hungary 
Ireland 

Request for action  
4 
0 
0 
0 
082 
0 
2 
1 
0 
2085 
2 
0 
987 

Italy 
Latvia 
Lithuania 
Luxembourg81 
Malta 
The Netherlands 
Poland 
Portugal 
Romania 
Slovenia 
Slovakia 
Spain 
Sweden 
UK 

93 
0 
079 
0 
1 
0 
0  
083 
0 
084 
0 
586 
2 
6 

77 According to Article 12(1) ELD natural or legal persons affected or likely to be affected by environmental damage or having a sufficient 
interest  in  environmental  decision  making  relating  to  the  damage  or  alleging  the  impairment  of  a  right,  including  environmental  NGOs 
meeting any requirements under national law are entitled to request the competent authority to take action under the Directive. 

78 For example at the 10th ELD government experts meeting of 7th November 2011 Poland reported about 149 cases in 2009 and 210 cases 
in 2010 "in which the proceedings were not initiated, the proceedings were dismissed or the obligation to take prevention or remedying 
measures was not imposed". 

79  Upon  written  request,  Lithuania  provided  in  April  2015  that  their  competent  authorities  receive  in  general  a  large  number  of 
observations or requests for action with regard to instances of environmental damage from natural or legal persons, affected or likely to 
be  affected  by  environmental  damage,  or  having  a  sufficient  interest  in  environmental  decision  making.  A  large  part  of  investigations 
concerning environmental damage would be initiated on the basis of such observations or requests. However, as regards the four notified 
cases  of  environmental  damage,  which  qualified  as  significant  damage  under  the  ELD,  that  proceedings  were  initiated  on  the  basis  of 
information by the liable person (2x), by the police and by the municipality. 

80 Notified upon written request in February 2015. 

81 Data provided on written request in March 2015. 

82 The absolute majority of cases was initiated ex officio by the competent authority (Czech Environmental Inspectorate); the public was 
involved only in a few cases. 

83 Data provided by Portugal upon written request in February 2015. 

84 Data provided on written request in March 2015. 

85 At least 20 requests have been submitted but not all have led to confirmed damage cases. 

86 This number covers request of actions by third parties and operators. 

87 Data provided on written request in March 2015. 

33 

 
 
                                                            
  
Duration of remedial action: 

The  information  on  the  duration  and  the  average  time  of  remediation  is  not  fully 
representative as not all Member States provided complete and comparable data. On the basis 
of the available information gained from MS, it would seem that the average time from the 
initiation of the remediation process (as far as this date could be distinguished from the date 
only  of  detection  or  notification  of  the  damage)  until  full  remediation  is  about  12  months. 
This  is  based  on  a  total  of  484  cases  across  15  MS  that  indicated  the  duration  of  remedial 
action. Given the high number of cases where the duration of remedial action is provided for 
by Hungary (153) and Poland (246), the average duration would increase to about 14 months 
if those two countries are excluded. 

The  shortest  duration  of  reported  remediation  was  in  several  cases  only  one  day  and  the 
longest duration lasted in some cases nearly for the whole reporting period (not counting even 
the  many  cases  where  remediation  could  not  be  completed  until  the  end  of  the  reporting 
period).  The  disparate  duration  of  ELD  remediation  is  not  surprising,  as  primary 
remediation88 can be sometimes fixed in simple damage instances within relatively short time 
while  in  complex  or  large  damage  instances  this  could  take  longer  than  three,  four  or  five 
years, with even some cases taking the whole duration of the six years-reporting period (large 
scale remediation cases are known to last sometimes for decades). 

Table 7: Duration of remedial action 

Average in months  Lithuania 
7 
12 
9 
6 
12 
16 
4 

Country 
Bulgaria 
Cyprus 
Estonia 
Germany 
Greece 
Hungary 
Latvia 
Nota bene: this average is for some MS quite biased where a high percentage of remediation 
procedures could not be terminated until the end of the reporting period (for example 75% of 
the Lithuanian cases). 

Malta 
Poland 
Portugal 
Romania 
Spain 
Sweden 
UK 

10 
1 
10 
18 
9 
10 
7 
4 

Costs of remedial action: 

12 MS reported on the costs of their cases, resulting in a total of 140 cases with information 
on the costs of remedial action. This means that the Commission obtained data about costs of 
environmental  restoration  on  roughly  10%  of  all  reported  cases.  This  would  seem 
representative by number but of these 140 cases 98 were reported by only one Member State 
(Hungary). The costs of remedial action would be on average at around €350,000 when the 
very 
(e.g.  Kolontár/Hungary, 
Moerdijk/Netherlands).  If  furthermore  all  cases  exceeding  more  than  €1  million  were 
disregarded  (one  Swedish  case,  one  Greek  case  and  one  Spanish  case),  the  average  cost  of 
remedial  action  would  be  around  €42,000.  This  corresponds  with  a  representative  and 

scale  damage 

are  deducted 

cases 

large 

few 

88  This  is  remediation,  which  achieves  complete  restoration  of  the  damaged  natural  resources  so  that  complementary  remediation 
(creation of equivalent resources) is not necessary (see the explanation in the chapter above on the functioning of the ELD). 

34 

 
 
 
                                                            
accurate estimate (arithmetic mean value) for example available for Greece with €60,000 per 
ELD case. 

The  provided  figures  seem  to  be  reliable  and  to  correspond  also  with  similar  data  end 
experience of environmental damage in other areas. The range of costs is between €600 and 
several million of remediation costs for one case, showing also that several Member States do 
not regard only 'severe' instances of environmental damage to be covered by the ELD, but the 
the  few  cases  with 
arithmetic  average  turns  as  presented  above  around  €42,000  per  case  if 
excessively high costs are disregarded. Some Member States provide however the impression 
that  they  apply  the  Directive  only  on  instances  entailing  excessive  damage.  This  finding 
would again underline the need for a reasonable and coherent interpretation and application 
of the significance threshold. 

The  average  remediation  costs  per  MS  are  presented  in  the  chapter  on  efficiency  further 
below. Immediately below are shown the total costs of remedial action in the EU within the 
reporting period, calculated for three different scenarios. 

Table 8: Costs of remedial action 

Total  costs  of 
remedial action 

179,533,079 

of 
with 
of 

Number 
cases 
indication 
costs 
142 

Average costs in Euro 

1,264,317 

49,533,079 

140 

353,807 

5,821,238 

137 

41,490 

cases 

reported 

All 
(including 
Kolontár/Hungary, 
Moerdijk/Netherlands) 
All 
cases 
reported 
excluding 
Kolontár/Hungary, 
Moerdijk/Netherlands 
All  cases  below 
€1 
million 

6.  ANSWERS TO THE EVALUATION QUESTIONS 

6.1.  Relevance 

Are the objectives of the Directive still relevant (i.e. do they still match current needs)? 

In the light of the recently published European Environment State and Outlook 2015 Report 
(SOER 2015), the objectives of the Directive remain highly relevant. The SOER 2015 points 
out that despite environmental improvements of recent decades, challenges that Europe faces 
with  respect  to  protecting,  conserving  and  enhancing  the  natural  resources  today  are 
considerable.  A  key  area  according  to  this  is  "protecting  the  natural  capital  that  supports 
economic prosperity and human well-being".89 

89 Relevant quotes for biodiversity damage and water damage are for example: "A high proportion of protected species (60%) and habitat 
types  (77%)  are  considered  to  be  in  unfavourable  conservation  status,  and  Europe  is  not  on  track  to  meet  its  overall  target  of  halting 
biodiversity  loss  by  2020,  even  though  some  more  specific  targets  are  being  met."  "Overall,  more  than  half  of  the  river  and  lake  water 
bodies in Europe  are reported to  hold less than  good ecological status  or potential. Ecological status is a criterion for the  quality of the 
structure and functioning of surface water ecosystems." 

35 

 
 
 
                                                            
The objectives of the Directive are still relevant and match the current needs. Environmental 
damage is occurring as a fact of life across the EU and will ever continue so, even if the ELD 
has  contributed  to  a  decrease  of  environmental  damage  through  better  precaution  and 
prevention of damage, as stakeholders and Member States witnessed. 

Are  the  key  problems  and  concerns  about  preventing  and  remedying  environmental 
damage still properly addressed by the ELD legislation? 

The  key  problems  and  concerns  about  preventing  and  remedying  environmental  damage 
appear to be in principle properly addressed by the national legislation transposing the ELD. 
However,  as  the  implementation  and  evaluation  studies  have  shown,  deficits  in  the 
implementation  of  the  Directive  remain  considerable  due  to  lacking  awareness  of  the 
Directive  with  practitioners  and  stakeholders,  misunderstandings  or  unclarity,  insufficient 
resources and expertise and partly inexistent registration of cases and missing accessibility of 
data on ELD cases (depending on the MS). Further, it appears that in some cases preventive 
action instead of primary remediation is used due to a wrong understanding of the difference. 
This  together  with  the  under-use  of  and  complementary  and  compensatory  remediation 
measures  is  a  factor  hindering  the  achievement  of  halting  biodiversity  loss  by  2020  and 
cleaner freshwater resources in the EU. 

How  relevant  is  the  Directive  to  achieving  high  level  of  environmental  protection  and 
preventing/remedying environmental damage in the EU? 

A  look  at  the  contribution  of  other  instruments  which  include  provisions  on  environmental 
restoration of damage may be helpful in order to see how relevant the ELD is with regard to 
achieving  a  high  level  of  environmental  protection  in  preventing  and  remedying  of 
environmental  damage.  Other  relevant  EU  legislation  is  setting  sometimes  a  pre-emptive 
frame  of  obligations;  e.g.  the  programme  of  measures  in  the  Water  Framework  Directive 
which requires, for example, basic measures to prevent and/or reduce the impact of accidental 
pollution  incidents.90  Similar  pre-emptive  provisions  exist  in  Article  6  of  the  Habitats 
Directive. In contrast, the ELD prevents damage from occurring when it is already imminent 
and making it good once it occurred. 

Therefore, the Directive contributes to achieving a high level of environmental protection and 
preventing/remedying  environmental  damage  in  the  EU.  However,  as  the  evaluation  has 
revealed, the potential to achieve the objective is hampered by underdeveloped capacities and 
expertise,  insufficient  communication  between  the  main  stakeholders  (operators,  competent 
authorities, insurers, environmental NGOs), key concepts remaining unclear to practitioners 
and stakeholders ('significance threshold', 'preventive action', 'favourable conservation status') 
and lacking EU register of ELD cases, and similar practical measures and tools. 

6.2.  Effectiveness 

What progress have Member States made over time towards achieving the objectives set out in 
the Directive? Comments on possible measurement tool and benchmark as well as the related 
fundamental complexity (is more or less damage indicating effectiveness?) 

90 See Article 11(3)(l): "any measures required to prevent significant losses of pollutants from technical installations, and to prevent and/or 
to reduce the impact of accidental pollution incidents for example as a result of floods, including through systems to detect or give warning 
of such events including, in the case of accidents which could not reasonably have been foreseen, all appropriate measures to reduce the 
risk to aquatic ecosystems." 

36 

 
 
 
 
                                                            
Progress  made  towards  achieving  the  two  main  objectives  under  the  ELD,  prevention  and 
remediation  of  environmental  damage,  needs  to  be  assessed  against  the  background  of 
divergent  ways  of  ELD  application  by  MS,  in  particular  regarding  frequency  and  intensity. 
Those Member States which apply the ELD more often or regularly, make use of it at a fairly 
constant level. 

The pure number of environmental damage instances on which the ELD legislation was applied 
(number  of  notified  preventive  cases  and  remedial  cases,  indicated  under  implementation) 
should not serve as the only single indicator or benchmark for the effectiveness of the Directive, 
as a higher number may often but not exclusively mean that the Directive is better implemented. 
It certainly demonstrates where the Directive has been correctly applied, in particular where the 
requirements of its Annex II regarding primary, complementary and compensatory remediation 
have been applied accordingly, that damaged natural resources have been restored accordingly. 
Thus, a low number of cases may not necessarily mean that the Directive has not worked well or 
not  at  all  as  several  national  government  experts  and  stakeholders  from  the  industrial  and 
insurance sector assure. The low number may on the contrary prove that the Directive works, it 
may  indicate  that  it  has  a  deterrent  effect,  i.e.  an  incentive  for  operators  to  take  (better) 
precautionary  measures,  such  as  upgrading  financial  security  and  better  risk  management, 
underlined by stakeholder accounts of gradually decreasing instances of environmental damage 
instances over the last decade as compared to the previous decade before the ELD took effect. 

On  the  critical  side  vis-à-vis  these  arguments  is  to  be  raised  that  apart  from  the  number  of 
preventive actions taken in case of imminent threat of environmental damage (only a very low 
number  has  however  been  notified),  the  amount  or  weight  of  better  precaution  due  to  the 
establishment of the ELD is not known and it is probably also very difficult to estimate it. In 
particular where eleven MS have notified not even one ELD case in the period between 2007 
and 2013 and have neither provided supplementary information on how they treated instances of 
environmental  damage,  this  may  mean  that  the  Directive  has  not  been  applied  there  or  is  not 
working  there.  However,  as  the  situation  varies  significantly  between  the  individual  Member 
States, it appears also difficult to find out general reasons for a diverging situation. This is a very 
important issue to be further investigated on the basis of evidence provided by data which is at 
present available to a very limited and uneven extent.91 

From  the  implementation  and  evaluation  studies  in  particular  can  be  drawn  that  the  large 
disparities  in  terms  of  number  of  ELD  cases  result  from  the  framework  character  of  the 
Directive  and  the  many  options  it  offers  to  MS,  in  particular  as  regards  the  'significance 
threshold',  but  also  the  optional  defences  and  other  options  and  exceptions.  In  addition,  the 
uneven interpretation of definitions and concepts, the entitlement for MS to adopt or maintain 
more stringent measures and the continued use of existing national legislative frameworks play a 
role. 

Moreover, as the evaluation studies, in particular the study on analysis of integrating the ELD 
into  national  legal  frameworks,  suggested  that  the  following  factors  greatly  influence  the 
extent of practical application (number of ELD cases): publicly accessible registers of ELD 
cases;  access  of  interested  parties  to  submit  comments  and  to  cooperate  with  competent 
authorities;  a  secondary  obligation  of  competent  authorities  to  carry  out  preventive  and 

91 An EU-wide ELD case register and a clear set of indicators for purposes of future regulatory monitoring would be necessary to remedy 
the uneven and partly limited application. 

37 

 
 
 
                                                            
remedial action if operators fail to do so; the repeal of overlapping national legislation; and 
the knowledge of the ELD by operators. 

Beyond  the  mere  intrinsic  factors  it  is  noteworthy  that  –  like  any  intervention  –  the  ELD  is 
implemented  in  a  complex  environment  including  multiple  external  factors  affecting  the 
effectiveness of the Directive. For  the ELD, the external factors have  been examined  by the 
ELD  Implementation  Study  (see  also  below  in  the  Annex  on  ELD  studies).  That  study 
investigated  the  following  external  factors:  conditions  for  ELD  application,  expertise  and 
knowledge,  organisation  and  governance,  resources,  tools,  level  of  cooperation  between 
stakeholders,  legislative  environment,  economic  and  financial  environment.  That  study 
concluded  that  the  conditions  for  ELD  application,  expertise  and  knowledge  and  the 
legislative environment would be the main factors. 

Figure 4: Sources of obstacles and challenges to implementing the ELD regime92 

Conditions for ELD 
application

Economic  and 
financial environment

Expertise & knowledge

Legislative 
environment

Practical 
implementation 
of the ELD

Organisation / 
governance

Level of cooperation 
between stakeholders

Resources

Tools

Legend  for  the  term  'Conditions'  used  in  the  ELD  Implementation  Study:  Complexity  of  the 
national transposing legislation; 'Difficulty to demonstrate that the significance threshold of 
the  ELD  is  met;  Difficulty  resulting  from  the  broad  but  non-exhaustive  scope  of  the  ELD; 
Need  to  demonstrate  the  liability  of  an  operator;  Inclusion  of  financial  obligations  for 
operators' 

Does  the  Directive  lead  to  a  level  playing  field  in  terms  of  preventing  and  remedying 
environmental damage across the EU? 

92 Figure taken from ELD Implementation Study, p. 120 

38 

 
 
 
 
 
 
                                                            
According  to  the  theory,  the  ELD  should  reduce  possible  locational  advantages  in  MS  with 
low environmental standards and thus contribute thereby to a competitive level playing field, 
if  enforced  strictly.  In  the  light  of  experience  regarding  the  development  of  a  level  playing 
field,  the  ELD  has  certainly  led  to  a  more  aligned  legislative  framework  for  environmental 
damage in the EU. This is demonstrated by the sheer existence of the MS laws transposing the 
ELD,  taking  account  of  all  ELD  requirements  (for  instance  as  regards  environmental 
remediation standards, biodiversity damage, public participation and access to justice). On the 
other  hand,  the  implementation  and  evaluation  studies  and  other  evidence  found  still  "a 
patchwork of environmental remediation" in the EU, partly also due to the varying application 
of the ELD legislation in many MS. As shown further above, a damage instance which triggers 
the ELD legislation on one Member State is not treated as ELD case in another Member State. 
This  could  be  explained  by  the  continued  application  of  pre-existing  national  laws,  whose 
application can be invoked if the damage is not considered to be 'significant'. 

Is  the  scope  of  the  Directive  correct  with  regards  to  strict  liability?  Is  the  current  scope 
working effectively pursuant to gained experience? 

The effectiveness of the ELD depends to a great extent on its scope, in particular on the strict 
liability  standard.  The  Directive  makes  operators  strictly  liable  who  carry  out  dangerous 
activities  listed  in  Annex  III,  i.e.  if  it  can  be  established  that  they  have  caused  the 
environmental  damage  without  it  being  necessary  to  proof  fault.  In  the  process  of  the 
investigation of the causes of weak implementation (ELD Implementation Study 2012), the 
importance  of  the  scope  of  strict  liability  became  obvious,  as  particularly  witnessed  by  the 
results of the ELD Effectiveness Study and the Biodiversity Damage Study. 

From  the  examination  resulted,  on  the  one  hand,  that  a  broadening  of  the  strict  liability 
standard  to  cover  all  economic  activities  (not  only  dangerous  activities  listed  in  Annex  III 
ELD)  will  encompass  more  environmental  damage  being  treated  under  the  ELD.  This  will 
thus increase the level of environmental protection and the effectiveness of the Directive in 
particular  with  respect  to  biodiversity  damage  by  replacing  completely  the  fault-based 
liability standard. On the other hand, the ELD Effectiveness Study emphasized also that the 
significant draw-backs in terms of additional financial burdens on operators and an increase 
in  insurance  premiums  or  else  financial  security  payments  would  need  to  be  considered. 
Specific data are not available. It can be concluded that the principle decision (in line with the 
theory) to reserve strict liability to dangerous occupational activities while other occupational 
activities should remain being subject to a fault-based liability standard could be verified. 

Is  extending  strict  liability  beyond  the  current  list  in  Annex  III  for  preventing  and 
remediating  environmental  damage  by  including  certain  activities  (e.g.  pipeline  transport 
of  dangerous  substances,  mining  activities,  shale  gas  operations)  in  the  light  of  gathered 
experience  (e.g.  Coussouls  de  Crau-case  in  France)  necessary  or  even  beyond  listed 
activities (as in certain MS)? 

It needed to be investigated whether the scope of strict liability as delineated in Annex III of 
the Directive is right by looking into practical experience showing a need to fill gaps in this 
list:  For  pipeline  transport  of  dangerous  substances  outside  of  industrial  establishments  the 
Coussouls de Crau event in France93 has shown such a possible need. Further, in view of the 

93 On 7 August 2009 a breach in a 40-inch underground crude oil pipeline operated by the South European Pipeline Company SPSE led to a 
spill  of  crude  oil  of  more  than  4,000  m³  into  the  Coussouls  de  Crau  nature  reserve  at  Terme  Blanc  in  southern  France.  The  spill  caused 
significant environment damage to the nature reserve, which is part of the Natura 2000 network. The contaminated zone belonged to a 
Special Protection Area (FR9310064 "Crau") under the Birds Directive and a Special Conservation Area (FR9301595 "Crau Centrale – Crau 

39 

 
 
                                                            
objective to halt biodiversity loss, an extension of strict liability by activities concerning the 
introduction  of  invasive  alien  species  could  potentially  assist  this  aim  and  prevent  harm  to 
human health due to some invasive alien species being vectors of diseases of directly causing 
health  problems  such  as  asthma,  dermatitis  and  allergies.  However,  activities  concerning 
invasive alien species fall often outside of occupational activities and the practical experience 
has  in  addition  not  shown  sufficient  evidence  and  finally  human  health  damage  remains  as 
traditional damage also outside of the scope of the environmental damage. 

An extension of Annex III to cover shale gas/oil extraction or hydraulic fracturing was also 
considered,  but  as  related  activities  are  already  covered  by  the  current  ELD  scope  under 
Annex III94 and as MS are currently called to fill potential gaps95 under subsidiarity action96, 
other  options  will  be  examined  (e.g.  guidance)  to  address  identified  uncertainties97.  An 
extension  to  mining  activities  in  general,  beyond  Annex  III.1398  (see  for  example  the  big 
accidents  in  Doñana/Spain  in  1998  or  in  Baia  Mare/Romania  in  2000)  would  require 
additional  financial  security  coverage  by  a  sector  which  is  according  to  the  ELD 
Effectiveness Study considered to being already sufficiently regulated. 

Therefore, with the possible exception of pipeline transport of dangerous substances outside 
of  industrial  establishments  the  case  for  an  inclusion  of  another  Annex  III  activity  is  not 
compelling enough. However, CEFIC (the European Chemical Industry Council) raised some 
arguments  against  such  extension:  the  majority  of  pipeline  incidents  (ruptures)  would  be 
caused by third parties and despite the availability of the third party defence under the ELD, 
this  would  be  inconvenient  and  could  be  costly  and  may  "incorrectly  internalize  socio-
economic costs at the level of pipeline operators", taking account also of the high number of 
parties involved (pipeline operator, pipeline owner, materials owners using the same pipeline, 
land owners).99 

Within  biodiversity  damage:  Which  conclusions  can  be  drawn  from  a  wider  biodiversity 
scope covering also nationally protected species and habitats and a narrower  biodiversity 
scope  restricted  to  the  Union  scope  (current  split  is  half/half  by  MS)?  Is  it  relevant  with 
regard to effectiveness? 

Sèche") under the Habitats Directive. The French ELD legislation could however not be applied as pipeline transport outside of industrial 
establishments are not covered by Annex III, in particular not by Annex III.7 ELD. 

94 In particular water abstraction activities listed in Annex III.3. – 6., use, storage, release into the environment and on-site transport of 
dangerous substances (including hydrocarbons such as methane) in Annex III.7.(a) and extractive waste management activities in Annex 
III.13. 

95 For  example  risks of induced seismicity that may result in environmental damage; injection of fracturing substances that may not  be 
listed under the CLP Regulation; accidental release into the environment of substances mobilised from the underground that may not be 
listed under the CLP Regulation. 

96 Commission Recommendation 2014/17/EU on minimum principles for the exploration and production of hydrocarbons (such as shale 
gas) using high-volume hydraulic fracturing, OJ L 39, 8.2.2014, p. 39 (point 12 on environmental liability and financial guarantee). 

97  A review of the effectiveness of Recommendation 2014/70/EU is on-going. Building on the results of such review, the Commission will 
decide whether further action is needed. 

98  "The  management  of  extractive  waste  pursuant  to  Directive  2006/21/EC  of  the  European  Parliament  and  of  the  Council  of  15  March 
2006 on the management of waste from extractive industries." 

99 CEFIC Position Paper on: Key review points of the Environmental Liability Directive. October 2014. 

40 

 
 
                                                                                                                                                                                         
 
The study looking  into biodiversity  damage  recommended  an  extension of strict liability to 
cover all occupational activities which cause damage to protected species and natural habitats 
(instead of just the hazardous activities listed in Annex III). However, in general, the double 
liability  standard  of  the  ELD  with  strict  liability  for  hazardous  activities  and  fault-based 
liability  for  other  activities100  appears  to  be  right  from  an  economic  point  of  efficiency,  as 
strict liability is more efficient in case of hazardous activities and a fault regime can suffice 
for situations not involving dangerous activities.101 Therefore, suggestions to extend the strict 
liability standard to  all activities, in particular under biodiversity damage are not consistent 
with  efficiency  considerations.  Furthermore,  the  additional  financial  burden  of  such  an 
extension of the scope of strict liability on operators through a potential increase in insurance 
premiums or other financial securities should be taken into account.102 Therefore, an extended 
biodiversity damage scope does not appear to be the most effective result. 

Is the Scope of the Directive correct with regard to environmental damage? Has the current 
scope  worked  out  to  be  right  in  meeting  practical  demands?  Is  an  extension 
necessary/appropriate  at  EU  level  as  in  some  MS?  E.g.  to  include  damage  to  air  (as 
Hungary) or to protected cultural resources or to protected landscapes (some MS)? 

All categories of the scope as outlined in the liability scope-chapter above can be questioned. 
However, most often only the material scope is discussed (i.e. what kind of damage should be 
covered).  Other  questions  are  rarely  addressed;  in  the  3rd  ELD  Stakeholder  Workshop  for 
example also the territorial scope was discussed in the context of extra-EU territorial issues 
(pollution from outside affecting the EU and vice versa). 

The initial decision to exclude for example health and property damage may not have been a 
good  choice  in  terms  of  consistency  with  other  regimes,  in  particular  national  liability 
systems, but it is stringent to exclude such categories of third-party damage because the ELD 
is aiming at remedying the pure ecological damage. Within the environment, the evaluation 
of the scope of the Directive indicated that extension to damage to air (which is sometimes 
covered at national level103 and was often raised within studies and meetings as an issue) may 
promote the polluter pays principle better and result in streamlining and harmonisation with 
national  legislation.  However,  an  extension  towards  inclusion  of  air  may  not  only  be 
technically  challenging  due  to  the  nature  of  air  pollution  which  may  represent  diffuse 
pollution104,  i.e.  difficult  to  attribute  to  identifiable  individual  polluters,  but  may  also  have 
detrimental implications on insurance and other financial security instruments. 

It was also not considered appropriate to include cultural buildings, monuments, landscapes 
and seascapes as this would not lead to further simplification, streamlining and harmonisation 
due  to  the  broad  differences  between  these  assets  and  the  environmental  damage  under  the 
ELD. 

100 See the explanation in the chapter on the functioning of the Directive above. 

101 Kristel De Smedt, Environmental Liability in a Federal System. A Law and Economics Analysis. Metro, 2007, p. 61. 

102  Such  an  approach  would  be  for  example  supported  by  the  Ad-Hoc  Industry  Natural  Damage  Management  Group  and  by  Insurance 
Europe who thinks that extending strict liability to cover all activities may not only confuse operators but also have the potential to affect 
premium levels and insurance capacity and hence may lead insurers to limit their coverage to a more limited scope of activities in order to 
preserve sufficient insurance capacity. 

103 For example in Hungarian and Italian legislation. 

104 As for instance pointed out at the 2nd ELD Stakeholder Conference. 

41 

 
 
                                                            
To what extent is the significance threshold hampering the effectiveness of the Directive? 
In particular the significance threshold for imminent threat: can it hamper the Directive's 
trigger and thus effectiveness? 

The uneven application of the Directive in different Member States appears to be largely due 
to  the  different  interpretation  and  implementation  of  the  significance  threshold  of 
environmental damage. In addition, it should be noted that authorities, operators and insurers 
expressed the need for more clarity in this regard. It cannot be denied that the definition of 
the significance threshold can potentially hamper the effectiveness of the Directive and that it 
leads to an uneven implementation. The concern is particularly high with regard to the notion 
of  'imminent  threat  of  damage'  which  triggers  the  requirement  to  prevent  damage  from 
occurring.  Where  MS  require  in  a  case  of  imminent  threat  of  damage  that  it  needs  to  be 
decided  first  whether  the  damage  will  be  significant,  it  may  be  often  too  late  to  apply  the 
Directive. Therefore an approach requiring a 'reasonable belief'  instead of certainty that the 
damage may be significant, appears practical and increases the effectiveness of the Directive. 
This problem has been in particular addressed by the Biodiversity Damage Study.   

It is however useful to better clarify the notion of the significance threshold, or to be more 
precise  about  the  three  significance  thresholds  for  biodiversity  damage,  water  damage  and 
land damage (see above chapter 2.2.4. on material scope); in particular, where there are wide 
differences due to the lack of a common understanding and uniform application. 

What is the relationship between the significance threshold for biodiversity damage, land 
damage and water damage? Are the significance thresholds appropriate? Which conclusions 
can  be  drawn  from  the  divergent  application  of  the  significance  thresholds  for  the 
effectiveness of the Directive? 

While the ELD provides a list of helpful criteria in its Annex I for the determination of the 
significance of the biodiversity damage, such further criteria are lacking in the Directive for 
the determination of water damage and land damage. This may be worth an exercise within 
the  relevant  terms  framing  the  definition  of  water  damage  under  the  Water  Framework 
Directive  (WFD)  and  Marine  Strategy  Framework  Directive  (MSFD).  Research  in  the 
evaluation of the ELD explored the difference in the effectiveness between 'waters' or 'water 
bodies' as reference point for water damage. The Legal Analysis and the ELD Effectiveness 
studies pointed to the potential difference in application, as 'water bodies' often differ in size 
between Member States while 'waters' allows a more targeted use of the Directive in relation 
to its objective. The practice in Member States seems to be rather split in this respect. 

The  current  trigger  seem  to  be  higher  for  land  damage  pursuant  to  the  wording  of  the 
Directive, but the numbers of relatively more notified land damage instances does not verify 
this assumption. There is no quick explanation for this result, it may be linked to the fact that 
authorities may be most familiar or find it simpler to use land decontamination standards they 
are  used  to  than  the  remediation  standards  required  by  the  ELD  for  biodiversity  and  water 
damage. 

The three categorical significance thresholds have to be determined on their own but should 
ensure a comparable level of application. Regarding land damage, the starting point for the 
determination of the significance of it is 'significant risk of human health' under the current 
ELD.  Hence,  there  would  not  be  much  to  be  further  specified  as  regards  damage  to  land 
within the current legislation. Alternatively, the definition could be extended to include also 

42 

 
 
'significant risk to the environment', thus aligning it with most national systems, and lowering 
the relatively higher threshold compared with biodiversity damage and water damage. Apart 
from this, a more precise determination of land damage would need to refer to set limit values 
for certain pollutants in certain soil types etc., an exercise which may be very complex at EU 
level.  While  the  task  would  be  in  principle  feasible,  the  effort  (costs)  to  be  invested  in  the 
development of highly complex determination criteria for the significance threshold of land 
damage,  varying  from  many  different  situations,  regions  and  Member  States  appears  to  be 
disproportionate  to  the  gain  as  an  individual  assessment  may  in  the  end  be  necessary  even 
within a complex framework of determination criteria. 

It  should  be  emphasized  that  even  in  the  case  of  further  determining  and/or  clarifying 
significance  criteria,  an  individual  assessment  of  the  significance  of  the  damage  is  always 
necessary. The complexity of it depends on various factors on the site, determined by the size 
and complexity (scope) of the damage, the type and size of the damaged  natural resources, 
their regeneration capacity etc. but also on the availability of good data for the determination 
of the baseline condition and/or  of risk analysis made before. Despite the progress made at 
EU level and in particular in certain MS in the last years105, there seems to be overall a great 
further potential for the development of sectorial and individual risk analyses and data bases 
for the determination of the baseline condition. 

Summing  up,  the  divergent  application  of  the  significance  thresholds  might  hamper  the  level 
playing  field  for  industries  in  the  EU,  hamper  the  development  of  adequate  financial  security 
instruments  and  markets  and  hamper  overall  the  effectiveness  of  the  Directive.  Further 
clarification as regards the significance threshold could help all practitioners and stakeholders in 
the application and enhance the effectiveness of the Directive. 

6.3.  Efficiency 

What  are  the  costs  and  benefits  (monetary  and  non-monetary)  associated  with  compliance 
with the Directive in the Member States and in the EU? 

Compliance costs of the ELD are pursuant to its main objective in the first place related to costs 
for  measures  to  prevent  and  remedy  environmental  damage  taken  by  the  liable  operators 
(internalisation of external effects). The total costs of the 137 cases where MS reported costs, 
amounted to €5,821, 238 if five major losses are excluded (which amounted alone to a total of 
€173,711,841),  as  indicated  abov e.  These  costs  can  be  widened  to  costs  of  potential  liable 
operators  for  taking  precautionary  measures  in  order  to  prevent  any  future  environmental 
damage, most notably costs for taking out financial security in order to be able to bear potential 
liabilities related to the ELD. 

Further costs can be related to competent authorities for the setting up of the system, i.e. one-off 
costs at the beginning as well as some costs for the maintenance of the system and compliance 
promotion,  such  as  awareness  raising,  information  of  stakeholders,  training  of  officials, 
developing  and  providing  of  guidance  and/or  of  supportive  and  capacity  building  tools  for 
operators and officials (risk analysis tools, damage cost estimation tools etc.). 

105 In this context mention could be made for example of the internet tools developed in Spain (MORA methodology and software tool, 
four  sectoral  environmental  risk  analyses  etc.)  for  free  for  operators  and  other  ELD  users,  or  in  Germany  (ZÜRS  database  used  by 
insurance) helping in the individual significance determination. 

43 

 
 
                                                            
Information  on  compliance  costs  is  so  far  only  fragmentary.  Remediation  (and  preventive) 
costs and administrative costs should be distinguished to highlight the basic rationale of the 
Directive  -  the  internalisation  of  external  costs  through  the  application  of  the  polluter-pays 
principle. 

Remediation (and prevention) costs: 

These are the costs for the prevention of damage and the restoration of the damaged natural 
resources to be borne by the liable person pursuant to the polluter-pays principle. The costs 
are  defined  broadly  in  the  Directive106  and  should  thus  not  fall  on  the  public  purse 
(internalised costs according to the polluter-pays principle). But where not otherwise possible 
(liable operator not identifiable and competent authority has stepped in either on the basis of 
a national obligation or due to a political decision) such costs sometimes are also borne by the 
public107. 

According to the 2013 Member State reports, the remediation costs turn on  the average  for 
one  environmental  liability  case  around  €42,000,  if  the  cases  exceeding  €1  million 108  are 
disregarded  (see  above  chapter  on  'costs'  within  the  section  on  'implementation').109  As 
pointed out, these costs are not additional costs but a different incidence of who pays. 

A recent survey of EU industry on the experience gained in the implementation of the ELD 
revealed that most of those operators who had made experience in prevention or remediation 
of environmental damage found that the overall process was efficient and cost effective and 
that the operators' costs were generally proportional to the societal benefits.110 

Administrative costs for public authorities: 

Administrative costs under the ELD are only those who are not borne by the liable operators, 
i.e. cannot be recovered from them. They relate for example to the manpower, equipment and 
other administrative costs which are – apart from the initial set-up costs at the beginning of 
the implementation – those continuous costs which cannot be recovered from liable operators 
(system maintenance and compliance promotion as outlined above). 

Only a few Member States provided information and data on administrative costs: By way of 
(gross)  of  annual 
examples,  the  Flemish  Region  of  Belgium  indicated  €55,000/year 
administrative costs, Bulgaria €135,613 per ye ar (265,975 Bulgarian Lev) and Spain overall 
€20,000 per year in staff costs, and between 
of the autonomous communities and cities in Spain. 

€684,000 and €2 million of administrative costs 

106 "… ‘costs' means costs which are justified by the need to ensure the proper and effective implementation of this Directive including the 
costs of assessing environmental damage, an imminent threat of such damage, alternatives for action as well as the administrative, legal, 
and enforcement costs, the costs of data collection and other general costs, monitoring and supervision costs." (Article 2(16) ELD). 

107 Community-pays principle. 

108 Altogether two cases exceeded the threshold of €10 million (and were not clearly communicated as ELD case): One Hungarian case and 
one Dutch case '(each one turning around €65 million). Otherwise only three cases ranged between €1 million and €10 million and were 
calculated (a Spanish, Greek and Swedish case). 

109  These  are  the  costs  of  environmental  damage.  The  ELD  ensures  that  these  costs  are  borne  by  the  polluter  and  not  by  society.  If 
successfully implemented, the ELD in fact relieves public budgets and society from incurring these costs; it further contributes to reducing 
damage and hence remediation costs whenever it succeeds in stimulating a preventive approach. 

110 Ad-Hoc Industry Natural Resource Management Group, Third survey of EU industry experience relative to the ongoing implementation 
of the European Union Environmental Liability Directive (ELD), June 2015. Brussels. 

44 

 
 
                                                            
  
The  environmental  benefits111  should  according  to  the  applicable  economic  valuing  and 
equivalency  analysis  correspond  to  the  remedial  and  prevention  costs.  They  include 
prevention  of  environmental  damage,  restoration  of  the  damaged  natural  resources 
(biodiversity, water and land) to their situation before the occurrence and the internalisation 
of the costs by the liable polluter. 

Are  there  significant  cost  differences  between  Member  States,  and  if  yes,  what  is  causing 
them? 

As  for  remediation  costs,  the  figures  are  to  a  much  higher  extent  available  than  for  pure 
administrative  costs  of  the  authorities.  However,  the  average  costs  per  ELD  case  in  EURO 
vary considerably between the Member States, as the below table shows. 

Table 9: Average remediation costs per Member State in EURO 

Belgium 
111,052 

Bulgaria 
20,958 

Estonia 
11,922 

Greece 
60,000112 

Hungary 
3,559113 

Latvia 
37,919 

Lithuania  Malta 
42,000 
369,375 

Romania 
295,171114 

Spain 
615,250 

Sweden 
1,070,341 

UK 
361,007 

As for administrative costs, no comparable figures exist. Belgium indicated that they have not 
seen additional administrative costs at federal State level and Hungary communicated that no 
additional  administrative  costs  were  incurred  by  the  public  administration.  Greece  reported 
about one newly created authority at central level as well as fourteen supporting Committees, 
for  the  purpose  of  the  implementation  of  environmental  liability.  Ireland  indicated  running 
costs of one person per year. Italy indicated in qualitative terms a "high amount of necessary 
human and technical resources". The United Kingdom reported an "educated guess" in the 
region of 15 full time equivalent staff years in relation to the preparation of the transposing 
legislation,  supporting  guidance,  staff  training  and  communication  activities  while  ongoing 
implementation costs are relatively modest. 

It can be concluded that where there is some indication of administrative cost differences, the 
information is by far neither systematic nor comparable and the causes for the differences are 
also  not  clear.  This  question  would  hence  need  further  research  into  data  in  order  to  draw 
reliable conclusions. 

Are external costs being efficiently internalised? 

As  much  as  the  Directive  is  effectively  applied,  external  costs  are  efficiently  internalised. 
Factors  which  potentially  limit  efficient  internalisation  of  costs  can  for  example  consist  in 

111 As environmental liability under the ELD only encompasses the pure ecological damage, there are no other benefits than environmental 
ones, for instance no compensation payments to victims or NGOs for traditional damage (health damage, property damage, economic 
loss). 

112 As confirmed by Greece in September 2015. 

113 Without counting the alumina accident at Kolontár. 

114 Corrected figure from Romania as per September 2015. 

45 

 
 
 
 
                                                            
exceptions  and  defences  or  in  insufficient  financial  security.  In  reality,  a  real  problem 
emerges  when  it  is  not  possible  to  identify  the  liable  polluter  and/or  the  polluter  becomes 
insolvent or bankrupt, which could limit significantly the internalisation of the external costs 
as well, which happens in practice according to reports from a MS group115. 

Methodologically,  neither  benchmarks  nor  measurement  tools  have  been  developed  (and 
agreed)  as  regards  the  assessment  and  measurement  of  cost  efficient  internalisation  of 
external environmental damage costs. However, industry, insurance and government experts 
often  reported  on  positive  trends  in  successfully  stepping  up  precautionary  and  preventive 
approaches leading to less environmental damage. This may be regarded at least partially as 
indicative to cost efficient internalisation. 

Taking  account  of  the  objectives  and  benefits  of  the  Directive:  is  there  evidence  that  it  has 
caused  unnecessary  administrative  burden?  Can  any  costs  be  identified  that  are  out  of 
proportion with the benefits achieved? 

In  the  context  of  the  ELD,  no  information  or  evidence  has  reached  the  Commission  on  the 
particular theme of 'unnecessary administrative burden'. Neither could any costs be identified 
which were out of proportion to the benefits achieved. To bar disproportionate costs, the ELD 
entitles the competent authorities to decide that no further remedial measures should be taken 
if the cost of the remedial measures to reach the baseline condition would be disproportionate 
to the environmental benefits116. 

What  good  practices  in  terms  of  cost-effective  implementation  of  the  Directive  in  Member 
States can be identified? 

In  general,  the  implementation  should  gradually  become  more  routine  and  cost-effective 
where  a  working  system  has  been  adapted  to  the  environmental  liability  rules,  so  that  the 
competent authorities have time to acquire some practical experience and know what to do. 
Therefore, awareness-raising, information, guidance and training are important. For example, 
the Spanish government developed some electronic tools which provide cost-free support to 
operators  as  regards  risk  assessment  and  financial  security  determination,  such  as  sectoral 
environmental  risk  analysis,  MORA117,  VANE118  and  IDM119.  However,  to  identify  cost-
effective implementation, also examples of cost-ineffective implementation would need to be 
known  or  gathered.  The  knowledge  in  this  field  is  lacking  for  all  relevant  categories  and 

115 NEPA-BRIG (Network of Environmental Protection Agencies – Better Regulation Interest Group). 

116  "…,  the  competent  authority  is  entitled  to  decide  that  no  further  remedial  measures  should  be  taken  if:  (a)  the  remedial  measures 
already taken secure that there is no longer any significant risk of adversely affecting human health, water or protected species and natural 
habitats,  and  (b)  the  cost  of  the  remedial  measures  that  should  be  taken  to  reach  baseline  condition  or  similar  level  would  be 
disproportionate to the environmental benefits to be obtained." (Annex II.1.3.3. ELD). 

117  MORA  is  a  free  monetization  tool  for  environmental  damage  (primary,  complementary,  compensatory  remediation)  enabling  the 
determination of the extent of financial guarantees, on the basis of a resource to resource equivalency approach. 

118 VANE is a decision making support tool providing guidance on the economic valuation of natural resources and ecosystem services. This 
tool was developed already prior to the Spanish ELD transposition. 

119  IDM  is  an  environmental  damage  index  simplifying  the  process  of  financial  security  which  allows  the  estimation  of  an  order  of 
magnitude associated to each risk scenario, based on primary recovery costs of natural resources that can potentially be damaged, and 
provides the operator with a free software tool for the prioritisation of risk minimisation measures. 

46 

 
 
                                                            
before some more practical experience is gathered and compared to a higher extent, it seems 
difficult to draw conclusions. 

In  general,  it  can  be  only  observed  that  good  practice  in  terms  of  cost-effective 
implementation of the Directive is always given where the required preventive actions were 
taken prior to the threat of environmental damage becoming imminent120. 

Can any measures to reduce possible administrative burdens on businesses (including SMEs 
and  micro-enterprises)  be  identified  while  maintaining  the  integrity  and  purpose  of  the 
Directive? 

Measures  to  reduce  the  administrative  burden  on  businesses  (including  SMEs  and  micro-
enterprises) while maintaining the integrity and purpose of the Directive can be identified  for 
example where the Directive's implementation has received the necessary support in order to 
kick-off  and  to  maintain  an  effectively  working  strict  liability  scheme.  National  guidance 
documents (existing in nine Member States), digital tools for operators to determine better the 
potential  risk  and  to  calculate  the  damage  (Spain,  France,  provided  for  free)  as  well  as 
promotion of awareness, information and training at national level (in many Member States), 
records  and  registries  of  ELD  cases,  etc.  pay  off  in  the  medium  and  long  term  in  terms  of 
avoiding additional costs. 

Environmental  damage  costs  for  liable  operators  can  be  also  prevented,  reduced  and  better 
handled through financial security instruments that would be matching offer and supply side 
(see next). 

Financial  security:  Is  sufficient  financial  security  for  ELD  liabilities  of  Annex  III 
operators available in all MS? 

In terms of the question whether sufficient financial security is available in the EU to cover 
ELD liabilities, the situation has changed over the last years, between the 2010 ELD report 
and  now.  The  developments  reported  by  the  insurance  sector  appear  to  be  overall 
encouraging,  at  least  with  regard  to  the  offer  of  products  available  on  the  market  to  cover 
ELD liabilities. Insurance Europe reported121 that in most markets, cover is available for all 
ELD  risks,  i.e.  including  for  complementary  and  compensatory  remediation  (in  particular 
long-standing  markets  with  growing  capacity)  and  where  insurance  pools  exist  (France, 
Spain,  Italy).  Insurance  in  those  Member  States  could  offer  even  more  capacity,  but  the 
demand would be significantly lower. The low demand may be due to the following factors: 

low reporting of incidents, 

• 
•  sub-optimal implementation of the ELD, 
• 

lower demand and lower offer in newer or emerging markets. 

While  many  markets  can  offer  products  on  a  multinational  basis,  some  markets  are  still 
limited to domestic capacity. Insurance Europe considers that the small number of reported 
ELD claims may be due to a variety of reasons, such as late transposition resulting in little 
claims being filed, meaning that sufficient statistical data cannot be gathered and analysed by 

120 See as one of many examples for instance the case presentation on an imminent threat of water damage in Scotland, Kim Bradley at 
the 3rd ELD Stakeholder Workshop on 26th November 2014:http://ec.europa.eu/environment/legal/liability/eld_workshop_26_11_2014.htm 

121 Survey of environmental liability insurance developments, June 2014. 

47 

 
 
                                                            
insurers. Further, the case database may be incomplete due to lack of reporting by national 
authorities,  and  due  to  an  incorporation  of  ELD  risks  into  other  covers,  environmental 
damage  may  be  classified  under  other  fields  (e.g.  general  liability).  ELD  incidents  in  some 
markets may be mislabelled due to classification under national pre-existing legislation (e.g. 
pollution of waterways or soil). 

The  Member  States  provided  in  their  2013  ELD  application  reports  different  feedback  on 
financial  security.  While  a  few,  rather  smaller,  MS  found  sufficient  financial  security  for 
Annex III operators still difficult, others indicated difficulties on the way forward to ensuring 
proper financial security instruments and markets, but several provided positive feedback on 
current trends. 

Should there be more harmonisation of the financial security system at EU level? 

The  Commission  had  to  examine  the  need  for  a  harmonised  mandatory  financial  security 
system  at  EU  level  in  its  2010  ELD  report.  Bulgaria,  Portugal,  Spain,  Greece,  Hungary, 
Slovakia,  Czech  Republic  and  Romania  had  decided  to  set  up  mandatory  financial  security 
schemes  at  national  level,  while  the  other  Member  States  preferred  a  voluntary  markets 
approach. The limited practical application had delayed the development of financial security 
instruments  and  markets.  Insurance  (General  Third  Party  Liability  or  Environmental 
Impairment  Liability  policies)  had  proven  to  be  the  most  popular  instrument,  followed  by 
bank  guarantees  and  other  market  based  instruments,  such  as  funds  or  bonds.  Due  to  the 
limited  practical  experience  in  the  application  of  the  ELD  at  that  time  and  the  divergent 
implementation rules, the Commission could not draw reliable conclusions on the need for a 
harmonised  system  of  mandatory  financial  security  at  EU  level.  The  Commission  therefore 
announced that it will "re-examine the option of mandatory financial security possibly even 
before  the  review  of  the  Directive  planned  for  2014  in  conjunction  with  the  Commission 
report under Article 18(2) ELD". 

In the light of recent developments showing a steady upward trend in the offer of insurance 
nearly across the whole EU and the existing differences in the legal frameworks and in the 
implementation of the ELD, the case for the introduction of a harmonised financial security 
(insurance) instrument at the EU-level is still weak and the relevant stakeholders seem to be 
largely opposed. Operators responding to a recent industry survey generally did not support 
the  implementation  of  mandatory  financial  security.  They  had  reservations  and  encouraged 
that  the  current  structure  be  given  more  time.122  It  is  widely  believed  that  tailor-made 
solutions at national level are at present the better option. However, recently a few Member 
States  have  (re-)considered  establishing  mandatory  financial  security  at  national  level, 
notably Hungary, Romania and Lithuania. 

The question of the sufficiency of ceilings in financial security emerges only in the context of 
mandatory system and remains hence in the national domain. 

Potential  for  harmonisation  of  financial  security  instruments  or  mechanisms,  such  as:                        
-  Obligation  for  competent  authorities  to  assess  the  sufficiency  of  financial  capacity  of 
operators? 

122 Ad-Hoc Industry Natural Resource Management Group, Third survey of EU industry experience relative to the ongoing implementation 
of the European Union Environmental Liability Directive (ELD). June 2015, Brussels. 

48 

 
 
 
 
 
                                                            
Obligation 

to 
- 
-  Gradual  phasing  in  of  mandatory  financial  security  at  EU  level  for  the  most  risky 
activities? 

operators 

carry 

risk 

out 

for 

assessments?                        

While  full  harmonisation  of  the  markets  and  instruments  does  not  appear  feasible  or  even 
beneficial, some elements potentially leading to economies of scale and a better level playing 
field could likely be reached through better risk assessments by operators and assessment of 
the  financial  viability  of  operators  by  authorities  in  the  context  of  granting  or  updating 
permits, licences or authorisations (modelled for example after the Offshore Safety Directive 
2013/30/EU123 or following existing national examples as for example in Ireland) in order to 
prevent that the general tax payer is burdened. 

Such  an  approach  can  be  either  complemented  or  even  replaced  by  a  self-executing 
obligation for operators to carry out better risk analysis or risk assessments following certain 
elementary requirements or performance standards. Further stepping up risk analysis on the 
basis of a set of agreed/compulsory basic elements could contribute to a more level playing 
field and reduce environmental damage. Operators should in this case work closely with the 
financial security providers on the one hand and with the competent authorities on the other 
hand. 

An alternative option would be gradual phasing in of mandatory financial security at EU level 
for the most riskiest activities (as indicated in Article 14(2) ELD and applied by some MS, 
for  instance  by  Spain),  as  for  example  for  establishments  falling  under  the  Seveso  III 
Directive124 (it could cover only the riskiest establishments, called 'upper tier establishments' 
or also the 'lower tier establishments'). Such an option could improve the cover of financial 
security where the demand is not following suit the offer, but the same concerns as mentioned 
above would need to be considered. 

Would  an  ELD  Fund  or  Industry  Risk  Sharing  Facility  be  appropriate?  Taking  into 
account persistent problems with (a) large scale damage and (b) closed operations where 
operators are not identifiable/held liable 

Problems  of  large  scale  accidents  and  insolvent  operators  who  cannot  bear  the  costs  of 
remediation  have  been  recently  brought  to  the  attention  of  the  Commission  also  by  an 
environmental  protection  network  of  Member  States  (NEPA)125.  Despite  the  undeniable 
progress in the development of markets and instruments in recent years, the specific problems 
with large scale accidents, occurring on an average around two or three times in ten years in 
the EU126, and, more generally, the insolvency or bankruptcy of liable operators who cannot 
bear the costs of remediation, persist. 

With  respect  to  the  sub-question  raised  in  the  last  ELD  report  on  the  "sufficiency  of  actual 
financial  ceilings  set  for  established  financial  security  instruments  with  regard  to  potential 

123 Cf. supra footnote 36. 

124 Directive 2012/18/EU on the control of major-accident hazards involving dangerous substances, amending and subsequently repealing 
Council Directive 96/82/EC, OJ L 197, 24.7.2012, p. 1-37. 

125 Cf. supra footnote 115. 

126  For  example  the  disastrous  accident  of  4th  October  2010  in  Kolontár/Hungary  or  the  Moerdijk  accident  of  5th  January  2011  in  the 
Netherlands. 

49 

 
 
 
  
                                                            
large  scale  accidents",  experts  provided  that  in  general  enough  financial  security  to  cover 
massive  incidents  would  be  available,  in  particular  where  permitting,  inspection  and 
enforcement systems work well and financial security markets and instruments find enough 
opportunities to develop. This may not be the case under all circumstances. However, precise 
data were not provided, except for Member States which have set up general ceilings within 
established mandatory financial security systems.127 

With  regard  to  large  scale  losses  due  to  major  accidents,  the  Commission  launched  also  a 
study to explore the feasibility of creating a fund to cover environmental liability and losses 
occurring from industrial accidents in 2012128. The study was aiming at three functions (pre-
financing  tool  for  immediate  access  to  funding  and  relief,  second  tier  security  after  private 
insurance, unspent resources to invest in safety and prevention). While some benefits could 
be  identified,  there  was  negative  feedback  from  industry  and  insurance  stakeholders  to  the 
creation of a fund or risk-pooling scheme for industrial accidents involving pollution, mainly 
due to concerns under the polluter-pays principle129 (cf. in the Annex on ELD studies). 

Are  the  optional  defences  (permit  defence  and  state-of-the-art  defence)  contributing  to 
efficiency and/or affecting the effectiveness of the Directive? 

Key  business  stakeholders  consider  the  maintenance  of  the  two  optional  defences  (permit 
defence  and  state-of-the-art  defence130)  politically  indispensable  for  the  co-operation  of 
industry131. Of the 27 MS considered by this report, twelve MS incorporated both defences 
fully and unconditionally in their transposing legislation, four MS partly, two MS in modified 
or  mitigated  form;  five  MS  have  incorporated  either  one  of  the  two  optional  defences  and 
seven MS have neither one of the defences transposed. Data on the use of the two optional 
defences are rather sketchy, but it can be assumed that these defences were used in the EU to 
a yet limited extent. 

Strict liability is for hazardous activities economically more efficient than fault liability. The 
effectiveness of a strict liability regime can be reduced through exceptions and defences, in 
particular  if  they  are  too  many.  This  is  so  because  a  strict  liability  regime  should  normally 
provide  optimal 
towards  preventing 
environmental  damage.  Such  strict  liability  rule  does  furthermore  not  have  so  high 

take  precautions 

incentives  for 

individuals 

to 

127 For example, Spain introduced a ceiling to the liability cover their operators of a maximum of € 20 million. 

128 Study to explore the feasibility of creating a fund to cover environmental liability and losses occurring from industrial accidents, Final 
report prepared for European Commission, DG ENV. 

129 Among arguments on the design of the fund (threshold, management etc.) and other issues, concerns were mainly raised with regard 
to the potential to hinder the development of the environmental insurance market (competition with similar products offered by private 
insurance schemes), and that a fund could undermine the polluter-pays principle ('moral hazard'). 

130  Member  States  can  decide  whether  to  incorporate  these  two  defences  into  their  transposing  legislation  or  not:  the  permit  defence 
allows an operator who invokes it successfully to  exonerate himself from environmental liability if he demonstrates that he  was not at 
fault and that he acted in conformity with the authorisation and all conditions based thereof when causing a damage; the development 
risk defence allows the operator to free himself of liability if he demonstrates that he was not at fault and that the risk was not known 
according  to  the  state  of  scientific  knowledge  at  the  time  when  the  emission  was  released  or  the  activity  took  place  leading  to  the 
damage.  

131 Communications/letters from the Ad-Hoc Natural Resource Management Industry Group, CEFIC and Insurance Europe. 

50 

 
 
                                                            
 
information costs as a negligence rule and from a compensation point of view it ensures full 
compensation of damage. The latter might not be the case for negligence132. 

Criticism  from  an  economic  efficiency  oriented  point  of  view  has  expressed  that  the 
'restricted scope' of the ELD, in particular the availability of the permit and the state-of-the-
art  defence  undermine  the  strong  incentive  for  liable  operators  to invest  in  risk  minimising 
technologies  and  to  take  precautionary  measures.133  From  a  legal  point  it  was  moreover 
criticised  that  these  defences  take  back  with  one  hand  what  the  other  hand  had  established 
(strict liability), i.e. create a sort of (mitigated) fault-based standard. 

Is streamlining, harmonisation, simplification of the optional defences indicated from the 
practical  experience?  If  harmonisation,  which  one  should  be  made  mandatory:    delete 
them – include as mitigating factors – include as exemptions – narrow defences? 

The empirical assessment with regard to the impact of the availability of such defences on the 
number of ELD cases (not entirely identical with the efficiency and probably more indicative 
to  the  effectiveness  of  the  ELD)  is  not  very  conclusive:  While  some  MS  with  the  highest 
number  of  cases  indeed  do  not  allow  for  the  defences  to  be  invoked  by  strictly  liable 
operators134,  other  MS  with  a  higher  number  of  ELD  cases  have  incorporated  them135  and 
some who did not allow both defences (i.e. made the operators strictly liable without offering 
the defences) have nonetheless no or a small number of cases136. 

The  ELD  Effectiveness  Study  suggests  that  only  a  deletion  would  mainstream  the  current 
patchwork  situation  with  regard  to  the  optional  defences  (as  Article  16(1)  ELD  reflecting 
Article 193 TFEU would allow MS not using them anyway). However, the negative feedback 
from main stakeholders should be considered appropriately. This would indicate that deletion 
of the defences is not a viable option. 

6.4.  Coherence 

To what extent is the Directive satisfactorily integrated and coherent with other parts of EU 
environmental law/policy, including Environmental Impact Assessment Directive, Industrial 
Emissions Directive? 

Coherence  between  the  ELD  and  other  parts  of  EU  environmental  law  as  well  as  with  the 
relevant  international  conventions  listed  in  Annexes  IV  and  V  ELD  is  relevant  as  the 
Directive  is  a  cross-cutting  instrument.  In  general,  the  coherence  is  given  and  it  is 
satisfactorily  integrated  in  the  EU  acquis,  supplementing  other  environmental  legislation. 
Some  issues,  such  as  the  coherence  between  the  ELD  and  the  directives  treated  below,  as 
well  as  between  the  ELD  and  some  international  maritime  conventions  mentioned  below, 
have however been raised by stakeholders and have been addressed by the evaluation studies.  

132 Under negligence, the polluter does not have to compensate (remedy) if he fulfilled the due care standard. 

133 This is not based on individual experience with the ELD but rather drawing from general experience on the relationship between strict 
liability  enforcement  and  exceptions,  as  reflected  in  the  economic  theory  of  the  law  looking  into the  efficiency  of  a  liability  system  (cf. 
Kristel de Smedt, Environmental Liability in a Federal System). 

134 Germany, Hungary, Poland. 

135 Greece, Latvia, Spain. 

136 Austria, Belgium (partly), Bulgaria, Ireland, Slovenia. 

51 

 
 
                                                            
It can be concluded that no relevant incoherence had been detected in particular regarding the 
relationship  between  the  ELD  and  the  Environmental  Impact  Assessment  Directive137,  the 
Industrial  Emission  Directive138,  the  waste  management  directives  and  other  environmental 
directives,  with  the  exception  of  the  Habitats  Directive139  and  the  Water  Framework 
Directive140. 

Is there scope for policy integration with other policy objectives? 

There  is  scope  for  policy  integration  with  other  policy  objectives.  As  there  is  an  important 
scope  for  policy  integration  with  the  Habitats  Directive  (halting  biodiversity  loss),  the 
interface between both instruments were assessed in detail, not least due to the requirements 
pursuant to the ELD141 and the conclusions from the 2010 ELD report142 (see in more detail 
further below under the next question).143 

The  coherence  with  the  Water  Framework  Directive  (WFD)  concerning  water  damage  is 
another  important  point.  Some  MS  apply  a  broader  approach  referring  to  'waters'  (derived 
from  the  definition  of  'water  damage'  in  the  ELD),  thus  allowing  determination  of  the 
significance  of  the  damage  according  to  the  individual  incidents  or  emissions  without 
reference  to  the  bigger  geographical  reference  of  'water  body'.  Other  MS  apply  a  narrower 
approach  referring  to  'water  bodies'  (definition  deriving  from  the  water  status  and  water 
management  requirements  under  the  WFD).  'Water  bodies'  are  however  normally  in  size 
much  larger  as  referential  point  than  'waters'.  That  means  that  if  the  whole  'water  body'  is 
used as referential point, it is less likely that a 'significant damage' will be determined that if 
only  'water'  as  referential  point  is  used.  The  criteria  for  significance  are  embodied  in  the 
assessment  of  water  status  in  accordance  with  the  WFD,  hence  a  reference  to  'waters' 
different from 'water bodies' may present difficulties in being coherent with the WFD. It can 
be  concluded  that  the  current  legislation  (ELD  and  WFD)  with  regard  to  the  use  of  'water 
bodies' as referential point ensures coherence. 

Are there overlaps, gaps and/or inconsistencies that significantly hamper the achievements of 
the  objectives?  In  particular,  to  what  extent  are  there  inconsistencies  or  incoherent 
requirements  between  the  Directive  and  the  Habitats  Directive?  Significance  threshold  and 
favourable conservation status, in particular: to what extent is the geographical reference in 
the  determination  of  favourable  conservation  status  in  the  Directive  coherent  with  the 
Habitats Directive and the objective of the ELD to prevent and remedy biodiversity damage? 

137 Directive 2011/92/EU on the assessment of the effects of certain public and private projects on the environment, OJ L 26, 28.1.2012, 
p.1. 

138 Directive 2010/75/EU on industrial emissions (integrated pollution prevention and control), OJ L 334, 17.12.2010, p. 17. 

139 See footnote 22 above. 

140 See footnote 23 above. 

141  "The  report,  …  shall  include  a  review  of:  …  (c)  the  application  of  this  Directive  in  relation  to  protected  species  and  natural  habitats" 
(Article 18(3)(c) ELD). 

142 "… the uneven extension of the scope to cover damage to species and natural habitats protected under domestic legislation" (p. 11). 

143 While not part of this evaluation, reference should be made nevertheless to other relevant ongoing developments with potential links 
to this REFIT evaluation, such as the ongoing REFIT evaluation of EU nature legislation, Regulation EU No 1143/2014 on the prevention and 
management of the introduction and spread of invasive alien species, OJ L 317, 4.11.2014, p. 35 which also implements the polluter-pays 
principle,  and  to  policy  initiatives  and  documents  under  preparation  such  as  the  development  of  national  restoration  prioritisation 
framework and options for a potential EU No Net Loss initiative. 

52 

 
 
                                                            
 
The Biodiversity Damage Study144 looked into the potential for increasing the level playing 
field through a harmonised scope of 'protected species and natural habitats', as half of the MS 
have an extended scope and the other half has a scope limited to the EU scope (both in line 
with the option provided  in Article 2(3)(c) of the Directive145). A binding extension of the 
scope  to  include  purely  nationally  protected  natural  habitats  and  species  may  however  be 
legally  difficult  due  to  national  competence  and  may  not  entail  better  harmonisation  as  the 
current  national  scopes  regarding  protected  species  and  natural  habitats  differ  sometimes 
widely. 

Coherence issues between both directives relate to the notions of 'significant damage' and of 
'favourable  conservation  status'.  Some  Member  States  consider  the  ELD  regime  only 
applicable in case of 'severe' biodiversity damage and others apply it for significant damage. 
While the Habitats Directive and the ELD share the same goal to ensure the maintenance and 
restoration  of  protected  species  and  natural  habitats  at  a  favourable  conservation  status  by 
complementary  means,  the  threshold  for  defining  significant  damage  under  the  ELD  and 
under  Article  6(2)  of  the  Habitats  Directive  have  been  interpreted  differently,  leading  to 
differences  in  the  application  between  Member  States.  While  Article  6(2)  of  the  Habitats 
Directive  requires  Member  States  to  avoid  habitat  deterioration  and  significant  species 
disturbance  within  SACs146  (i.e.  requires  just  habitat  deterioration,  not  'significant'  habitat 
deterioration,  not  to  speak  of  'severe'  damage),  the  ELD  requires  'significant  damage'.  The 
need  for  a  more  consistent  application  and  better  clarification  of  the  term  and  threshold  of 
'significant  damage'  was  also  pointed  out  by  several  stakeholders  (including  for  instance 
Insurance  Europe)  and  was  mentioned  often  in  the  ELD  trainings  (mainly  by    competent 
authorities) as a core issue. 

The geographical reference of the 'favourable conservation status' in Article 2(4) of the ELD 
(referring to "as the case may be, the European territory of the Member States to which the 
treaty applies or the territory of a Member State or the natural range") has shown difficulties 
in  practical  application.  It  is  however  often  handled  in  a  pragmatic  way,  and  like  this 
pragmatic approach it should be clarified that a site-related approach is required for effective 
implementation, as pointed out by the Biodiversity Damage Study. 

Further, the concept of 'preventive measures' is according to the Biodiversity Damage Study 
often  not  applied  correctly  if  action  to  prevent  biodiversity  damage  from  becoming 
significant is dependent on the wrong understanding that preventive action can only be taken 
if significance of the future damage is certain. Such an understanding could in extremis avoid 
the  application  of  the  ELD  forever.  Many  Member  States  therefore  use  a  more  reasonable 
approach  requiring  for  example  "reasonable  grounds  to  believe  that  imminent  threat  will 
become environmental damage". 

Is  the  Directive  coherent  with  respect  to  the  application  of  the  International  Conventions 
listed in Annex IV (mainly IMO Conventions) and Annex V (International Conventions on 
third party liability for nuclear damage):   What  are  the  differences?  Advantages  and 
disadvantages compared with ELD? 

144  Milieu  Ltd.,  IUCN,  Experience  gained  in  the  application  of  ELD  biodiversity  damage.  Final  report  for  the  European  Commission,  DG 
Environment. Brussels, February 2014. 

145 "… 'protected species and natural habitats' means: (a) …; and (c) where a Member State so decides, any habitat or species, not listed in 
those Annexes which the Member State designates for equivalent purposes as those laid down in these two Directives". 

146 Special Area of Conservation as defined in Article 4 of the Habitats Directive. 

53 

 
 
                                                            
Another  area  of  potential  incoherence  was  investigated  due  to  the  requirement  in  the  ELD  to 
look  into  the  application  of  the  exceptions  of  Directive  with  respect  to  the  international 
conventions  listed  in  Annex  IV  (mainly  IMO  Conventions)  and  Annex  V  (international 
conventions  on  third  party  liability  for  nuclear  damage)147.  There  is  broadly  coherence  but  an 
issue remains with regard to the environmental remediation standards. The answer to the above 
question is developed along this and the next question. 

While  the  ELD  provides  for  a  high  level  of  remediation  standards,  including  primary, 
complementary  and  compensatory  remediation  of  ecological  damage,  the  IMO  and  related 
conventions148  include  less  elaborate  terms,  such  as  "reasonable  measures  …  to  prevent  or 
minimize pollution damage" and "compensation for impairment of the environment … limited 
to costs of reasonable measures of reinstatement". On the other hand, the conventions include 
features  which  make  their  system  attractive,  such  as  strict  liability  for  pollution  damage149 
without  a  significance  threshold,  channelling  of  liability  to  the  ship-owner,  mandatory 
financial security for specific types of pollution damage (e.g. damage caused by persistent oil 
carried  in  tankers,  or  by  dangerous  chemicals  carried  in  bulk  or  packaged  form),150  and  a 
right of direct recourse against the insurer. The most advanced system  of liability has been 
created for the oil pollution context, where there are three-tiers of liability for compensation 
for  damages  resulting  from  the  carriage  of  oil  by  sea  in  tankers.  The  first  tier  is  the 
shipowner's  liability  (covered  by  mandatory  insurance)  in  accordance  with  the  1992  CLC 
Convention. The second tier is a compensation fund – the IOPC Fund – covering pollution 
damage that exceeds the shipowner's liability. Finally, there is a third tier – the International 
Supplementary Fund created in 2003 – covering pollution damage that exceeds the threshold 
of  the  IOPC  Fund  (total  amount  reaching  approximately  1  billion  US  dollars).  This  system 
has  a  world-wide  scope  of  application  with  130  Contracting  Parties  to  the  1992  CLC 
Convention, 111 Contracting Parties to the 1992 IOPC Fund Convention and 31 Contracting 
Parties  to  the  2003  Supplementary  Fund  Protocol.  In  this  context,  consideration  should  be 
also  given  to  the  fact  that  the  existing  international  conventions  explicitly  prohibit  any 
additional  compensation  claims  for  damages  covered  thereby  to  be  made  other  than  in 
accordance with their own provisions. 

If  the  prevention/remedial  standards  in  International  Instruments  are  lower:  Is  the 
difference minor or else justifiable or should there be adaptation and which one? 

The remaining issue consists therefore only in the fact that the maritime conventions provide 
at present only for primary and complementary remediation of damage to the environment, as 
well as preventive measures, while the definition of relevant damage is narrower than in the 

147 "The report … shall include a review of: (a) the application of Article 4(2) and (4) in relation to the exclusion of pollution covered by the 
international instruments listed in Annexes IV and V from the scope of this Directive, and Article 4(3) in relation to the right of an operator 
to limit his liability in accordance with the international conventions referred to in Article 4(3)." (Article 18(3)(a) ELD). 

148  International  Convention  of  27  November  1992  on  Civil  Liability  for  Oil  Pollution  Damage  (1992  Civil  Liability  Convention  or  CLC); 
International Convention of 27 November 1992 on the Establishment of an International Fund for Compensation for Oil Pollution Damage 
(1992  Fund  Convention);  International  Convention  of  23  March  2001  on  Civil  Liability  for  Bunker  Oil  Pollution  Damage  (Bunker  Oil 
Convention); International Convention of 23 March 2001 on Civil Liability and Compensation for Damage in Connection with the Carriage 
of  Hazardous  and  Noxious  Substances  by  Sea  (HNS  Convention);  Convention  of  10  October  1989  on  Civil  Liability  for  Damage  Caused 
during Carriage of Dangerous Goods by Road, Rail and Inland Navigation Vessels (Dangerous Goods Convention). 

149 Cf. supra footnote on 'pollution damage' and its relationship to 'traditional' and 'environmental' damage under the ELD. 

150  These  mandatory  financial  security  requirements  for  specific  types  of  damage  are  in  addition  to  the  requirement  for  shipowners 
registered  in  EU  Member  States  or  entering  an  EU  port  to  have  insurance  for  general  maritime  claims,  in  accordance  with  Directive 
2009/20/EC on the insurance of shipowners for maritime claims, OJ L 131, 28.5.2009, p. 128. 

54 

 
 
 
                                                            
ELD. This issue could however be addressed by non-legislative means, in particular through 
working towards a common understanding closing the gap between the conventions and the 
ELD in that regard. For instance, the IOPC Funds have revised their 'Claims Manual' in 2008 
to include under 'environmental damage' measures to re-establish a biological community in 
areas affected by an oil spill in order to enhance the natural recovery, as well as the cost of 
post-spill  studies  (see  Claims  Manual  2008,  Section  3.6),  and  similar  developments  are 
envisaged  under  other  conventions,  e.g.  the  HNS  Convention.  These  developments  are 
encouraging with a view to bridging the current gap as regards the level of the remediation 
standards between the conventions and the ELD. 

The International Oil Pollution Compensation Funds (IOPC Funds) provided a report on the 
costs of preventive measures and impairment of the environment following all oil pollution 
incidents from tankers between 2002 and 2013 covering 14 incidents across the world since 
2002  with  payments  about  £18.7  million  in  compensation  for  clean-up  and  preventive 
measures.151 Supplementing the report of the IOPC Funds, the International Group of P & I 
Clubs,  in  cooperation  with  the  International  Tanker  Owners  Pollution  Federation  (ITOPF), 
reported comprehensive data on around 120 incidents involving pollution from tankers in EU 
waters  within  the  reporting  period  30  April  2007  to  30  April  2013.  Overall,  it  seems  that 
containment  and  clean-up  measures  at  sea  and  at  the  shoreline  covered  also  environmental 
remediation activities to a certain extent. None of the incidents in Europe have exceeded the 
limitation amounts for compensation under the international conventions. 

Similar  to  the  conventions  listed  in  Annex  IV,  the  nuclear  conventions  in  Annex  V  are 
focused  on  compensation  for  victims  of  nuclear  incidents  with  a  limited  cover  of  pure 
ecological damage. While there are some differences between the Paris Convention and the 
Vienna Convention in the limitation of the amounts set for the liability of nuclear operators 
and  the  level  of  financial  security  required  (leading  to  some  differences  between  EU  MS, 
depending  on  which  convention  they  have  ratified)  they  both  do  not  establish  a  regime  to 
prevent  or  remedy  environmental  damage  and  the  definition  of  'nuclear  damage'  remains 
unclear.    However,  if  the  ELD  was  applicable  to  some  radio-active  incidents152  occurred 
within  the  reporting  period,  the  potential  outcome  would  not  have  been  different  as  in  the 
absence of significant environmental damage the ELD would not have been applied. 

As  the  ELD  Effectiveness  Study  pointed  out,  it  is  impossible  to  come  to  a  conclusion 
regarding the effectiveness of the conventions listed in Annex V because no nuclear incidents 
have fallen under their scope and in addition, the 2004 Protocol to the Paris Convention has 
not  yet  entered  into  force.  Moreover,  account  should  be  taken  of  the  consideration  that 
environmental nuclear liability falls under the remit of the Euratom Treaty rather than of the 
TFEU for the reasons that nuclear liability and not environmental protection is the dominant 
objective, that application of the TFEU could create controversial consequences to the field 
of nuclear liability and the Euratom Treaty should be considered as lex generalis in relation 
with environmental nuclear liability. 

After  weighing  advantages  against  disadvantages,  the  answer  to  the  questions  on  the 
coherence  of  the  ELD  with  the  international  conventions  in  Annex  IV  and  V  and  as  to 

151 This is excluding compensation paid for the accident of the oil tanker 'Prestige', where proceedings are still ongoing at present and for 
which payments of approximately £120 million have been made in total so far. 

152 Sellafield radioactive bags April 2010, Tricastin nuclear leak July 2008, Ascó NPP leak November 2007. 

55 

 
 
 
 
 
                                                            
whether the eventual difference in remediation standards between these regimes is minor or 
else  justifiable,  is  that  the  exemptions  in  Article  4  regarding  the  international  instruments 
should not be lifted for the time being, but work should continue to close the gaps in terms of 
the  environmental  remediation  standards  by  way  of  guidance  and  gradual  adaptation  of 
practical  application  to  the  ELD  standards  in  the  work  within  the  relevant  international 
instruments. 

Finally, as regards the HNS Convention as amended by the 2010 Protocol,153 which has no 
ratifications yet, the possibility of its deletion from the list of IMO Conventions in Annex IV 
should be further examined, unless clear evidence of the Member States' joint commitment to 
conclude this international convention arises. The Commission has put forward a proposal to 
allow  its  ratification  by  Member  States  in  the  interest  of  the  Union,154  which  is  presently 
under discussion in Council. The ELD currently applies to environmental damage related to 
the  carriage  of  HNS  by  sea  in  all  Member  States;  yet,  there  is  no  available  data  on  the 
application of the Directive in any such incidents. 

Is  the  Directive  coherent  with  respect  to  environmental  damage  caused  by  genetically 
modified organisms (GMOs), particularly in the light of experience gained within relevant 
international for a and Conventions?155 

There  were  no  incidents  of  environmental  damage  caused  by  GMOs  in  the  EU  within  the 
reporting period. 

Article 27 of the Cartagena Protocol mandated the Conference of the Parties serving as the 
Meeting of the Parties (COP/MOP) to start a process for the elaboration of appropriate rules 
and procedures on liability and redress at its first meeting. The negotiations of the European 
Union were conducted solely on the legal basis of the Environmental Liability Directive with 
regard to administrative liability. 

The  "Nagoya-Kuala  Lumpur  Supplementary  Protocol  on  Liability  and  Redress  to  the 
Cartagena Protocol on Biosafety" was formally adopted by the final plenary of COP/MOP5 
on 15 October 2010. The adopted Supplementary Protocol is fully consistent with the acquis, 
and no  further action  at Union  level  was necessary to formally conclude the agreement. 24 
Member States and the European Union signed the Supplementary Protocol by the deadline 
of 6 March 2012 and since then the European Union and a growing number of Member States 
have already accepted, approved or acceded to the Protocol. The Protocol will enter into force 
on  the  19th  day  after  the  date  of  deposit  of  the  40th  instrument  of  ratification,  acceptance, 
approval or accession (Article 18). 

It  can  hence  be  concluded  that  the  ELD  remains  the  legal  basis  for  the  European  Union  to 
implement  the  Nagoya-Kuala  Lumpur  Supplementary  Protocol  on  Liability  and  Redress  to 

153 See footnote 148. 

154 COM(2015) 304final, adopted on 22.6.2015. 

155 According to Article 18(3)(b) ELD, the report shall include a review of "the application of this Directive to environmental damage caused 
by genetically modified organisms (GMOs), particularly in the light of experience gained within relevant international fora and Conventions, 
such  as  the  Convention  on  Biological  Diversity  and  the  Cartagena  Protocol  on  Biosafety,  as  well  as  the  results  of  any  incidents  of 
environmental damage caused by GMOs". 

56 

 
 
 
 
                                                            
 
the Cartagena Protocol on Biosafety and that no reason for any modification to the ELD on 
the ground of experience with its application to environmental damage caused by genetically 
modified organisms has been identified. 

Are  other  instruments  eligible  for  incorporation  into  Annexes  IV  or  V?  E.g.  OPOL 
scheme, Offshore Protocol under the Barcelona Convention? 

As  the  ELD  also  required  a  review  of  the  potential  need  for  incorporation  of  other 
instruments  into  Annexes  IV  or  V156,  and  after  having  considered  the  potential  candidates 
(Offshore  Protocol  to  the  Barcelona  Convention  for  the  Protection  of  the  Marine 
Environment  and  Coastal  Region  of  the  Mediterranean,  the  Protocol  of  Civil  Liability  and 
Compensation for Damage Caused by the Transboundary Effects of Industrial Accidents on 
Transboundary Waters and the Nagoya-Kuala Lumpur Supplementary Protocol on Liability 
and Redress to the Cartagena Protocol on Biosafety), the evaluation in the ELD Effectiveness 
Study has not shown a need to extend Annex IV or V of the ELD. 

Recently,  the  Shipowners  Associations  and  the  IOPC  Funds  brought  to  the  attention  of  the 
Commission  that  the  Ship  Wrecks  Convention  and  the  2003  Supplementary  Funds 
Convention  may  be  instruments  potentially  to  be  incorporated  into  Annex  IV  of  the  ELD. 
This suggestion could be further considered in any future revision of the ELD. 

6.5.  Complementarity 

To  what  extent  does  the  ELD  support  and  usefully  supplement  other  instruments  or 
policies? 

In  the  case  of  the  ELD,  it  is  mainly  biodiversity  policy  and  water  policy  which  is 
complemented.  The  ELD  supports  the  objectives  of  the  Habitats  Directive  and  Birds 
Directive as well as of the Water Framework Directive and the Marine Strategy Framework 
Directive  as  an  ex-post  instrument  after  damage  has  occurred  but  also  as  an  additional 
incentive  to  prevent  any  damage  through  full  compliance  with  the  requirements  of  those 
related directives. 

In  the  marine  area,  the  complementarity  of  the  ELD  with  the  OSD  (Offshore  Safety 
Directive)  as  regards  damage  to  biodiversity  and  to  water  through  offshore  of  oil  and  gas 
activities is especially important. The OSD depends on the ELD with respect to liability and 
remediation  of  environmental  damage  but  channels  strict  liability  to  the  licensee  in 
modification  to  the  ELD  where  the  basic  rule  is  the  channelling  of  strict  liability  to  the 
operator.157 

However, in turn it needs to be said that the success of the ELD is therefore to a certain extent 
dependent  on  the  functioning  of  the  aforementioned  directives.  If  problems  or  challenges 
persist  with  those  Directives,  the  ELD  will  be  most  likely  affected  and  may  not  always 
overcome these issues. 

156 "The report … shall include a review of: (d) the instruments that may be eligible for incorporation into Annexes III, IV and V." (Article 
18(3)(d) ELD). 

157 Article 7 OSD reads: "Without prejudice to the existing scope of liability relating to the prevention and remediation of environmental 
damage  pursuant  to  Directive  2004/35/EC,  Member  States  shall  ensure  that  the  licensee  is  financially  liable  for  the  prevention  and 
remediation of environmental damage as defined in that Directive, caused by offshore oil and gas operations carried out by, or on behalf 
of, the licensee or the operator." 

57 

 
 
                                                            
As to land damage, the ELD is one of the few policies tackling the ecological value of soil. 
Though  the  IED  has  also  introduced  a  layer  of  soil  protection  for  certain  installations  in 
Europa,  there  is  no  more  common  legislation  complementing  the  ELD  on  the  protection  of 
soil resources. Thus, by demanding remedial action, the ELD contributes to a minimum level 
of good environmental status in this field. 

Complementarity  is  not  only  depending  on  other  EU  policies  but  also  framed  by 
implementation  in  a  complex  environment  (see above  figure  1  on  the  intervention  logic,  in 
particular 'other EU policies' and 'external factors'). 

6.6.  EU-added value 

What has been the EU added value and what do you think would happen if EU action were 
repealed? 

The  main  EU-added  value  consists  in  the  preventative  nature  of  the  ELD,  remediation  of 
environmental damage to the baseline condition (restitutio in integrum), in particular through 
primary,  complementary  and  compensatory  remediation  of  damaged  natural  resources 
through the use of economic valuation methods; the inclusion of biodiversity damage in the 
scope  of  environmental  damage;  and  public  participation  and  access  to  justice  in 
environmental liability. 

The abovementioned features have been reached so far to a varying degree. While overall the 
Directive has gained more practical application resulting in better environmental protection, 
some features appear to remain particularly under-used as especially the complementary and 
compensatory  remediation  methods,  which  could  potentially  ensure  better  environmental 
outcomes than currently exist. From the practical experience it was  also often mentioned that 
the Directive boosted a precautionary approach (contributed to the deterrent effect) which had 
in particular also an enhancing effect on the  offer of environmental liability  insurance with 
the result that less environmental damage instances are occurring. 

As  shown  further  above  on  effectiveness,  it  is  summed  up  here  that  the  Directive  has  been 
overall effective with however the fact of the quite varying degree across the EU. The ELD 
has been effective in some Member States but less so in others (eleven Member States have 
not reported any ELD case for the period between May 2007 and April 2013). 

If  the  Directive  was  not  in  place,  what  would  be  the  response  needed  to  implement  the 
international obligations under the Nagoya – Kuala Lumpur Supplementary Protocol and 
would  a  new  implementing  instrument  need  to  be  developed  and  adopted  at  EU  level  in 
order to comply with the N-KL SP? 

There would be an unwanted effect with special regard to the international obligations under 
the  Nagoya  –  Kuala  Lumpur  Supplementary  Protocol  on  Liability  and  Redress  which  is 
implemented by the EU and its Member States through the ELD. The negative result would 
be that a new implementing instrument would be needed to be developed and adopted at EU 
level in order to comply with the requirements under this Supplementary Protocol. 

Do the issues addressed by the Directive continue to require action at EU level? 

The  question  can  be  addressed  by  various  ways,  and  to  begin  with  by  asking  what  would 
happen if the Directive were repealed? If EU action were repealed, it may perhaps not change 
much  as  by  now  all  MS  have  transposed  the  ELD  into  domestic  legislation  and  started  to 

58 

 
 
 
become  acquainted,  hence  the  large  majority  would  presumably  continue  as  before.  In 
addition, it would be difficult to anticipate future developments at MS level. Depending on 
the individual position of each MS, Member States could act as they deem appropriate and 
may  lower  or  abolish  the  prevention  and  remediation  requirements  or  replace  the  polluter-
pays principle by another principle of cost allocation (beneficiary-pays principle, community-
pays  principle,  ability-to-pay  principle).  Furthermore,  in  the  absence  of  dedicated  EU 
legislation  on  soil,  without  the  ELD  would  be  even  less  obligation  in  Europe  to  cope  with 
environmental damages affecting soil resources. 

The issues addressed by the Directive continue therefore to require action at EU level because 
in  particular  transboundary  damage  needs  to  be  addressed  not  only  in  relation  to  the 
tranfrontier  transport  of  genetically  modified  organisms  (Nagoya  -  Kuala  Lumpur 
Supplementary  Protocol),  but  also  for  other  categories  of  transboundary  environmental 
damage, such as transboundary water damage where the ELD was a relevant justification for 
the EU and its Member States not to accede to the Kiev Protocol.158 

What  has  been  the  practical  significance  of  the  Directive  as  compared  to  (pre-)existing 
national legislation? 

The  advantages  in  terms  of  practical  significance  of  the  Directive  as  compared  to  (pre-) 
existing  national  legislation  consist  of  more  and  better  restoration  of  damaged  natural 
resources, in particular regarding protected natural habitats and species through the methods 
and means in its Annex II (primary, complementary, compensatory remediation). This effect 
could  be  significantly  further  enhanced  through  practical  support  and  capacity  building 
measures, in particular through targeted ELD trainings for practitioners and stakeholders. The 
lack of expertise, data and information can be remedied through the gradual establishment of 
an  EU-wide  ELD  expert  network  or  ELD  damage assessment centre, through  interpretative 
guidance and through and EU-wide ELD data registry. Further, a strict enforcement is key in 
order to benefit fully from the functioning of strict liability, i.e. harvesting fully the efficiency 
gains,  including  tackling  appropriately  the  remaining  issues  as  regards  financial  security 
(increasing  the  demand  gradually  in  order  to  meeting  the  already  existing  insurance  offer, 
developing and offering appropriate instruments for large scale damage and in case of non-
identification or non-existence of a solvent liable operator). Finally, public participation and 
access  to  justice,  which  were  mostly  absent  in  pre-existing  national  legislation  contributed 
under the ELD to better addressing environmental damage and its remediation. 

If  strictly  enforced  and  systematically  applied  without  making  too  much  use  of  exceptions 
and defences, the ELD thus has the potential to bring up the level of environmental protection 
from  the  past  (national  pre-ELD  laws)  characterised  largely  by  fault-based  liability, 
incomplete  consideration  of  the  polluter-pays  principle  and  lack  of  biodiversity  damage 
remediation,  to  a  more  coherent  and  efficient  strict  liability  system  in  the  whole  EU.  The 
varying  level  of  quality  in  the  application  of  ELD  remediation  as  regards  for  instance  the 
inclusion  of  compensatory  remediation  for  interim  losses,  could  be  further  improved  to  a 
common high level through more exchange of information among stakeholders and EU-wide 
transparent ELD data. 

158 Protocol of Civil Liability and Compensation for Damage Caused by the Transboundary Effects of Industrial Accidents on Transboundary 
Waters. 

59 

 
 
                                                            
 
7.  CONCLUSIONS 

The  ELD  gradually  developed  in  the  reporting  period  between  30  April  2007  and  30  April 
2013 with around 1,245 instances of environmental damage on which it was applied and an 
even higher number of potential cases in the EU (in particular indicated by Italy). Most of the 
recent stakeholder reports, surveys or position papers on the ELD appreciated the Directive 
and the implementation besides various critical remarks. As one example for this feedback, 
an  EU  NGO  summed  it  up  as  follows:  "We  are  strongly  convinced  that  the  Environmental 
Liability Directive is a valuable instrument in order to stop environmental degradation and 
improve the protection of Europe’s natural resources - this by creating clear responsibilities 
for  polluters  and  establishing  a  very  strict  remediation  system  which  aims  at  very 
comprehensive  environmental  restoration."159  Hence,  the  ELD  delivered  a  predictable 
legislative  framework  across  the  whole  EU  for  the  prevention  and  remediation  of 
environmental damage. 

However,  the  difficulties  to  acquire  substantial  and  representative  data  in  relation  to  the 
evaluation  criteria  hampered  the  establishment of  an  evaluation  up  to  the  desired  standards 
under  the  new  REFIT  programme  of  the  Commission.  The  conclusions  reflect  that  partial 
lack of data. Nevertheless, the evaluation showed that 

• 

the  Directive's  objective  remains  relevant  but  its  ability  in  in  achieving  a  high  level  of 
environmental protection and in preventing and remedying environmental damage in the 
EU  is  hampered  by  significant  lack  of  clarity  and  uniform  application  of  key  concepts, 
and underdeveloped capacities and expertise, 

•  many  Member  States  have  made  progress  towards  effectively  achieving  the  two  main 
objectives  of  preventing  and  remedying  environmental  damage  within  the  reporting 
period,  but  studies  have  concluded  also  a  'patchwork  of  environmental  remediation', 
expressed also in a number of cases with a few Member States with high record of cases 
and eleven Member States having notified no ELD instance, 
the  latter  may  result  from  insufficient  enforcement  of  the  ELD  (in  some  cases  due  to 
preference for other pre-existing legislation), 
the  amount  of  better  precaution  is  said  by  many  stakeholders  to  have  risen  due  to  the 
ELD, but it is difficult to estimate, 

• 

• 

•  currently there is not sufficient evidence  which would justify the amendment of the scope 
of  strict  liability  (no  proof  of  fault)  and  of  the  scope  of  environmental  damage 
(biodiversity, water, land). Further evidence gathering and monitoring would be needed to 
also  look  at  the  wider  liability  regimes  in  place  and  address  particular  aspects  (e.g.  the 
transport of dangerous substances in pipelines, cf. Coussouls de Crau case), 
the  effectiveness  is  hampered  by  diverging  interpretations  of  the  significance  threshold, 
affecting in particular the trigger for preventive action, and hence a lower number of ELD 
cases, 

• 

•  other  reasons  for  lower  application  consist  in the  fact  that  some  Member  States  use  the 
flexibility under the framework character of the Directive to make more use of exceptions 
and limiting options and define broad concepts and definitions in a restricted way, such as 
in particular the 'significance threshold' and rely more on their national legislation, 

•  opportunities for better application  of the ELD are provided through   

o  publicly accessible registers of ELD cases, 

159 Justice and Environment, Position paper on the Environmental Liability Directive, June 2015. 

60 

 
 
                                                            
o  access of interested parties to submit comments and to cooperate with competent 

authorities, 

o  a  secondary  obligation  of  competent  authorities  to  carry  out  preventive  and 

remedial action if operators fail to do so, 
the repeal of overlapping national legislation, and  
the knowledge of the ELD by operators. 

o 
o 

•  precise data on administrative costs for public authorities are limited and quite divergent, 
and  for  business  not  available  at  all,  which  indicates  the  need  for  further  research  in 
future, 

•  some  data  on  remediation  costs  are  available  showing  that  the  average  costs  of 
remediation turn around €42,500 if the few large  scale accidents are not considered in the 
calculation, but average costs per Member State vary as well between €3,559 (Hungary) 
and €1,070,341 (Sweden) (again by ex cluding five bigger cases), 

•  preventive and remedial costs were effectively internalised in line with the polluter-pays 
principle  where  the  ELD  rules  were  applied  and  the  (solvent/sufficiently  insured)  liable 
operator could be identified, 

• 

•  sufficient insurance cover is available in most markets, including for complementary and 
compensatory remediation, but demand is in general low due to lack in reported incidents, 
sub-optimal enforcement and slower developments in emerging markets, 
the case of harmonised mandatory financial security at EU level is still weak in the face 
of the abovementioned recent upward trend in insurance cover for ELD liabilities in the 
EU;  it  is  useful  to  consider  further  some  options  to  improve  financial  security  such  as 
better  examination  of  the  financial  viability  of  operators  by  competent  authorities, 
promotion  of  better  risk  analysis  of  operators,  and  a  gradual  approach  in  introducing 
financial  security  starting  by  the  most  riskiest  activities,  and  taking  into  account  the 
advantages of tailor-made solutions at national level, 

•  major  accidents  and  else  large  scale  losses  as  well  as  insolvency/bankruptcy  remain  a 
problem for financial security in the EU, which could be targeted by appropriate solutions 
including  well-designed  and  tailor-made  industry  funds  or  risk-sharing  facilities  but 
without  jeopardizing  the  polluter-pays  principle  (i.e.  ensuring  that  'good'  players  do  not 
foot  the  bill  for  'bad'  players),  and  without  hindering  the  development  of  insurance 
markets, 
the  two  optional  defences  in  the  ELD  (permit  defence,  state-of-the-art  defence)  may 
undermine the strong incentive of strict liability to invest in risk minimising technologies 
and  to  undertake  additional  precautionary  efforts,  but  sufficient  empirical  evidence  was 
not available and main stakeholders expressed a clear opinion in favour to keeping them, 
the  ELD  is,  in  principle,  coherent  with  the  other  parts  of  EU  environmental  law  (EIA, 
IED etc.), but  

• 

• 

•  some  particular  coherence  issues  need  to  be  further  considered,  preferably  by  way  of 
interpretation and guidance as regards the relationship between the ELD and the Habitats 
Directive, concerning in particular 

o 

o 

the  relationship  between  the  significance  threshold  in  the  ELD  and  habitat 
deterioration and significant species disturbance pursuant to Article 6(2) Habitats 
Directive; and 
the geographical reference of 'favourable conservation status' according to Article 
2(4) ELD with the similar concept in the Habitats Directive, taking account of the 
need for a, site-related reference 

• 

the  exemptions  to  the  ELD  in  favour  of  some  international  conventions  in  the  field  of 
maritime transport and nuclear activities should be maintained for the time being because 

61 

 
 
IMO Conventions have, despite lower environmental remediation standards than the ELD 
a range of other advantages (no significance threshold, mandatory financial security, right 
of direct recourse against the insurer, three tier financial security for oil pollution damage, 
world-wide scope) and because nuclear liability should remain under the Euratom Treaty 
rather than under the TFEU to avoid controversial consequences, 
there  were  no  incidents  of  environmental  damage  caused  by  genetically  modified 
organisms in the EU and that the Directive fully implements the Nagoya – Kuala Lumpur 
Supplementary Protocol on Liability and Redress to the Cartagena Protocol on Biosafety, 
there is no need to extend Annex IV or V of the ELD (exceptions to the scope of the ELD 
in  the  aforementioned  fields  of  (mostly)  maritime  transport  and  nuclear  activities  after 
having assessed all potential candidates, 
the ELD works complementary to main pieces of EU environmental legislation to which 
it  is  directly  or  indirectly  linked,  in  particular  to  the  Habitats  and  Birds  Directive,  the 
Water  Framework  Directive  and  the  Marine  Strategy  Framework  Directive  and  the 
Offshore  Safety  Directive  (besides  the  Industrial  Emissions  Directive,  CCS  Directive, 
Waste Framework Directive, Landfill Directive etc.), 
the  specific  EU-added  value  of  the  ELD  is  linked  with  transboundary  damage 
(transboundary water damage, biodiversity damage), and that 
the situation regarding environmental protection without the existence of the ELD would 
be  worse  with  particular  regard  to  prevention  of  damage,  remediation  of  damage  to  the 
baseline  condition,  biodiversity  damage, 
(primary, 
complementary and compensatory) and public participation and access to justice. 

remediation  standards 

the 

• 

• 

• 

• 

• 

Despite the added value and the positive developments, there are clear needs for actions to 
address  the  observed  implementation  deficits  and  major  discrepancies  in  order  to  make  the 
Directive  more  effective  and  efficient  and  to  enhance  the  coherence  with  other  EU 
environmental legislation. 

The main challenges are: 

1.  Low availability of data on ELD cases160, including in particular data on the application 
of  complementary  and  compensatory  remediation,  acting  in  addition  to  the  fact  that 
eleven  Member  States  notified  not  a  single  ELD  incident  and  some  Member  States 
apparently choose not to place any incidents under the ELD, 

2.  Low awareness of the Directive by main stakeholders and practitioners, 
3.  Ambiguities  around  key  concepts  and  definitions,  such  as  the  'significance  threshold', 

'preventive action', 'favourable conservation status', 

4.  Exceptions and defences to the scope of environmental damage and strict liability, which 

may reduce effectiveness and efficiency accordingly, 

5.  Insolvency of operators in cases of costly environmental remediation. 

As  many  stakeholders  and  government  experts  have  emphasized,  a  stable  legislative 
framework  for  the  Directive's  further  implementation  seems  to  be  at  present  indispensable. 
Based on the findings of this evaluation, the Commission would suggest the actions listed in 
the recommendations part of the report COM(2016) 204. 

160 Public databases of ELD cases enhance the awareness about possibilities to notify damage instances to competent authorities, create 
trust into the liability regime and a greater sense of responsibility of competent authorities, allow for a better database to analyse risks 
and calculate insurance and allow easy comparison of implementation of the ELD. 

62 

 
 
                                                            
ANNEXES 

ANNEX 1: PROCEDURAL INFORMATION 

The evaluation was carried out under the lead of DG Environment and started in 2012. It was 
planned to be completed after having assessed the external evaluation studies and the national 
ELD reports of the Member States in late 2013, beginning of 2014. Member States were due 
to  report  by  30  April  2013  but  the  last  reports  were  submitted  in  December  2013.  The 
external studies were finished in February and approved in March 2014. Due to the change in 
the Commission in 2014 and the necessary adaptations to the further developments in REFIT 
evaluations,  the  evaluation  involving  twelve  Commission  services161  participated  in  the 
steering group meeting two times in 2013 and 2015. 

The main evidence used in the evaluation consists in information and data provided by the 27 
Member States' reports on the application of the Environmental Liability Directive and in the 
three  evaluation  studies  on  the  effectiveness  of  the  Directive,  on  biodiversity  damage  in 
particular  and  on  the  national  legal  frameworks.  These  three  studies  of  2013/2014  plus  the 
two  previous  studies  on  implementation  and  on  the  feasibility  of  a  fund  of  2012/2013  are 
summarised  in  an  annex  to  this  evaluation.  Beyond  the  national  reports  and  the  studies, 
evidence  has  been  gathered  also  in  several  meetings  with  ELD  government  experts  and 
conferences with ELD stakeholders. Finally, some stakeholders have provided extra written 
input on specific themes in view of this evaluation. 

An  agreed  interpretation  guidance  paper  was  prepared  between  the  Commission  and  the 
government  experts  to  ensure  comparability  and  completeness  of  the  information.  The 
submitted  information  however  varied  to  a  great  degree.  All  relevant  studies  included 
stakeholder and experts' participation, several workshops formed an integral part of them and 
the quality of the outcome was assessed before approving them. 

However, the lack of robust information on certain key data, such as on administrative costs, 
on  the  use  of  national  legislation  on  environmental  damage  incidents,  on  the  application  of 
complementary  and  compensatory  remediation  compared  to  primary  remediation,  etc. 
impeded the achievement of the standard aspired for REFIT evaluations.   

161 DG AGRI, DG CLIMA, DG ECHO, DG ENER, DG ENVI, DG FISMA, DG GROW, DG MARE, DG MOVE, DG SANTE, SG, LS. 

63 

 
 
 
 
 
                                                            
ANNEX 2: ELD STUDIES 

1. Financial security studies of 2008 and 2009 

In  view  of  the  Commission  report  2010,  the  Commission  had  launched  studies  in  2007  and 
2008  to  investigate  the  principal  questions  regarding  the  effectiveness  of  the  Directive  in 
terms of remediation of environmental damage and available financial security at reasonable 
costs and on the conditions of insurance and other types for financial security for the activities 
falling under the scope of strict liability, listed in Annex III of the ELD. 

The  study  of  2008  described  the  situation  in  the  EU  concerning  the  implementation  of  the 
Directive at that time and found with regard to the insurance and re-insurance market in the 
EU that insurance is the most popular instrument to cover environmental liability, followed 
by  bank  guarantees  and  market  based  instruments  and  that  insurance  pools  are  present  in 
some  Member  States.  The  preferred  option  to  cover  liabilities  under  the  ELD  would  be 
provided  by  Environmental  Impairment  Liability  policies  or  new  specialised  stand-alone 
products, while extensions to General Third Party Liability policies would follow path (this 
situation  might  have  slightly  changed).  At  that  time  products  offering  full  cover  of  ELD 
liabilities  were  generally  not  available  (changed  in  the  meantime).  Unlike  for  sudden  and 
accidental  pollution,  cover  for  gradual  pollution  was  only  offered  by  few  and  cover  for 
compensatory remediation and even biodiversity damage was at the time hard to get. Given 
the  limitations  of  the  insurance  market  of  the  time,  alternative  risk  transfer  arrangements, 
together  with  self-insurance,  formed  an  interesting  alternative.  Reimbursement  ceilings 
ranged from less than €1 million to a maximu m of €50 million, depending on covered risks 
and premiums. 

Operators  had  according  to  the  study  not  yet  adapted  their  insurance  policies  to  cover  the 
extended  liability  induced  by  the  ELD  with  many  not  aware  of  the  existence  of  the  ELD 
(indicating  a  need  to  communicate  the  ELD  more).  Those  companies  which  were  aware  of 
their  environmental  liabilities  tended  to  cover  their  risks  through  a  mix  of  environmental 
insurance.  Main  limitations  resulted  from  limited  experience,  a  gap  of  data  and  risk 
assessment  models  and  the  fact  that  brokers  were  not  always  aware  of  the  ELD.  Also  the 
experience in the application of market based instruments was very limited. The results of the 
research on the (small) experience with mandatory financial security under the ELD were still 
limited and rather mixed. 

The study recommended to further update and analyse the progress in the implementation of 
the Directive, to disseminate information on insurance products, to facilitate and promote the 
dialogue  between  different  stakeholders,  to  compile  recent  events  under  the  ELD  and  to 
develop  a  case  database  and  to  work  further  on  guidance  how  to  asses  risks  and  estimate 
environmental  damages.  Some  of  the  findings  and  of  the  recommendations  are  nowadays 
outdated, some of them may appear still relevant. 

The  study  of  2009  updated  the  developments  in  implementing  the  ELD  and  regarding 
financial security. It described the latter developments as generally positive ("a growing and 
competitive market that provides good cover for most liabilities under the ELD") and found 
that the lacking interest from operators is a bigger obstacle to further developments than high 
premiums  or  the  uninsurability  of  certain  liabilities.  The  study  brought  in  addition  to  the 
results  of  the  previous  study  a  more  detailed  analysis  with  respect  to  alternative  financial 
security instruments, and with regard to the issues of gradual approach, ceiling for  financial 
guarantees  and  the  exclusion  of  low-risk  activities.  The  study  looked  also  into  the 

64 

 
 
 
developments in the US for comparison and it delivered an ELD case database on the basis of 
ELD case templates. 

The study concluded that further research into the options of a gradual approach, ceilings for 
financial  security  and  the  exclusion  of  low-risk  activities  and  their  impact  on  ELD 
implementation might be needed. The study suggested increasing the communication among 
stakeholders and addressing the lacking awareness of the ELD with competent authorities and 
operators.  They  recommended  in  addition  to  further  populating  the  ELD  case  database  as 
accurate  ELD  case  information  will  play  an  important  role  in  the  efficient  ELD 
implementation.  Finally,  the  study  proposed  a  European  effort  in  the  development  of 
guidelines and models for ELD-relevant assessments and calculations in order to facilitate an 
efficient implementation of the Directive. 

2. Implementation studies 2012/2013 

Five studies in the years between 2012 and 2014, were triggered mainly by the conclusions in 
the Commission report on the ELD of 2010 with a focus to explore better implementation and 
to  tackle  the  specific  question  of  the  feasibility  of  a  fund,  as  well  as  by  the  requirement  to 
prepare  the  evaluation  of  the  Directive  in  view  of  the  Commission  report  on  the  ELD 
scheduled for 2014. 

2.1.  Study  'Implementation  challenges  and  obstacles  of  the  Environmental  Liability 
Directive (ELD)' (Implementation Study) 

The study was a direct effect of the ELD report 2010 which found limited implementation of 
the  Directive  and  recommended  measures  to  improve  it.  At  the  time  there  was  some 
uncertainty about the reasons for the late transposition and weak implementation and the need 
felt to explore it more in order to identify better the measures and instruments to be taken to 
boost the implementation. The study included a legal analysis and an empirical research. The 
legal analysis investigated how the ELD was integrated into the existing legal frameworks of 
16  Member  States162,  analysing  existing  national  legislation  and  the  national  transposing 
legislation.  The  empirical  part  was  carried  through  exchanges  and  interviews  with 
practitioners  and  experts  in  the  Member  States  to  identify  the  strengths,  obstacles  and 
challenges related to the application of the ELD in seven Member States163. 

The  objective  of  the  legal  analysis  was  to  determine  the  effectiveness  of  the  transposing 
legislation,  and  to  identify  if  possible  the  obstacles  and  challenges  to  making  it  more 
effective.  In  this  context  the  relationship  between  the  ELD  transposing  legislation  and  the 
existing legislation was capital. The issue of the determination of the 'significance threshold' 
deserved thereby increased attention. 

The  analysis  mainly  found  that  the  Directive  has  not  resulted  in  a  level  playing  field  but  a 
patchwork  of  liability  systems  for  preventing  and  remedying  environmental  damage  across 
the EU consisting for instance in differently interpreted minimum standards of the Directive 
by  Member  States  and  significant  variations  in  transposing  legislation,  not  to  speak  of 
important variations regarding implementation and enforcement. The study distinguished two 
main types of variations: procedural164 and substantive165. 

162  Belgium,  Denmark,  Finland,  France,  Germany,  Greece,  Hungary,  Ireland,  Italy,  the  Netherlands,  Poland,  Portugal,  Romania,  Spain, 
Sweden, and the United Kingdom. 

163 Denmark, France, Germany, Hungary, Poland, Spain, and the United Kingdom. 

164 Differences in administrative and judicial systems; Transposition of the ELD as stand-alone legislation or by incorporating its provisions 
into  pre-existing  legislation;  Transposition  of  the  ELD  into  the  legal  system  of  Member  States,  Degree  of  complexity  of  the  transposing 

65 

 
 
                                                            
The study emphasized the supplementary role of the ELD in setting minimum standards with 
a view to a high level of environmental protection in the EU, as required by the Treaty, and to 
harmonise  environmental  legislation  and  to  fill  gaps  in  existing  legislation.  The  latter  is  in 
particular  true  for  biodiversity  damage,  where  Member  States  largely  had  no  or  only  very 
weak  legislation  in  a  few  cases  to  prevent  and  remedy  damage  to  biodiversity  prior  to  the 
ELD. 

The  Implementation  Study  also  pointed  out  that  the  problem  is  exacerbated  by  the 
misinterpretation of the 'significance threshold' which often was used to apply the ELD only 
to  the  most  'severe'  damage  cases,  instead  of  applying  correctly  the  criteria  for  the 
determination  of  significant  damage  to  protected  species  and  natural  habitats  as  set  out  by 
Annex  I  ELD.  The  misperception  of  the  significant  biodiversity  damage  was  found  by  the 
study particularly crucial because of the key purpose of the ELD to assist in halting the loss of 
biodiversity in the ELD. 

The study further tried to find out from the legal analysis on a preliminary basis the reasons 
explaining the significant differences in the number of ELD cases between the Member States 
and concluded that some Member States had pre-existing wide ranging environmental liability 
provisions, others not; some are enforcing the legislation stricter than others; some have more 
invested  than  others  in  environmental  management  systems  of  operators;  the  differences  in 
the  designation  of  Natura  2000  sites;  the  lack  of  knowledge  of  the  ELD  among  operators 
(particularly  of  SMEs)  but  also  of  public  authorities  and  environmental  NGOs;  failure  to 
rightly draw the difference between the ELD and other legislation; and a failure of operators 
to have insurance or other form of financial security. 

The empirical part of the study focused on the practical application of the ELD in the seven 
selected  Member  States  and  was  based  on  data  collected  from  ELD  practitioners  in  these 
Member States through interviews and a workshop. The findings revealed discrepancies in the 
implementation  across  the  seven  MS  (Denmark,  France,  Germany,  Hungary,  Poland,  Spain 
and  the  UK)  with  some  MS  without  or  only  rare  cases  of  environmental  damage  where  the 
ELD  has  been  applied  and  others  with  more  cases  or  even  a  high  number  of  cases.  Before 
figuring  out  the  reasons  for  the  discrepancy,  the  more  fundamental  question  was  what  this 
number would mean, what it stands for. While it could be an indicator for an under-use of the 
Directive,  other  viewed  this  not  as  a  negative  finding  but  rather  as  an  indication  that  the 
prevention  of  environmental  damage  has  been  effective  and,  consequently,  that  the  ELD  is 
serving one of its main objectives. This may be a relevant argument, it is for the time being 
however difficult to verify or falsify it (but may be worth to work on an instrument how it can 
be verified in future). 

As  for  the  reasons  of  the  low  number  of  cases,  practitioners  mentioned  the  following:  the 
impossibility to apply the ELD due the significance threshold; due to the cases falling outside 
of the scope of Annex III; due to pre-existing legislative frameworks which were used instead 

legislation;  Designation  of  one  or  more  competent  authorities;  Number  of  jurisdictions  in  Member  States;  Publication  of  guidance  and 
other documentation; Publication of implementation and enforcement data. 

165  Optional  provisions  in  the  ELD  that  specifically  envisage  differences  in  national  ELD  regimes;  Provisions  in  the  ELD  that  specifically 
provide for the application of existing national law in Member States; Specific authorisation in the ELD for Member States to adopt more 
stringent provisions; Adoption of less stringent provisions; The application of national law concepts including the standard of liability, the 
level of causation, and secondary liability; Imprecise language in the ELD; Adaptation of the language transposing the ELD; Provisions in 
national legislation to rectify conflicts in the ELD; Provisions in national legislation to fill gaps in the ELD; Extension to include a civil liability 
system. 

66 

 
 
                                                                                                                                                                                         
of  the  ELD;  due  to  practical  reasons  such  as  lacking  experience,  lacking  expertise,  lacking 
proactive implementation, robustness of traditional legislation. 

The  empirical  investigation  had  as  a  major  objective  to  find  out  the  main  strengths  and 
weaknesses  of  the  ELD.  As  main  strengths  of  the  ELD,  practitioners  mentioned  mostly  the 
effectiveness  of  the  ELD  and  the  procedures  established  under  it;  the  prevention  of 
environmental  damage;  the  remediation  of  environmental  damage;  the  involvement  of 
stakeholders.  As  challenges  or  obstacles  to  good  implementation  was  mentioned  the 
complexity  of  the  national  transposing  legislation;  the  difficulty  to  demonstrate  that  the 
significance threshold was met; the common misperception regarding the 'severity threshold' 
for  biodiversity  damage;  the  perceived  inappropriate  scope  of  Annex  III  (too  broad,  too 
narrow, inappropriate); the inclusion  of financial obligations for operators;  lack of expertise 
and  knowledge  of  the  ELD;  lack  of  data  to  determine  environmental  damage  or  imminent 
threat thereof; lacking resources in some Member States; lacking tools (guidance documents); 
level of co-operation between stakeholders; the co-existence of different ELD regimes in the 
same MS; the level of adequacy of the pre-existing legal framework; discrepancies between 
the  ELD  and  pre-existing  legal  frameworks;  possible  overlaps  between  the  ELD  and  pre-
existing legislative frameworks; the lack of co-ordination between several related directives; 
and the economic and financial environment (current economic climate). 

The  Implementation  Study  recommended  identifying  best  practice  through  the  following 
measures: organisation of workshops and conferences to increase awareness of stakeholders; 
supporting competent authorities through a dedicated team providing external support or the 
establishment  of  networks  between  stakeholders;  development  of  various  tools  (notification 
and registration of ELD cases, promotion of purchase of insurance policies by operators). 

The  study  recommended  fixing  the  following  issues  in  order  to  foster  greater  ELD 
implementation:  widely  varying  liability  systems;  clashes  between  self-executing  provisions 
and determination of environmental damage; difficulties in enforcement; relationship between 
the ELD and the IPPC-Directive/IED; implementation of the correct threshold for biodiversity 
damage; relationship between the ELD and the Birds and Habitats Directives. 

Finally,  the  study  identified  for  each  category  of  challenges  and  obstacles  potential  actions 
which  could  strengthen  the  implementation  and  enforcement  of  the  ELD:  drafting  technical 
guidance to support competent authorities in determining significant environmental damage; 
developing  actions  to  improve  expertise  and  knowledge  of  all  stakeholders;  promoting  the 
development of databases for the collection of data on the quality of environmental sectors; 
improving  governance  through  the  establishment  of  coordination  bodies  and  providing 
resources  for  investigation  assessments  and  specific  tools  to  support  the  ELD;  ensuring 
greater coordination between the ELD and other related directives. 

2.2. 'Study to explore the feasibility of creating a fund  to cover environmental liability 
and losses occurring from industrial accidents' (Fund Study) 

The immediate reason for this study was the Hungarian accident in Kolontár in October 2010, 
but it is a fact that major accidents involving large scale losses appear from time to time and 
that  the  financial  resources  of  the  operator  are  often  insufficient  to  cover  the  environmental 
(and other) damages. The study was based on an Hungarian proposal for an industry fund or 
risk  sharing  facility  which  integrated  three  main  functions:  pre-financing  tool  to  give 
immediate access to funding and relief to communities; second tier of financial security after 
the  private  insurance  has  been  exhausted;  support  to  companies  (in  particular  to  SMEs)  to 
invest in safety and prevention through unspent resources. The Hungarian proposal suggested 
that the fund be triggered only above a ceiling of €100 million. 

67 

 
 
Relevant  stakeholders  were  consulted  and  a  workshop  was  held  to  determine  if  and  how 
operators  and  the  financial  security  sector  could  be  engaged  in  the  development  and  what 
could be the major features of such an instrument. There was however quite a broad negative 
feedback from stakeholders which mainly raised concerns that the fund would not include a 
risk  assessment  and  pointed  to  the  potential  to  hinder  the  development  of  an  otherwise 
increasing  environmental  insurance  market,  as  well  as  to  the  implications  of  the  interaction 
between  existing  national  funds  and  a  new  EU  fund.  Even  more  important  concerns  were 
raised  with  respect  to  the  potential  of  the  fund  to  contradict  the  polluter-pays  principle 
(operators who did not engage in any wrongdoing would have to pay part of the costs of the 
more careless operators) and the related moral hazard connected with the creation of the EU 
fund (due to their knowledge that their financial liability is capped). In addition, the operation 
of  a  fund  in  Member  States  with  widely  differing  economies,  industries,  legal  liability 
regimes,  history  of  environmental  claims  and  approaches  to  such  risks  raised  substantial 
concerns. 

But  also  due  to  some  practical  concerns  regarding  the  purpose  and  design  elements  of  the 
fund or risk-sharing facility, acceptance of stakeholders was very limited if not negative. First, 
it  would  be  necessary  to  clarify  better  the  purpose  of  the  fund  (to  compensate  victims  of  a 
major  accident  or  to  remediate  environmental  damage,  or  to  provide  emergency  funding  as 
pre-financing tool or to use it for clean-up of orphan sites etc.). Further, it became clear that 
questions  relating  to  the  size,  threshold,  tiers  of  compensation  and  sectors  to  be  covered 
needed  further  investigation  as  well  as  issues  relating  to  the  calculation  of  the  fund,  the 
interaction  with  other  financial  security  instruments,  the  method  of  collection  and 
management of the fund, the scope and sectors of operators. 

While several positive aspects of such an instrument are undeniable (e.g. to cover immediate 
response  measures  and  to  reduce  the  consequences  and  thus  total  cost  of  remediation 
measures),  the  overwhelming  response  by  stakeholders  was  rather  negative  due  to  the 
potential for moral hazard, conflict with the polluter-pays principle, competition with similar 
products or schemes and practical reasons such a the feasibility of establishing such a facility 
at EU level with such an amount. Further, the study concluded that several points would need 
to  be  considered  in  more  detail,  such  as  the  links  of  the  fund  with  EU  law  (e.g.  Solidarity 
Fund,  Seveso  III  Directive,  Mining  Waste  Directive,  IED  and  other  directives),  similar 
national  funds  (e.g.  in  Finland)  or  pooling  mechanisms  (in  Spain,  France  and  Italy)  and 
various initiatives for mandatory financial security requirements at MS level. In addition, the 
design, management and implementation would need to be given careful consideration. 

3. Evaluation studies 2013/2014 

3.1. 'Study on analysis of integrating the ELD into 11 national legal frameworks' (Legal 
Analysis Study) 

This study built on the previous Implementation Study by complementing the detailed legal 
analysis  for  the  remaining  eleven  Member  States  and  thus  completing  it  for  27  Member 
States. The study however comprised also an extensive general part on the existing national 
environmental  liability  legislation,  the  legislation  transposing  the  ELD  into  the  national 
legislation  and  a  comparison  of  the  relative  stringencies  in  existing  and  transposing 
legislation. All Member State summaries were reviewed for accuracy by legal experts of the 
27 Member States participating in the study. 

The  Legal  Analysis  Study  confirmed  once  more  that  the  transposition  of  the  ELD  into 
national law of the Member States did not result in a level playing field, but into a patchwork 
of  liability  systems  for  preventing  and  remedying  environmental  damage  across  the  EU. 

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Variations  resulted  mainly  from  the  transposition  of  the  ELD  into  a  wide  range  of  liability 
legislation due to the options offered by the ELD itself and due to its 'framework' character, 
just setting minimum standards, as well as from different interpretations of the standards and 
requirements  of  the  ELD,  thus  resulting  in  different  levels  of  application  ranging  from  zero 
cases to more than 500 ELD cases in one Member State. 

As main factors for the significant variance in the number of cases between Member States, 
the  study  revealed  the  following:  register  of  ELD  incidents  and  notification  system; 
publication  of  data  of  ELD  incidents  by  governmental  authorities;  access  for  interested 
parties,  including  environmental  NGOs  to  submit  comments/observations  on  potential  ELD 
incidents; subsidiary obligation for competent authorities  to carry out preventive or remedial 
action  if  the  liable  operator  cannot  be  identified  or  fails  to  prevent  or  remedy  the  damage; 
repeal of pre-existing national legislation which would have overlapped and/or hindered the 
application of the ELD transposing legislation; different levels of knowledge of the ELD by 
operators  (the  level  of  awareness  is  inevitably  lower  for  SMEs,  except  perhaps  where 
mandatory  financial  security  had  been  established);  and  the  state  of  development  of 
environmental  law  in  individual  Member  States  (competent  authorities  in  MS  with  well-
developed systems tend more to enforce existing environmental legislation in lieu of the ELD 
transposing legislation than in other MS). 

The  Legal  Analysis  Study  summarised  findings  with  respect  to  the  harmonisation  or 
fragmentation  (MS  with  an  Environmental  Code  tend  to  result  in  the  most  harmonised 
environmental  legislation,  MS  with  fragmented  environmental  legislation  have  the  greatest 
potential  for  overlaps  between  existing  and  transposing  legislation),  to  the  holistic  or 
environmental  media-specific  approach  (the  ELD  is  rather  environmental  media-specific  in 
contrast  to  many  holistic  pre-existing  national  laws),  to  biodiversity  damage  (pre-existing 
laws  did  not  provide  for  complementary  and  compensatory  environmental  remediation  of 
damage, and virtually all imposed primary remediation only when there has been an unlawful 
act),  to  compensatory  damage  (pre-existing  legislation  in  some  MS  provided  for  monetary 
compensation  in  contrast  to  the  ELD)  to  liable  persons  (strict  liability  under  the  ELD  for 
activities listed in Annex III, while many MS imposed strict liability on all operators), to the 
standard  of  liability  (strict  standard  in  most  MS,  double  standard  –  strict  and  fault-based  – 
under the ELD). 

Other  differences  between  the  transposing  and  the  existing  national  legislation  concern  the 
scope  of  liability,  permit  and  state-of-the-art  defences  (very  rare  in  existing  environmental 
legislation),  other  defences  and  exceptions  (also  rare  in  national  legislation,  only  for  de 
minimimis  contamination),  limitation  of  liability  to  specified  operations  or  to  professional 
activities (as well rare in national legislation), limitation period (extremely rare for prevention 
and remediation of environmental damage, not so for bodily injury and property damage). 

Further, the study summarised on a complete set of assessed national legal frameworks for 27 
Member States the procedural and substantive variations in the transposition of the ELD: 

•  Differences  in  administrative  and  judicial  systems:  It  affects  in  particular  the  legal 

mechanisms for challenging orders to prevent and remedy environmental damage. 

•  Transposition  of  the  ELD  into  national  law:  Where  Member  States  had  Environmental 
Codes,  this  facilitated  the  integration  of  the  ELD  into  the  national  law;  Member  States 
with  framework  environmental  legislation  made  partly  detailed  revisions,  partly 
subsidiary  legislation  to  the  framework  legislation;  Member  States  with  separate 
legislation for land contamination, water management or nature protection used individual 
different  approaches  of  transposition,  ranging  from  enactment  of  primary  or  secondary 

69 

 
 
legislation, stand-alone instruments to amendments of existing legislation (in a few cases 
of many legal acts). 

•  Degrees of complexity of transposing legislation: Some Member States enacted complex 
and lengthy legislation to transpose the ELD, others made largely a 'copy-out' of the ELD 
or enacted very short transposing legislation. 

•  Designation  of  competent  authorities:  Some  Member  States  designated  only  one 
competent authority at national level, others a few competent authorities, others between 
10 and 20 and still others designated a hundred or several hundred competent authorities, 
which  is  often  the  consequence  of  a  federal  system  or  of  devolved  administration.  In 
particular where there are more competent authorities, such are often divided according to 
their competencies for nature, water or land. 

•  Publications of guidance and other documentation: Some Member States have published 
guidance and other Member States have included some content partly covered in guidance 
in their transposing legislation itself (e.g. details concerning prevention and remediation of 
environmental  damage,  including  quantification  of  such  damage),  such  information  is 
absent in other Member States. 

•  Some Member States publish actively data on the implementation and enforcement of the 

transposing legislation, others not. 

•  Optional  provisions  in  the  ELD:  The  optional  provisions  in  the  ELD  (for  instance 
regarding  the  two  optional  defences  and  the  extension  of  the  scope  of  biodiversity 
damage) have resulted in variations in the transposing legislation. 

•  Provisions  in  the  ELD  that  provide  for  the  application  of  national  law:  Where  the  ELD 
provides that MS may apply existing national law, this leads as well to differences as for 
example  as  regards  the  definition  of  operator,  multi-party  liability  (joint  and  several  vs. 
shared liability), the scope of enabled NGOs. 

•  Entitlement  for  Member  States  to  maintain  or  adopt  more  stringent  measures:  The  legal 
basis of the ELD entitles MS according to Article 193 TFEU, as reiterated in Article 16 
ELD to adopt or maintain more stringent provisions which again is a source of substantial 
differences  in  liability  systems,  with  narrower  or  broader  regimes  applying  to 
environmental  damage  (e.g.  adding  of  persons  with  secondary  responsibility  in  some 
Member States, wider definition of operators, more stringent temporal scope etc.). 

•  Application of national law concepts: The different national law concepts, for example in 
relation to the level of proof needed for operators to be liable, the degree of causation that 
must  be  shown,  or  the  inclusion  of  additional  persons  who  are  secondary  liable,  add 
further to the variation in the legislation transposing the Directive. 

• 

Imprecise  language  in  the  ELD:  The  study  lists  examples  of  imprecise  language  in  the 
Directive with an effect on implementation and enforcement, such as around the concept 
of defences (defences to costs vs. defences to liability, scope of water damage regarding 
the use of 'waters' vs. 'water bodies', the duty vs. the entitlement of competent authorities 
to require operators to carry out preventive and remedial measures etc.). 

•  Adaptation of the language transposing the ELD: The study found among other things out 
that  several  crucial  terms  of  the  Directive  are  not  consistently  used  in  the  different 
language  versions  of  the  Directive  as  such.  This  applies  for  instance  to  the  term 
'significant'  which  is  used  in  all  three  definitions  of  environmental  damage  and  in  other 
instances in the same manner in the English version of the ELD, but often is used in quite 

70 

 
 
different ways in several other language versions, and even consistently different in some 
language versions (for example 'grave' in the French version of Directive 2004/35/EC). 

•  Provisions  in  national  legislation  to  rectify  conflicts  in  the  ELD:  The  study  further 
indicates that the self-executing provisions of the Directive, i.e. the duty of an operator to 
discern  environmental  damage  he  has  caused  and  to  take  the  necessary  preventive  and 
remedial action, may be difficult to implement, in particular with regard imminent threat 
of damage. A few MS have transposed the ELD to facilitate the enforcement of the ELD, 
others have not done so. 

•  Provisions  in  national  legislation  to  fill  gaps  in  the  ELD:  Some  MS  have  filled  gaps  by 
including  specific  provisions  in  the  transposing  legislation,  others  have  not.  This  may 
cover penalties for breaching the transposing legislation, the right of access to third-party 
land to remedy environmental damage, and the creation of registers or other databases of 
ELD incidents. 

The detailed legal analysis of the existing national legal frameworks and the integration and 
main features of the transposing legislation in the 27 Member States of the EU who were due 
to the reporting obligation under Article 18 ELD (all current MS except Croatia), provides a 
wealth  of  useful  information  which  will  for  some  time  remain  a  very  valuable  source  for 
many relevant ELD related questions needing further research. The country-specific chapters 
follow the same systematic structure consisting of the following titles: 

1.  Existing national environmental legislation 

2.  Existing regimes for preventing and remediating environmental damage 

3.  Integration of the ELD into existing national legislation 

4.  Effective date of national legislation 

5.  Competent authority 

6.  Operators and other liable persons 

7.  Annex III legislation 

8.  Standard of liability for non-Annex III activities 

9.  Exceptions 

10. Joint and several or proportionality liability 

11. Limitation period 

12. Defences 

13. Scope of environmental damage 

14. Thresholds 

15. Standard of remediation 

16.  Format of determination of environmental damage 

17. Powers and duties of competent authority 

18. Duties of responsible operators 

19. Access to third-party land to comply with the ELD 

20. Interested parties 

21. Public access to information regarding environmental damage and related measures 

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22. Charges on land/financial security after environmental damage 

23. Offences and sanctions 

24. Registers of data bases of incidents 

25. Cross border damage in another MS 

26. Financial security 

27. Establishment of a fund 

28. Reports 

29. Information to be made public 

30. Provisions concerning genetically modified organisms 

31. Key features and differences in legislation transposing the ELD and existing legislation 

On  a  more  principal  level,  the  most  important  conclusions  to  be  drawn  from  the 
comprehensive  Legal  Analysis  Study  appears  to  be  the  one  on  the  recurrent  general  factors 
contributing to or being responsible for good implementation of the ELD (as mentioned at the 
beginning of this summary), which are: publicly accessible register of ELD incidents; access 
for interested parties  (NGOs)  to  submit observations on potential ELD  incidents; subsidiary 
obligation  for  competent  authorities    to  carry  out  preventive  or  remedial  action  if  the  liable 
operator  cannot  be  identified  or  fails  to  do  so;  repeal  of  overlapping  or  contradictory  pre-
existing national legislation; insufficient knowledge of the ELD by operators. 

3.2.  Study  on  'Experience  gained  in  the  application  of  ELD  biodiversity  damage' 
(Biodiversity Damage Study) 

The Biodiversity Damage Study has been commissioned in view of the ELD evaluation and 
report.  The  purpose  was  to  contribute  to  the  assessment  necessary  on  the  basis  of  Article 
18(3)(c) ELD ("The report, referred to in paragraph 2, shall include a review of:… (c) the 
application of this Directive in relation to protected species and natural habitats") and on the 
basis of the Commission ELD report 2010 ("With regard to the general review of the ELD 
foreseen  for  2013/2014,  the  evaluation  on  …  the  uneven  extension  of  the  scope  to  cover 
damage to species and natural habitats protected under domestic legislation"). 

The  objective  of  the  study  was  to  examine  the  implementation  of  the  ELD  in  relation  to 
protected  species  and  natural  habitats.  The  study  included  an  assessment  of  the  practical 
implementation and an analysis of key legal concepts of the ELD in relation to the Habitats 
Directive, as the latter directive pursues the same objective as the ELD in halting biodiversity 
loss in the European Union. The study described implementation challenges on the basis of 
an analysis of ten Member States' environmental liability regimes166. The review was based 
on  standardised  templates  and  was  complemented  by  targeted  interviews.  The  study  in  its 
second  part  was  dedicated  to  the  development  of  a  European  Biodiversity  Register  for  the 
ELD,  providing  an  overview  of  the  relevant  information  sources  at  EU-level  as  well  as  on 
national level for all Member States, thus helping to establish the necessary information input 
in  particular  for  risk  analysis,  the  establishment  of  the  baseline  condition  for  biodiversity 
damage and an environmental damage assessment. This second part was however not directly 
linked with the evaluation purpose. 

166 Bulgaria, Denmark, Estonia, France, Germany, Italy, Poland, Slovenia, Spain and the United Kingdom. 

72 

 
 
                                                            
The study identified the following main issues deserving a closer look in the evaluation and 
requiring possible measures to improve the implementation: Different Member States apply a 
different  interpretation  of  'significant  biodiversity  damage',  some  understand  the  concept 
rather as severe damage (if not as catastrophic events), while others consider significant any 
biodiversity damage beyond negative variations in accordance with Annex I of the ELD. The 
different  interpretation  of  'significant'  is  expressed  in  quite  different  numbers  of  notified 
biodiversity damage incidents under the ELD and has, according to the study, in addition led 
to a lack of harmonisation or coordination with the Habitats Directive, in particular with its 
Article  6(2).  The  shortcoming  coordination  between  both  directives  would  be  further 
aggravated by a widely lacking procedural coordination in the application of both directives, 
which  are  otherwise  meant  to  complement  each  other.  In  order  to  achieve  the  common 
objective  of  conservation  of  the  protected  European  nature,  clarification  of  'significant' 
biodiversity  damage  pursuant  to  Article  2(1)(a)  ELD  and  better  alignment  in  the 
interpretation  and  application  between  Article  2(1)(a),  (3)  and  (4)  of  the  ELD  with  Article 
6(2) Habitats Directive would be necessary. 

Another potential major problem revealed by the Biodiversity Damage Study is the apparent 
uncertainty  in  some  Member  States  about  the  correct  interpretation  of  the  concept  of 
preventive  measures  in  conjunction  with  the  significance  threshold  requirement.  The  main 
question  is  whether  measures  taken  to  prevent  damage  to  become  significant  damage  are 
triggering the ELD application or not. In this context also the difference between preventive 
action  and  emergency  remedial  action  would  require  further  clarification.  From  the 
examination of the implementation of the ELD biodiversity damage resulted also the finding 
of  the  study  that  the  concept  of  favourable  conservation  status  (of  species  and  natural 
habitats) is posing potential problems where it is related to the assessment at the level of the 
European  territory  or  the  territory  of  a  Member  State  or  the  natural  range  of  a  species  or 
natural habitat, instead of relating it to the site which has been subject to the damage. 

The  study  indicates  also  to  further  potential  issues  where  the  implementation  of  the  ELD 
biodiversity damage is distorted or hindered and where measures are indicated to intervene in 
the interest of an implementation pursuant to the goals of the Directive, such as the following: 
contemplating  an  extension  of  strict  liability  concerning  occupational  activities  for 
biodiversity  damage  beyond  the  activities  listed  in  Annex  III  ELD;  clarification    of  the 
establishment  of  the  causal  link;  establishment  of  monitoring  obligations  for  operators  or 
competent  authorities  to  enable  them  to  have  access  to  the  information  required  for  the 
notification  obligations;  necessity  to  further  assess  the  need  for  mandatory  or  voluntary 
financial security systems; need to promote exchange of good practices and raising awareness 
about the tools for the implementation of the ELD. 

3.3. 'Study on ELD Effectiveness: Scope and Exceptions' (ELD Effectiveness Study) 

This study represents the core research on the way of the ELD evaluation. It covers six main 
chapters:  Analysis  of  the  scope  of  strict  liability,  analysis  of  the  scope  of  environmental 
damage,  analysis  of  appropriateness  of  significance  thresholds  for  land  and  water  damage, 
analysis  of  the  application  of  the  permit  and  state-of-the-art  defences,  analysis  of  the 
application of the international conventions and instruments listed in Annexes IV and V of the 
ELD,  and  analysis  of  the  possible  incorporation  of  other  international  instruments  into 
Annexes IV or V. 

The study points out at its beginning that it "focuses on the simplification, streamlining and 
harmonisation of the complexities of the ELD, taking into account the mandatory criteria for 
Commission  evaluations  (relevance,  effectiveness,  efficiency,  EU-added  value,  and 

73 

 
 
coherence). Based on the analysis, the study suggests options that the European Commission 
may wish to consider as a priority in a possible future revision of the ELD." 

The study is based on a legal analysis of the ELD as well as on an empirical analysis of its 
implementation.  The  legal  analysis  comprised  the  ELD  itself,  other  related  EU  legislation, 
ELD  transposing  legislation  as  well  as  existing  national  legislation  in  the  Member  States, 
international conventions and relevant environmental law of non-EU States, taking account of 
the relevant literature. The empirical part is based on a literature review, an expert/stakeholder 
consultation  and  includes  also  case  overviews  of  the  six  major  issues  mentioned  above.  It 
takes  particular  account  of  the  previous  Implementation  Study  and  of  the  Legal  Analysis 
Study results, as well as of the ELD training material and of the ELD stakeholder conference. 

Analysis  of  the  scope  of  strict  liability:  The  study  pointed  out  that  an  extension  of  strict 
liability for all activities would further the objective of reducing the loss of biodiversity in the 
EU in the case of biodiversity damage and could make the ELD more effective also in case of 
water  and  land  damage  as  it  would  promote  the  polluter-pays  principle.  Alternatively,  the 
study suggested considering the extension of Annex III to include additional activities on the 
basis of the experience gained in the application with the Directive. This would concern in the 
first  place  an  extension  by  pipeline  transport  of  dangerous  substances  resulting  from  the 
dissatisfying  experience  with  the  oil  spill  from  a  pipeline  in  Coussouls  de  Crau,  France,  in 
2009  into  a  Natura  2000  site.  In  the  second  place,  the  study  mentioned  also  to  add  mining 
activities to Annex III due to the Talvivaara mine accident in Finland in 2012, and possibly 
also activities concerning invasive alien species due to their contribution to halting the loss of 
biodiversity  in  the  EU.  It  did  not  recommend  extension  by  shale  gas  activities  due  to  the 
Commission  Recommendation  that  "Member  States  should  apply  the  provisions  on 
environmental liability to all activities taking place at an installation site including those that 
currently  do  not  fall  under  the  scope  of  the  ELD167."  The  latter  activity  would  however  be 
covered by the existing ELD under Annex III.7.(a) anyway. 

Analysis of the scope of environmental damage: The study finds that unlike in most Member 
States'  legislation  where  there  is  no  differentiation  between  damage  to  water,  land  and 
biodiversity but a single liability system for the prevention and remediation of the risk of, or 
actual, damage to human health and the environment, the ELD divides environmental damage 
into the three categories of land, water and biodiversity damage. According to the study, the 
categorisation  of  environmental  liability  in  the  ELD  has  led  to  a  complex  liability  system 
which  could  be  simplified  and  streamlined  in  order  to  make  the  ELD  more  effective.  As  a 
consequence, an integrated environmental damage scope could cover in particular damage to 
air.  Although  air  cannot  be  remediated  in  the  same  way  as  land  or  water  by  removing 
pollutants,  measures  could  be  carried  out  to  prevent  harm  to  human  health  from  airborne 
pollutants.  The  study  concludes  however  that  including  fauna  and  flora  which  is  not  yet 
protected by legislation as well as an extension for landscapes, seascapes, cultural buildings 
and ancient monuments would cause problems in determining significance thresholds. 

Analysis of the appropriateness of the significance thresholds for land and water damage: The 
study  made  several  suggestions  for  the  consideration  of  the  Commission  to  reconsider  the 
significance threshold of environmental damage. The most important and general is based on 
the appraisal that the lengthy assessments to determine significance render the application in 
particular  of  preventive  action  in  case  of  imminent  threat  of  damage  problematic  (it  is  less 
problematic  for  actual  damage,  as  the  determination  of  significant  actual  damage  applies  to 
long-term measures). The study advocates therefore for lower significance thresholds in case 

167 Cf. supra footnote 96. 

74 

 
 
                                                            
of  imminent  threat  of  damage  because  –  as  practical  experience  has  shown  –  it  is  often 
impossible  to  know  immediately  or  within  short  time  for  the  operator  or  the  competent 
authority  whether  the  possible  damage  may  be  significant.  Other  points  raised  by  the  study 
concern  the  lacking  specification  of  the  degree  of  harm  to  human  health  that  exceeds  the 
threshold  for  land  damage;  the  relationship  between  land  damage  and  groundwater  damage 
(the latter damage category falls under water damage of the ELD but is in all existing national 
legislation  covered  by  land  damage);  raising  the  remediation  standard  for  land  to  a 
comparable standard with water and biodiversity; the appropriateness of the key role played 
by water management plans in the determination of water status and thus in the determination 
of  water  damage;  the  unclarity  regarding  the  basic  entity  for  the  determination  of  water 
damage (is it based on 'waters' as indicated in the ELD or on 'water bodies' as indicated by the 
referred Water Framework Directive?). 

Analysis of the application of the permit and the state-of-the-art defences: The study analysed 
whether  a  level  playing  field  is  necessary  because  15  Member  States  incorporated  the  two 
optional defences in their legislation (so that they can be invoked by operators who then can 
exonerate  themselves  of  their  liability  to  costs)  and  the  other  half  of  Member  States  have 
either no defence incorporated or, in a few cases, allow one of the two optional defences or 
include them as mitigating factors in the assessment. According to the Member States reports 
the  permit  defence  has  been  used  only  once  and  no  report  mentioned  the  application  of  the 
state-of-the-art  defence.  The  study  contemplated  more  general  that  making  both  defences 
mandatory  or  turning  them  into  exceptions  would  lower  the  high  level  of  protection  of  the 
environment according to Article 191(2) TFEU (and could be always strengthened by using 
the environmental protection clause in Article 193 TFEU). The opposite option to delete both 
defences would accord with Article 191(2) TFEU and would be also effective from the law 
and economics approach. The study refers also to a particular criticism against retaining the 
defences  which  is  that  these  defences  would  favour  large  companies  and  disfavour  SMEs, 
hence the study suggests that the Commission may wish to consider as a priority in a possible 
future revision of the ELD the deletion of the permit and state-of-the-art defences. 

Analysis of the application of the international conventions and instruments listed in Annexes 
IV and V of the ELD: Apart from a possible need for clarification if the marine and nuclear 
conventions  listed  in  Annexes  IV  and  V  ELD  are  entirely  excluding  the  application  of  the 
Directive or only to the extent that environmental damage is not covered by the convention, 
the  study  lists  several  reasons  why  deletion  of  the  exclusions  should  be  considered 
(compensation  regime  vs.  environmental  remediation,  no  complementary  and  compensatory 
remediation, limitation of liability under the conventions etc.). The study points however also 
to the polarised opinions in this field and to the complex issues surrounding the relationship 
between the IMO Conventions and the ELD. It concludes that any potential revisions to their 
exclusion from the ELD should be carefully considered and only be made if the reasons for 
deleting  them  override  the  reasons  for  retaining  the  conventions.  Furthermore,  the  study 
recommends to the Commission to consider in a future possible revision of the ELD deleting 
Article 4(3) concerning the limitation of liability for the LLMC and CLNI Conventions, as it 
argues  that  these  conventions  cover  only  claims  for  bodily  injury,  property  damage  and 
economic loss, but not environmental damage. 

Analysis of the possible incorporation of other international instruments into Annex IV or V: 
The study considered the following three international instruments to be possibly included as 
exceptions in Annexes IV or V of the ELD, but dismissed this possibility because of various 
reasons, i.e. their different scope, their non-binding nature and the fact that two of them are 
not  in  force:  the  Offshore  Protocol  to  the  Barcelona  Convention  for  the  Protection  of  the 
Marine Environment and Coastal Region of the Mediterranean; the Protocol on Civil Liability 

75 

 
 
and Compensation for Damage Caused by the Transboundary Effects of Industrial Accidents 
on Transboundary Waters; the Nagoya – Kuala Lumpur Supplementary Protocol on Liability 
and Redress to the Cartagena Protocol on Biosafety. 

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ANNEX 3: MEMBER STATES REPORTS 

Austria 

The ELD was transposed in Austria by both, the Federal Environmental Liability Act and the 
environmental liability acts of the provinces. In line with Article 12(5) of the ELD, Austria 
opted not to allow the conduct of environmental complaints in the case of an imminent threat 
of environmental damage. 

Austria has not experienced any instances of environmental damage or of an immediate threat 
of  such  damage  in  respect  of  which  preventive  or  remedial  measures  were  taken  in 
accordance with the provisions of the ELD. However, several environmental complaints were 
submitted by qualified entities. In the province of Lower Austria, two of these environmental 
complaints  were  initiated  by  approved  environmental  organisations,  but  no  decision  by  an 
authority within the meaning of Article 12(4) of the ELD has yet been taken. Hence, it is not 
possible  to  determine  whether  or  not  these  complaints  have  been  successful.  The  alleged 
environmental damage was to protected species and natural habitats, as well as to water. In 
the first case, the damage was caused by an operator engaging in occupational activities not 
listed in Annex III of the ELD, whereas in the second case, the activity fell within the scope 
of  Annex  III(7)  of  the  ELD.  Two  more  environmental  complaints  were  lodged  in  the 
province  of  Styria  concerning  water  damage  and  damage  to  protected  species  and  natural 
habitats. While one case has been dismissed by the relevant authority due to the lack of any 
environmental damage, the other case is still pending. In both cases, the damage was caused 
by an operators involved in water abstraction and impoundment of water. 

With regard to financial security, Austria reported that the Austrian Association of Insurance 
Companies has created a non-binding recommendation, which includes specimen conditions 
for environmental remedial costs insurance in Austria. Thus, operators have the possibility to 
be  insured  against  risks  of  environmental  damage  covered  by  the  ELD.  Operators  can  also 
cover  compensatory  remediation  but  this  is  limited  to  a  percentage  of  the  costs  of  primary 
and supplementary remediation. 

To  increase  the  overall  effectiveness  of  the  ELD,  the  Federal  Ministry  for  Agriculture  and 
Forestry,  the  Environment  and  Water  management  promoted  information  and  links  to  the 
Federal  Government’s  legal  information  system  and  implementation  acts  on  its  website.  In 
addition,  it  provided  all  relevant  authorities  with  practical  information  through  seminars, 
practical  guides  and  educational  events.  Austria  strongly  opposed  the  adoption  of  the 
Directive, as it disapproved the fact that the nuclear sector of the energy industry should be 
excluded from liability under the ELD, while other forms of energy protection were included. 
In  the  light  of  this,  Austria  urges  the  Commission  to  take  Austria’s  concerns  into  account 
during the review under Article 18 of the ELD. 

Belgium 

Federal government report 

The  federal  government  of  Belgium  reported  no  cases  of  environmental  damage  which  fall 
under  the  ELD.  However,  there  were  a  number  of  cases  of  environmental  damage  falling 
under  the  federal  Law  transposing  the  ELD  concerning  the  protection  of  the  marine 

77 

 
 
 
environment. While no proceedings have been instituted by liable parties, two legal actions 
initiated by the federal State are currently ongoing. 

The federal government amended its Law of 31 December 1963 on civil protection to bring 
the civil security services’ activities within the scope of the ELD. These services act only in 
emergencies  and  take  the  necessary  measures  to  prevent  further  environmental  damage. 
Remedial  measures  are  outside  of  the  scope  of  the  civil  security  services.  Since  the 
transposition  of  the  ELD,  four  major  operations  involving  the  civil  protection  service  in 
relation  to  an  imminent  threat  of  environmental  damage  have  occurred.  They  included  two 
train  crashes,  one  crashed  aircraft  and  oil  pollution  by  a  vessel.  Due  to  the  effective 
preventive action of the Civil Protection Service, the cases did not result in damage within the 
scope of the ELD. Legal proceedings in respect of liability and damage compensation were 
initiated in the case of oil pollution and in one of the train crashes but both are still pending. 

Brussels Region 

The Brussels region reported no confirmed environmental damage cases in the sense of the 
Directive. It faced a ‘cross-region’ incident concerning a waste water treatment plant, which 
has  caused  water  damage.  The  company  stopped  its  water  treatment  and  the  water  quality 
immediately  raised  after  the  incident  to  normal  standards,  preventing  any  real  damage. 
Therefore, no remedial action was necessary. While proceedings were started, the outcome is 
not known yet. 

Flemish Region 

The  Flemish  region  reported  one  instance  of  environmental  damage  covered  by  the 
provisions  of  the  ELD.  The  type  of  environmental  damage  was  water  damage,  as  a  serious 
oxygen deficit resulted in the death of fish. As the source of pollution was in Wallonia, the 
Department  of  the  Environment,  Nature  and  Energy  of  the  Flemish  Government  could  not 
identify  the  perpetrator  and  consequently,  it  could  not  enforce  special  measures.  However, 
the  pollution  has  stopped  and  there  was  no  immediate  need  to  take  additional  remedial 
measures,  as  the  concentration  of  oxygen  has  returned  to  normal  levels.  Efforts  to  find  the 
perpetrator are being made through the appropriate criminal law channels. 

Walloon Region 

The Walloon region identified no cases of confirmed environmental damage under the ELD 
since  the  entry  into  force  of  the  Directive’s  transposing  legislation.  Nevertheless, 
environmental damage has occurred within the scope of the Habitats and Birds Directives and 
Wallonia’s soil pollution legislation, which has a lower intervention threshold than the ELD. 
Currently,  one  case  of  environmental  damage  is  being  investigated  in  cooperation  with  the 
authorities in Flanders to identify the liable operator (this is the same case mentioned above, 
the Flemish 'Bovenschelde' case). 

Wallonia  conducted  several  stakeholder  meetings  and  training  sessions  for  competent 
authorities. It identified two beneficial effects of the ELD. Firstly, after a risk analysis, most 
operators  will  progressively  modify  their  industrial  process  and  their  internal  procedures  to 
avoid incidents. Secondly, when prevention has failed, the ELD provides for remediation to a 
standard that has not existed previously. Wallonia highlighted the problem that there are no 
mechanisms  in  place  to  remedy  damage  on  a  scale  such  that  neither  an  operator  nor  an 
insurance company could bear the scope of remediation necessary. A further difficulty was to 

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determine  whether  an  incident  of  environmental  damage  has  reached  ELD  thresholds. 
Wallonia expects this level of uncertainty to decrease with the experience gathered. 

Bulgaria 

Bulgaria has adopted and implemented three legislations to transpose the ELD, which are the 
Prevention  and  Remediation  of  Environmental  Damage  Act  (PREDA),  Regulation  No  1  of 
2008 on types of preventive and remedial measures under PREDA and the minimum cost of 
such measures, and the Regulation concerning the public register of operators who carry out 
the  activities  referred  to  in  Annex  1  to  Article  3(1)  of  PREDA  adopted  in  2008.  Over  the 
years, Bulgaria has also amended several of its existing laws and continuously informed the 
European Commission on the implementation of the Directive. 

Bulgaria has found no instances of environmental damage within the meaning of the ELD for 
the reporting period. However, it reported four instances of imminent threat, which fell under 
the  Directive.  Of  these,  four  imminent  threats  of  environmental  damage  concerned  waters, 
three concerned soil, and two related to protected species and natural habitats. The identified 
liable  legal  entity  was  the  chemical  industry  and  one  incident  resulted  in  resort  to  judicial 
review  proceedings.  In  the  latter  incident,  measures  are  yet  to  be  implemented,  whereas 
preventive  measures  were  taken  in  the  other  three  cases  and  the  source  of  imminent  threat 
was eliminated. 

To  encourage  the  use  of  financial  security  instruments  in  the  field  of  the  ELD,  Bulgaria’s 
competent  authorities  have  provided  clarifications  on  an  on-going  basis  to  operators  whose 
activities are within the scope of the national legislation transposing the Directive. Bulgaria 
reports 14 insurance policies that were taken out during the period by operators in the field, 
which  represents  an  increase  in  operators’  interest  in  such  insurance  policies.  Bulgaria 
created a register of operators falling within the scope of the ELD and it has promoted and 
practiced  the  exchange  of  relevant  information  and  access  to  information.  Its  competent 
authorities meet on an annual basis to increase the awareness of practical experience gained. 

Bulgaria  concludes  that  its  practical  experience  with  the  ELD  is  limited  but  that  interested 
parties have shown an increased awareness of the legislation. Operators have been active in 
the  provision  of  methodological  assistance  concerning  the  timely  implementation  of  the 
provisions,  including  the  use  of  financial  security  instruments.  Therefore,  the  Directive  has 
been properly applied through national legislation. 

Cyprus 

Cyprus reports that there have been no severe accidents falling within the remit of the ELD. 
This is largely due to the small size  of the island,  the  small  size  of  the  companies,  and  the 
dominance  of  the  service  sector  and  of  activities,  which  by  nature  are  unlikely  to  result  in 
major large-scale environmental accidents. However, Cyprus mentions two instances, which 
showed  the  need  to  enact  the  law.  The  first  instance  concerned  environmental  damage  to 
protected species and habitats, as well as potential (coastal) water damage. The damage was 
caused  by  the  installation  of  drainage  pipes  discharging  into  the  sea.  Upon  discovery,  the 
Department of Environment and the district administration ordered the responsible company 
to  implement  remediation  measures  and  the  coastal  area  was  restored.  The  second  instance 
was a forest fire causing significant environmental damage to protected species and habitats. 
However, as the fire took place before the entry into force of the ELD legislation, the latter 
was  not  applicable  and  in  addition,  liability  for  the  damage  could  not  be  established.  As  a 

79 

 
 
remediation  measure,  the  Forestry  Department  proceeded  with  the  reforestation  of  the 
destroyed forest area. No incident has resulted in resort to judicial review proceedings so far. 

Regarding  financial  security  mechanisms,  the  national  law  of  Cyprus  allows  for  non-
compulsory insurance or other financial security. While consultations have been carried out 
with the financial security sector in the context of transposing the ELD, no market has been 
created  for  such  financial  products,  as  the  market  is  too  small  for  such  policies  and  they 
would be too costly in the light of the current economic crises. Cyprus argues that its SMEs 
are sufficiently dealt with through the permits issued under existing environmental legislation 
and  bank  guarantees.  As  only  one  company  offers  insurance  packages  for  environmental 
damage  so  far,  there  is  no  competition  in  the  insurance  market  and  operator  needs  are  not 
sufficiently  covered.  Hence,  many  liabilities  remain  uninsurable  and  most  large  companies 
are not insured for cases of large scale incidents of environmental damage. Cyprus concludes 
that  the  voluntary  financial  security  has  not  been  successful  to  date  and  that  there  is  no 
interest in insurance packages for environmental liability. Depending on the size and nature 
of  activities,  damage  may  effectively  be  addressed  through  other  legislation  or,  in  cases  of 
serious damage resort to court remains an option under criminal law. 

Cyprus has not established criteria or thresholds for assessing the significance of damage, as 
it  allows  significance  to  be  determined  on  a  case-by-case  basis,  depending  on  the  type  of 
incidence,  the  magnitude  and  the  affected  environment.  It  defines  significant  damage  to 
include the large scale destruction of forests by fires, destruction of the Natura 2000 habitats 
and protected species, pollution that could affect the good status of water bodies and bathing 
waters, and large-scale interventions on the coastline. 

Cyprus considers the ELD as beneficial, as it increases the options available for addressing 
environmental  damage  and  may  in  some  cases  encourage  operators  to  apply  precautionary 
measures or conduct voluntary remediation. Due to  its  limited  availability  of  cases,  Cyprus 
finds it difficult to address the possible challenges of the ELD’s implementation. It foresees, 
however,  that  the  main  problems  will  be  difficulties  in  establishing  causality  between 
environmental damage and the liable operators or in cases of gradual and diffuse pollution the 
determination  of  the  actual  time  period  when  the  damage  occurred.  Furthermore,  Cyprus 
notes  that  despite  efforts  so  far,  awareness  of  main  stakeholder  groups  and  competent 
authorities  remains  relatively  low.  It  suggests  guidelines  and  training  sessions  at  EU  level 
regarding the evaluation of environmental damage and its significance, and it encourages the 
exchange  of  experience  with  other  Member  States  with  regard  to  thresholds  and  particular 
methodologies, as well as the promotion of insurance products. 

Czech Republic 

The Czech Republic transposed the ELD into the Act No. 167/2008 Coll. on prevention and 
remedying  environmental  damage,  the  so  called  “Environmental  Liability  Act”  (EIA).  The 
EIA defines the basic terms and mandates what is considered as damage to the environment. 
It  provides  for  mandatory  financial  security  and  environmental  damage  risk  assessment  for 
operators  to  be  implemented  from  January  2013  onwards.  The  environmental  damage  risk 
assessment  for  operators  of  the  occupational  activities  and  the  financial  security  provisions 
have  been  implemented  in  detail  into  the  Government  Order  No.  295/2011  Coll.  of  14 
September  2011.  The  requirements  of  the  assessment  were  specified  in  the  methodical 
guidelines published by the Ministry of Environment of the Czech Republic. 

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Furthermore,  the  Czech  Republic  established  that  if  the  assessment  demonstrates  that  the 
potential environmental damage exceeds CZK 20 million, the respective operator would have 
the obligation to establish adequate financial security. 

The Czech Republic has found no instances of environmental damage falling under the scope 
of the Directive after its transposition into Czech law. 

Denmark 

Denmark  has  not  reported  any  instance  of  environmental  damage  covered  by  the  ELD’s 
provisions. 

Estonia 

Estonia transposed the Directive through the Environmental Liability Act, which came into 
force on December 16th 2007. Since then, initial application practice has been developed and 
cases have arisen due to the detection of damage or the threat of damage to the environment. 
The Environmental Board as competent authority has initiated 16 proceedings concerning the 
detection  of  environmental  damage  or  the  threat  thereof  on  the  basis  of  the  Environmental 
Liability  Act.  Four  cases  were  recorded  between  2010  and  2013  incurring  environmental 
liability  under  the  ELD,  of  which  environmental  damage  was  identified  in  two  cases  and  a 
threat of environmental damage in two others. The activities causing the damage in the cases 
were  for  the  most  part  listed  in  Annex  III,  including  manufacture,  use  and  storage  of  both 
water and hazardous substances, preparations and related substances but there were also cases 
which were not covered by the list in Annex III and cases in which the derogations provided 
for in the ELD applied. The damage or threat of damage concerned the soil, groundwater and 
protected species and habitats. 

In accordance with the Environmental Liability Act, the Environmental Board has created a 
functional  procedural  system  for  dealing  with  environmental  damage,  which  assesses  risks 
annually  in  cooperation  with  the  other  relevant  authorities.  Both  external  experts  and  the 
environmental Board’s own experts are encouraged to assist on assessing and establishing the 
existence of damage and cooperation with other relevant authorities, such as the Ministry of 
the  Environment,  the  Environment  Inspectorate  and  the  Health  Board  is  developed.  The 
Environmental  Board’s  homepage  provides  information  on  environmental  damage  and  the 
threat  of  damage  by  means  of  a  register  of  environmental  liability  cases.  Estonia  plans  to 
further  develop  and  merge  the  register  of  environmental  liability  cases  with  the 
environmental  information  system  currently  in  use  to  improve  monitoring  data  and  other 
important information and activities. Furthermore, Estonia has organized several information 
days  for  different  target  groups  to  raise  awareness  among  operators  and  the  general  public 
concerning environmental liability and it plans to continue to do so in the future. 

Estonia  has  a  system  of  optional  financial  guarantees  in  operation,  which  is  why  issues 
regarding economic measures are not regulated in the Environmental Liability Act. Currently, 
insurers, while offering a variety of insurance products do not provide liability insurance to 
compensate for damage caused to the environment, as current practice is still insufficient and 
does not allow for relevant insurance products to be developed. Estonia argues that relevant 
practice is needed, which would allow the costs of the damage prevention and remediation to 
be predicted with an accuracy that enables insurers to determine the details of their service on 
that basis. 

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With regard to permit protection, Estonia, by virtue of its discretionary power provided for in 
the ELD, has decided to use national conservation measures relating to permits and the level 
of  science/technology.  Despite  this  exemption,  the  responsible  legal  entity  causing  the 
damage  is  not  released  from  bearing  the  costs  of  measures  to  prevent  the  damage,  the 
obligation to provide information and the obligation to co-operate. 

Estonia  concludes  that  despite  the  small  number  of  cases,  the  ELD  and  the  Environmental 
Liability Act can be regarded as effective. As difficulties in implementing the ELD Estonia 
identified  undefined  legal  terms,  such  as  ‘substantial  damage’,  as  well  as  the  definition  of 
‘baseline  situation’  and  ‘natural  recovery’.  Finally,  it  encourages  cooperation  between 
competent authorities and businesses as to avert environmental damage to occur. 

Finland 

Finland  commissioned  a  report  from  the  Finnish  Environment  Institute  in  2012  concerning 
environmental  accidents  and  damage  to  nature  in  Finland  to  comply  with  the  reporting 
requirement  of  the  ELD.  The  Finnish  Environment  Institute  gathered  information  on  the 
implementation of the ELD from relevant authorities, its environmental accident helpline and 
several other data systems. Based on the report, the Ministry of Environment identified two 
primary incidents of environmental damage between 2006 and 2013 invoking the ELD. The 
type of environmental damage included damage to protected species and natural habitats and 
water damage. The activity causing the damage has been classified as mining operations and 
metal  industry.  Resort  to  judicial  review  proceedings  occurred  in  one  case,  requiring  that 
remedial  measures  under  the  ELD  be  imposed  on  the  operator  due  to  the  emissions  it  had 
caused contrary to the environmental permit requirements. However, remedial measures have 
not been started in either case. 

Finland  could  not  estimate  the  costs  incurred  with  remediation  and  prevention  measures 
because of to the small number of incidents and incompleteness of remedial measures. Due to 
the Act on Environmental Damage Insurance from 1998, it is already mandatory for private 
bodies  whose  operations  entail  a  significant  risk  of  environmental  damage  or  whose 
operations generally cause harm to the environment to be ensured against the risk of legally 
defined  environmental  damage.  However,  this  insurance  only  covers  part  of  the  damage 
falling within the scope of the ELD. The Ministry of Environment has created a report on the 
development of the mandatory environmental liability insurance scheme in 2011. 

France 

France transposed the ELD provisions in 2008 and 2009. In addition, following the serious 
accident caused by a break in a liquid hydrocarbon pipeline in 2009, the French authorities 
decided  to  go  beyond  the  ELD’s  obligations  by  expanding  the  strict  liability  scheme  to  the 
transportation of natural gas pipelines, liquid or liquefied hydrocarbons or chemical products. 

France  did  not  report  any  environmental  damage  cases  falling  under  the  provisions  of  the 
ELD  since  its  transposition.  France  explains  this  absence  of  cases  by  pointing  to  the 
efficiency  of  pre-existing  national  systems  and  its  qualitative  and  quantitative  inspection 
activities  (24,000  in  2012).  These  have  resulted  in  the  issuance  of  2600  warnings,  400 
administrative sanctions and the drafting of 1040 infringements statements in 2012. 

These  monitoring  efforts  are  conducted  jointly  by  the  Ministry  of  Ecology,  Sustainable 
Development  and  Energy,  the  National  Office  for  water  and  aquatic  environments  and  the 
National  Office  for  Hunting  and  Wildlife.  They  are  supported  by  the  national  police,  who 

82 

 
 
find  nearly  25%  of  the  registered  criminal  offenses.    To  improve  coordination  between  the 
activities of different control officers, France developed the OPAL Convergence tool, which, 
through  improved  data  collection  significantly  enhanced  the  management  and  efficiency  of 
the control plans. 

The  French  authorities  have  carried  out  various  actions  to  promote  the  awareness  of  the 
Directive  and  its  mechanisms.  Several  documents  and  summaries  were  produced  by  the 
relevant  Ministry  to  inform  operators  and  a  guide  has  been  drafted  jointly  by  the  relevant 
departments  of  the  government  as  well  as  by  civil  society,  scientific  experts,  lawyers  and 
environmental  protection  associations  to  raise  awareness  of  all  administrative  services  and 
the  public  concerned.  To  allow  for  the  easiest  possible  application  of  the  provisions  of  the 
Directive  on  compensation  for  environmental  damage,  the  French  authorities  developed  a 
tool  on  equivalence  methods.  The  software,  developed  by  the  University  of  Montpellier  in 
collaboration with the Functional and Evolutionary Ecology Centre is available for free and 
allows  relevant  players  to  calculate  the  damage  and  benefits  of  restoration  in  cases  of 
environmental damage. 

Major  operators  are  well  informed  of  liability  regimes  to  which  they  are  subject  and  they 
integrate environmental responsibility into their risk management strategy, including through 
specific  insurance  contracts.  Due  to  the  framework  for  environmental  liability  insurance 
(CARE) developed by the co-reinsurance pool Assurpol and the presence of other reinsurance 
companies,  the  availability  of  insurance  schemes  continues  to  grow  in  France.  Since  2005, 
more and more companies offer specific contracts covering the environmental responsibility 
and this competitive environment has contributed to lower premiums, thereby facilitating the 
incentive for small and medium enterprises to acquire environmental insurance. 

France concludes that the absence of cases falling under the ELD does not imply inadequate 
or  incomplete  implementation  of  the  Directive.  On  the  contrary,  it  argues  that  the  small 
number of cases only shows the preventive effect of the Directive. 

Germany 

Germany reports a total of 60 cases falling under the ELD’s provisions. Most cases involved 
environmental damage  to water  (42), following by damage to protected species and natural 
habitats (27) and to  land  (10).168 Germany did not use  a  classification  system for the liable 
activities nor categorize them according to Annex III ELD. Instead it described the activities 
responsible for the environmental damages or threats. The analysis of the liable activities as 
outlined  by  Germany  shows  that  most  instances  (18)  were  caused  by  biogas  installations; 
around 14 cases were connected with some kind of manufacture, use or storage of dangerous 
substances; a lower number concerned the transportation of dangerous or polluting goods and 
discharges  of  pollutants  into  waters.  For  33  cases,  Germany  provided  information  on  the 
duration  of  remediation  measures.  The  average  duration  of  remediation  action  would  be 
around 5.5 months with the shortest case lasting a few days. In 39 cases, remedial action was 
completed, whereas in 22 cases it was not yet completed at the time of reporting. 

Greece 

The ELD was transposed into Greek law by means of Presidential Decree 148/2009, which 
was  amended  and  supplemented  with  other  legislations  to  cover  issues  concerning  the 

168 The numbers exceed the total of 60 cases because incidents that concerned more than one category of damage are calculated for all 
respective categories. For example, 6 cases involved damage to soil and water, and 14 cases concerned damage to water and biodiversity. 

83 

 
 
                                                            
administrative  organisation  and  implementation  of  financial  guarantees.  The  appointed 
competent agency for the implementation of environmental liability at the central level is the 
Independent  Coordination  Office  for  the  Implementation  of  Environmental  Liability 
(ICOIEL),  supported  by  the  Committee  for  the  Implementation  of  Environmental  Liability 
and  several  other  agencies.  At  the  regional  level,  relevant  entities  are  the  Decentralised 
Administrations  and  the  Regional  Committees  for  the  Implementation  of  Environmental 
Liability. 

Greek law requires mandatory financial security for the operators involved in activities listed 
in Annex III of the Presidential Decree 148/2009. A joint Ministerial Decision will determine 
the type and amount of the financial guarantee, depending inter alia on the type of activity, 
the severity of possible contamination and the degree of risk of occurrence of environmental 
damage.  A  draft  of  the  Decision  foresees  that  the  activities  listed  in  Annex  III  are  to  be 
covered  by  a  compulsory  insurance  scheme  based  on  three  main  categories  of  risk  in 
proportion to the classification of activities. A part of those activities remains covered by a 
system of compulsory financial guarantee established before the enactment of the Presidential 
Decree. 

Greece  reported  52  cases  that  were  handled  according  to  the  requirements  of  the  ELD.  Of 
these,  nine  cases  are  closed,  meaning  that  preventive  and  remedial  measures  have  been 
completed. The type of environmental damage most recorded is soil damage (41%) followed 
by  an  imminent  threat  of  damage  to  water  (25%),  an  imminent  threat  of  damage  to  soil 
(15%),  actual  water  damage  (11%)  and  damage  to  natural  habitats  and  protected  species 
(8%). The damage or threat was mostly caused by the activities of the manufacturing sector 
(32),  particularly  by  industries  producing  basic  metals  and  industries  manufacturing  metal 
products  (19),  and  waste  management  (9).  Only  one  case  involved  the  Greek  judicial 
authorities  where  the  operator  appealed  against  a  decision  by  the  Secretary-General  of  the 
Decentralised Administration ordering the implementation of remedial measures. This case is 
still pending. 

Greece  finds  that  the  implementation  of  the  ELD  positively  affects  both  the  administration 
and the operators towards taking appropriate preventive measures and addressing the damage 
caused  to  the  environment.  At  the  same  time,  it  identified  several  challenges.  Accordingly, 
operators  sometimes  fail  to  take  preventive  measures  and  do  not  comply  with  the 
administrative decisions. Administrative procedures for the determination of preventive and 
remedial measures are often limited due to a lack of funds at the regional level, the staffing of 
the  competent  authorities,  and  a  lack  of  information  in  cases  where  the  operator  cannot  be 
identified.  Greece  further  highlights  its  lack  of  a  legislative  framework  for  soil  and  an 
inadequate application of the waste management and disposal procedures. To overcome these 
difficulties,  Greece  plans  inter  alia  to  issue  a  Ministerial  Decision  concerning  the  way  in 
which the stakeholders will be informed about the implementation of the ELD, to mobilize its 
authorities  to  take  and  implement  horizontal  measures  in  high  environmental  risk 
management  areas  of  particular  national  importance,  to  draft  and  prepare  supporting  base 
studies,  to  create  an  integrated  database,  to  organise  workshops  and  trainings  to  inform  the 
competent  authorities,  and  to  cooperate  with  the  Green  Fund  for  the  financing  of  activities 
towards  accomplishing  the  objectives  of  the  ELD  in  cases  where  the  operator  cannot  be 
identified. 

Hungary 

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To comply with the ELD, Hungary primarily amended its laws in force and drew up two new 
government decrees. As the majority of regulations in effect at the time already covered and 
in  some  cases  exceeded  the  provisions  of  the  Directive,  most  regulations  only  had  to  be 
supplemented.  In  availing  itself  of  the  freedom  granted  to  MS  in  transposing  the  ELD, 
Hungary did not transpose Annex III, as this would have limited the scope of applicability of 
the liability system set forth by the Directive, whereas the intention of the legislator was the 
opposite. 

Hungary reported a total of 573 cases involving the provisions of the ELD. 563 cases were 
confirmed  environmental  damage  cases  and  it  is  estimated  that  around  ten  of  these  are 
pending  cases.  Most  environmental  damage  or  imminent threat  of harm  to the environment 
concerned  water  (244)  followed  by  land  (243),  and  protected  species  and  natural  habitats 
(124). In around 150 cases, Hungary could not classify the activity causing the damage due to 
the fact that the perpetrator was unknown or a private individual. 

Hungary has drafted statutory provisions that include the obligation to sign an environmental 
protection insurance contract under conditions specified in other legislation. This government 
decree  is  still  under  preparation  and  negotiations  to  apply  the  legislation  are  ongoing. 
Hungary pointed to the difficulty that the financial sector refrains from introducing such new 
types of solution. This is also due to the EU rules on neutrality in market competition, which 
limit financial banking and insurance methods and institutional instruments. Nevertheless, the 
Hungarian Ministry of Environmental Protection endeavours  to draw  up  such solutions and 
include them in Hungarian law. 

Ireland 

The  ELD  was  transposed  in  Ireland  by  way  of  the  European  Communities  Environmental 
Liabilities Regulations 2008. There have been no confirmed cases in Ireland under the ELD 
but  four  submissions  are  on-going  and  continue  to  be  assessed  by  the  Environmental 
Protection  Agency  (EPA),  which  is  the  competent  authority  in  Ireland  with  regard  to  the 
ELD. The majority of submissions assessed included damage to protected species and natural 
habitats,  water  damage  and  imminent  threats.  The  damages  or  threats  were  caused  by  turf 
cutting, road construction and waste collection, treatment  and disposal activities, as  well as 
materials recovery. Some of these cases have been notified to the EPA by way of submissions 
from interested parties. None of these submissions involved remedial action under the scope 
of the ELD. Other  cases  were  screened but not subsequently determined as ELD  cases and 
they have been dealt with under other appropriate national legislation. 

Ireland  opted  not  to  make  financial  security  mandatory  when  transposing  the  ELD  and  it 
opposes  the  imposition  of  a  general  mandatory  levy  on  industry  to  cover  environmental 
damage.  It  regulates  risks  to  the  environment  through  strict  licensing  and  enforcement 
systems,  and  existing  legislation  on  Integrated  Pollution  and  Prevention  Control  and  Waste 
includes financial provision requirements as part of license conditions.  The  EPA negotiates 
financial  security  agreements  with  individual  IPPC  and  waste  licensees,  which  can  include 
insurance,  parental  company  guarantees,  and  bonds/bank  guarantees.  Furthermore,  the  EPA 
has reviewed and revised its Guidance on Environmental Liability Risk Assessment, Residual 
Management Plans and Financial Provision which was published in July 2015. 

In  assessing  the  application  of  the  Directive  in  relation  to  protected  species  and  natural 
habitats,  Ireland  points  to  the  uncertainty  when  applying  the  criteria  to  determine  whether 
damage  has  had  significant  adverse  effects  on  reaching  or  maintaining  favourable 
conservation  status.  Another  identified  weakness  was  the  difficulty  to  establish  whether 

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particular instances of damage to the environment fall within the scope of the ELD. Ireland 
concluded that the ELD’s strength is that it provides additional mechanisms, which could be 
used  in  particular  cases  of  environmental  damage  to  supplement  other  EU  and  national 
legislation  to  achieve  the  objectives  of  preventing  and  remediating  environmental  damage 
and apply the polluter pays principle. The ELD is particularly effective where a potential or 
imminent threat has been identified. 

Italy 

Italy  transposed  the  ELD  in  2006  by  means  the  Legislative  Decree  No  152/2006  known  as 
the  Environmental  Code.  This  framework  governing  environmental  damage  is  more 
extensive than the EU framework. This is firstly because national law covers a broader range 
of  natural  resources  protected  by  environmental  damage  prevention  and  remediation  rules 
than provided for in the ELD in Article 2(7). Secondly, the concept of occupational activity is 
more detailed and comprehensive than that of the ELD, providing inter alia for a definition of 
operator.  Furthermore,  Italian  provisions,  as  they  address  the  cases  of  compensation  for 
damage  not  attributable  to  operators,  introduce  a  generic  liability,  which  is  not  limited  to 
operators  alone  but  applies  to  anyone  and  fault  based.  Thirdly,  Italian  law  defines 
environmental  damage  broader,  thereby  applying  the  polluter-pays  principle  to  types  of 
damage  not  covered  by  the  definitions  of  the  Directive.  Fourthly,  Italian  national  law  has 
introduced provisions for compensation for environmental damage, which supplement those 
of  the  ELD.  These  complete  the  scope  of  the  fault-based  and  negligence-based  liability 
regime  created  by  the  Directive  by  extending  the  scope  beyond  instances  of  ‘damage  to 
protected species and natural habitats’. In sum, Italian law on environmental liability allows 
the  Ministry  to  apply  the  polluter-pays  principle  to  anyone  causing  significant  and 
measureable, direct or indirect impairment of any natural resource or of its potential for use. 
Entitled third parties may also request the competent authorities (MEPLS) to take action. 

MEPLS  were  informed  on  an  average  of  about  800  potential  instances  of  environmental 
damage  per  year  between  2007  and  2012,  leading  to  approximately  4900  cases  in  total.  Of 
these,  about  half  were  subjected  to  technical  assessments,  leading  to  15%  of  cases  with  an 
identified imminent threat of damage or actual environmental damage. The precise number of 
the  remaining  instances  of  damage  cannot  be  estimated,  as  they  are  currently  undergoing 
further technical verifications. Consequently, Italy found a total of 17 cases, which, according 
to the criteria of the report can be considered confirmed damage cases where the Ministry has 
identified  an  instance  of  environmental  damage  requiring  remediation.  Of  these,  12  cases 
occurred  due  to  the  same  activity,  namely  waste  management  operations  or  other  activities 
included in Annex III of the ELD, resulting in damage to several natural resources and in five 
cases only one natural resource was damaged. None of the cases involved resort to judicial 
review. In most cases, the remediation process has been launched. 

Italy  criticised  the  narrow  definition  of  environmental  damage  in  the  Directive,  which 
prevents  the  application  of  the  polluter-pays  principle  to  most  instances  where  under  the 
previous national framework the MEPLS have been able to take appropriate action to remedy 
environmental  damage.  Italy’s  efforts  to  change  this  are  reflected  in  its  broader  national 
framework  for  environmental  damage.  In  evaluating  the  pros  and  cons  of  the  technical 
requirements laid down in the ELD, Italy acknowledges the value of equivalence approaches 
from a theoretical point of view but it points to the limitation of the requirement, as they need 
training in their understanding and use, as well as the input of large amounts of data, which 
are often expensive to gather. For these reasons, Italy introduced in its national law the use of 

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other methods than the equivalence methods for a borderline case, particularly when recovery 
is too costly. 

Regarding  the  application  of  remedial  measures,  Italy  highlighted  several  institutional  and 
financial  obstacles.  To  boost  financial  feasibility  of  damage  remediation  measures,  Italy 
introduced  an  additional  mechanism  in  the  form  of  a  fund,  which  is  dedicated  for  specific 
environmental actions serving complementary or compensatory remediation measures. It can 
be  concluded  that  Italy  has  made  considerable  effort  to  implement  the  ELD  and  its  report 
shows that overall limitations to implementation are mainly due to the specific characteristics 
and challenges of the ELD. To improve the latter’s application, Italy considers setting up a 
National Register of environmental liability and damage cases, drawing up Guidelines aimed 
at supporting technical assessments, and analysing financial guarantee tools to facilitate the 
application of environmental damage remediation. 

Latvia 

Latvia’s report listed 16 instances of environmental damage and liability under the ELD. Of 
these,  seven  concerned  environmental  damage  caused  to  protected  species  and  natural 
habitats, four related to water damage and five to land damage. Only one incident resulted in 
resort  to  judicial  review  proceedings.  While  the  competent  court  dismissed  the  identified 
legal person’s claim contesting the authority’s decision, the natural monument could not be 
restored  and  losses  were  calculated  at  LVL  39  600.  Latvia  made  no  further  comments  on 
financial security or other issues related to the ELD. 

Lithuania 

Lithuania  reported  four  confirmed  cases  of  environmental  damage  within  the  scope  of  the 
ELD. All cases involved damage to land and in the majority of cases the damage was caused 
by activities listed in Annex III(7) (manufacture, use, storage, processing, filling, release into 
the  environment  and  onsite  transport  of  dangerous  substances).  No  judicial  review 
proceedings  either  by  liable  parties  or  qualified  entities  were  initiated.  In  only  one  case, 
remedial  actions  have  been  completed,  whereas  in  the  other  three  cases,  they  are  still 
pending. 

Luxembourg 

In Luxembourg, no cases of environmental damage invoking the ELD have been reported. 

Malta 

The ELD was transposed into national legislation by virtue of the Prevention and Remedying 
of Environmental Damage Regulations, which entered into force in 2008 under two acts: the 
Development Planning Act 1992 and the Environment Protection Act 2001. These two acts 
have been conflated into one, the Environment and Development Planning Act. 

The  responsible  agency  for  the  ELD  is  the  Malta  Environment  and  Planning  Authority 
(MEPA). A number of cases within the context of the ELD have been identified. While there 
has  been  no  fully  fledged  case,  certain  cases  invoked  parts  of  the  Directive.  Two  cases 
specifically used specific provisions of the Directive. The first case concerned pollution from 
five batching plants due to the discharge of concrete by-product in a particular protected area. 
Upon discovery, the MEPA took the necessary remedial measures in the absence of any steps 
taken  by  the  operators.  MEPA  filed  a  judicial  protest  against  the  five  plants  to  recover  the 
expenses  incurred  in  the  operation  and  bring  the  valley  back  to  its  pristine  condition. 

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Proceedings are still ongoing in the First Hall of the Civil Court. As outcome of remediation 
process,  the  pollutant  was  removed  and  the  affected  area  was  left  to  regenerate  through 
natural processes. In the second case, the damage to a site forming part of the Natura 2000 
Network  was  damaged  due  to  the  laying  of  alien  material  for  film  production.  No  judicial 
review procedures were initiated and all alien material was  manually removed. A scientific 
assessment  concluded  that  no  damage  was  inflicted  on  the  affected  area.  Hence,  the  ELD 
mechanism was initiated due to possibility of an imminent potential threat. Malta provided no 
information on its financial security mechanisms or other issues related to the ELD. 

Netherlands 

The  ELD  provisions  are  transposed  in  the  Netherlands  through  the  Dutch  Environmental 
Management  Act.  The  Netherlands  set  up  a  point  for  reporting  environmental  damage  in 
2008,  the  competent  authorities  are  consequently  required  to  report  cases  of  environmental 
damage as soon as the data are available. Authorities report to the Centre for Information on 
the  Environment,  which  has  a  helpdesk  to  assist  in  matters  concerning  the  functioning  of 
environmental regulations, including regulations on environmental liability. Since 2008, the 
point has not received any reports of environmental damage but 36 questions or requests for 
information  on  environmental  liability  were  recorded.  To  investigate  whether  there  have 
possibly been cases of environmental damage the Netherlands conducted a quick scan. This 
investigation  showed  that  in  the  Netherlands,  no  use  is  made  of  the  relevant  implementing 
regulations. 

In  asking  relevant  organisations  and  competent  authorities,  it  was  found  that  cases  of 
environmental  damage  above  the  thresholds  in  the  Directive  have  not  occurred,  except 
possibly in one case involving a major fire at the firm ChemiePack, which resulted in damage 
to the soil, surface water and groundwater due to pollution of the water used to put out the 
fire. The activity causing the damage is covered by Annex III (7) of the ELD, as dangerous 
substances were stored and packaged. However, the case as not been reported to the reporting 
point by the competent authorities. It was argued that the competent authorities acted on the 
basis  of  water  and  soil  legislation,  which  overlap  considerably  with  the  legislation  on 
environmental  liability.  The  protection  level  is  higher  in  Dutch  soil  regulations  than  in  the 
laws implementing environmental liability. Therefore, while the objectives of the ELD were 
achieved as remediation measures were taken and the firm was held liable for the costs, the 
competent bodies used different legislations. 

Poland 

Poland  reported  a  total  of  515  cases  involving  the  transposed  provisions  of  the  ELD.  Of 
these, 392 involved environmental damage to land, 92 cases damage to biodiversity, and 49 
cases  damage  to  water.  Regarding  the  classification  of  activities,  the  Polish  report  shows  a 
considerable high number of incidents resulting from retail sale of automotive fuel (68 cases; 
NACE code 50.5). The second major cause of incidents was due to accidents related to land 
transport and pipelines transport with 61 cases, from which 33 concerned transports on roads 
(NACE code 45). 45 cases resulted from the manufacture of chemical products (NACE code 
20) and 36 incidents were caused by electric distribution (NACE code 35). Finally, 28 cases 
related to the collection of waste (NACE code 38.1, 17 cases resulted from the wholesale of 
fuels (NACE code 46.71) and 11 cases concerned waste water treatment. 

In  64  cases,  the  perpetrator  could  not  be  identified.  The  average  duration  of  procedures 
constituted 9.5 months. However, of the 515 notified cases, only 239 could be used for the 
calculation of the average duration, as in many cases either the initial date was not known or 

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not indicated or the procedure was still ongoing at the end of the reporting period in 2013 or 
due  to  several  typos.  A  close  examination  of  the  239  notified  instances  revealed  that  68 
incidents took less than one month, whereas around 10 instances took more than three years 
(excluding  longer  procedures  which  were  still  ongoing).  506  cases  have  been  confirmed  as 
ELD  cases  whereas  171  cases  are  in  progress  and  8  are  still  pending  in  appeal.  44  cases 
resulted in resort to judicial review proceedings, of which 17 were ruled in favour of the party 
and 19 cases had unfavourable outcomes for the party. Poland did not provide information on 
cases  of  imminent  threats  to  the  environment  because  such  information  was  not  mandatory 
according to Annex VI ELD. 

Portugal 

Portugal  transposed  the  ELD  by  means  of  Decree-Law  No  147/2008  of  29  July  2008,  as 
amended  by  the  Decree-Law  No.  245/2009  of  22  September  2009,  Decree-Law  No.  29-
A/2011  of  1  March  2011  and  Decree-Law  No.  60/2012  of  14  March  2012  ("the  EL  Act"). 
The  Portuguese  Environment  Agency  is  the  competent  authority  for  the  purposes  of  the 
implementation of the ELD. 

Portugal has identified two cases of environmental damage falling under the ELD. The first 
case  was  a  leak  of  unleaded  petrol  from  an  underground  tank  into  the  subsoil  at  a  filling 
station.  The  second  case  concerned  the  overflow  of  the  content  of  a  basin  for  collecting 
waste, causing spillage of a mixture of water and fuel oil. Following these leaks, preventive 
measures were taken by the operator with the decommissioning of the tank, soil testing and 
recovery  of  the  product.  There  were  no  judicial  review  proceedings  in  either  case  and  the 
remediation measures have been concluded in both cases. Portugal further reported six cases 
of  an  imminent  threat  of  environmental  damage,  which  particularly  concerned  water  and 
land. 

According  to  Portuguese  law,  operators  who  conduct  the  occupational  activities  listed  in 
Annex III of the EL Act are obliged to furnish financial securities that allow them to assume 
the  environmental  liability  inherent  in  the  activities  they  carry  out.  As  this  obligation  was 
enforced,  operators  and  businesses  informed  the  Portuguese  Environment  Agency  of 
problems  in  relation  to  obtaining  financial  security  instruments.  These  included  the  limited 
coverage and high costs of taking out insurance. Despite these difficulties, the obligation to 
obtain financial securities to cover environmental damage has helped to raise the awareness 
of various stakeholders of the EL regime. 

The  Portuguese  Environment  Agency  has  conducted  several  activities  to  promote  the 
implementation of the EL regime, including the publication of guidelines to clarify concepts 
and  criteria,  the  creation  of  a  specific  section  for  environmental  liability  regime  on  the 
Agency’s  internet  portal,  the  establishment  of  the  Consultative  Council  for  Environmental 
Liability  constituting  of  the  relevant  ministries,  representatives  of  business,  industrial  and 
agricultural associations, municipalities, representatives of the insurance and banking sectors, 
NGOs  and  civil  defence,  the  signing  of  a  protocol  with  the  Portuguese  Association  of  Oil 
Companies  to  establish  and  develop  technical  guidelines  for  the  application  of  the 
environmental liability regime to the distribution and marketing of petroleum products, and 
the participation and organisation of explanatory meetings and seminars on the topic. 

Portugal  identified  some  limitations  and  constraints  when  implementing  the  ELD.  It 
highlighted the underlying subjectivity with regards to the concepts of ‘baseline condition’, 
‘imminent  threat  of  environmental  damage’  and  ‘environmental  damage’  due  to  the 
complexity of technical criteria for assessing cases. This resulted in increased difficulty when 

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applying the concepts to practical situations. As a consequence, Portugal set up the Standing 
Committee for Monitoring Environmental Liability, which incorporates competent bodies in 
the  spheres  of  water,  soil  and  protected  species  and  natural  habitats  to  provide  technical 
support  for  assessing  cases  and  to  harmonise  the  operators’  and  authorities’  approaches  to 
those technical concepts. 

Portugal  concludes  that  the  ELD  contributes  positively  to  increased  awareness  among 
operators  of  issues  connected  with  the  environmental  risks  involved  in  the  pursuit  of  their 
activities  and  particularly  of  ways  to  reduce  them.  The  obligation  to  obtain  financial 
securities proved to be a significant instrument in raising the various stakeholders’ awareness. 

Romania 

Romania  reported  five  cases  of  environmental  damage  which  fall  under  the  ELD.  Two  of 
these cases concerned soil pollution by oil caused by railway accidents. One case concerned 
soil  pollution  by  nitric  acid  caused  by  road  accident;  one  case  concerned  pollution  of  the 
surface waters of a river with petroleum products and one case concerned imminent threat of 
damage,  where  hazardous  and  non-hazardous  waste  was  improperly  stored  on  land,  risking 
soil  and  groundwater  pollution.  Appropriate  measures,  including  the  transportation  to  the 
relocation site were undertaken and no environmental damage was caused. 

None of the cases involved resort to judicial review proceedings and the remedial measures 
have been concluded in all five cases. 

Romania  has  not  yet  developed  any  financial  security  instrument  according  to  the  ELD. 
While the Ministry of Environment and Climate Change has started proceedings for awarding 
a  public  procurement  contract  for  a  study  on  the  financial  instruments  needed  to  cover 
insurance  for  environmental  damage,  no  one  participated  in  the  auction.  Nevertheless, 
according  to  its  national  mining  law,  operators  working  in  this  field  are  obliged  to  have 
financial guarantees. The most difficult problem identified by Romania is the calculation of 
the financial guarantee and the development of the financial security instruments and markets 
as  required  by  the  ELD.  These  difficulties  arise  due  to  the  lack  of  expertise  in  financial, 
economic and liability matters. 

Slovakia 

Slovakia  transposed  the  ELD  into  national  law  by  means  of  Act  No  359/2007  on  the 
prevention and remedying of environmental damage and amending certain acts in 2007. The 
central  administrative  body  for  the  environmental  liability  regime  is  the  Ministry  of 
Environment of the Slovak Republic, which carries out the monitoring procedures, operates 
an information system, recovers costs arising for the state in connection with preventive and 
remedial measures, and coordinates tasks with other national and international bodies. 

Slovakia has not recorded a case of environmental damage or direct threat thereof since 2007. 
To  promote  the  implementation  of  the  ELD,  the  Ministry  of  Environment  has  raised 
awareness  among  interested  parties  by  means  of  trainings,  conferences,  documents, 
guidelines,  information  sheets,  brochures  and  websites.  The  Slovak  Environment  Agency’s 
Centre  for  the  Assessment  of  Environmental  Quality  has  created  a  methodology  for 
differentiating Slovak territory in accordance with the potential risk of severe environmental 
damage.  In  this  way,  important  basic  graphic  information  on  the  spatial  distribution  of  the 
highest-quality natural resources in Slovakia guides operators in determining the situation. In 
accordance  with  the  Act,  Slovakia  set  up  an  information  system  for  the  prevention  and 

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remedying  of  environmental  damage  with  the  purpose  of  collecting  data  and  providing 
information  on  environmental  damage.  Further,  Slovakia  established  a  register  of 
notifications, an environmental damage register, an operators’ register, and a register of legal 
proceedings. 

Slovakia opted to introduce the mandatory financial security framework for operators, hence, 
the  Act,  which  entered  into  force  in  2012,  provides  for  mandatory  financial  coverage  for 
liability for environmental damage. The amount of financial coverage must correspond to the 
amount of forecast costs for remedial activity and the requirement is integrated in the permit 
procedure.  The  operator’s  compliance  with  these  obligations  is  monitored  by  the  state 
administration. Slovakia noted that SME enterprises constitute a gap in the implementation of 
the Act, as these entities are not able to carry out an environmental audit, risk assessment or 
cost estimate for remedial activity due to financial constraints. 

Accordingly, it cannot  be  clearly  stated whether  financial coverage for individual operators 
will  be  sufficient,  since  the  Act  did  not  stipulate  the  amount  of  financial  security,  and  no 
environmental damage has been recorded so far. Slovakia concludes that given the range of 
issues covered and its interconnectedness with a large quantity of specific legislation in the 
sector  related  to  nature  protection,  water  and  soil,  the  implementation  of  the  ELD  is  very 
challenging. 

Slovenia 

Slovenia reported no case of environmental damage meeting the requirements of the ELD. 

The Ministry of Agriculture and Environment conducted two specialist studies on the use of 
financial  security  instruments  for  the  implementation  of  the  ELD.  Recommendations  from 
these studies included that mandatory liability insurance for the prevention and remedying of 
environmental  damage  is  not  yet  appropriate  in  Slovenia.  Instead,  a  strategy  promoting  the 
supply and use of financial security instruments by all stakeholders should be designed and 
implemented,  the  insurance  sector  should  be  encouraged  to  develop  ELD  products,  and 
relevant entities preventing environmental damage should be informed about this issue. The 
feasibility  of  using  an  existing  public  fund  for  environmental  protection,  the  Eco  Fund,  to 
cover the costs of measures to remedying environmental damage should be assessed when the 
obligation is passed on to the State. 

Spain 

The  ELD  was  transposed  into  Spanish  law  through  Law  No  26/2007,  which  was  partly 
implemented  by  the  Royal  Decree  No  2090/2008.  It  provides  a  new  administrative 
framework for remedying environmental damage. 

Spain recorded 12 environmental liability cases involving damage to land, to water and to the 
coastline  and  bays.  The  damages  were  caused  by  ship  building  and  repairs,  transport  via 
pipelines,  manufacture  of  other  chemical  products  and  the  textile  industry.  All  operators 
involved  in  these  damages  were  covered  by  Annex  III  of  the  Law  No  26/2007  on 
environmental liability. Only one case resulted in an administrative appeal lodged in respect 
to the obligation to prevent, avoid or remedy the damage, which is still pending. Three cases 
have  reached  the  courts  and  the  legal  proceedings  are  still  ongoing.  Due  to  remediation 
processes  implemented  to  remedy  environmental  damage,  the  damaged  natural  resources 
have returned to their baseline condition. 

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In  all  cases  where  remedial  work  has  begun,  the  costs  have  been  covered  in  full  by  those 
responsible for the damage. According to the Law, operators of certain activities must have a 
financial  guarantee,  which  enables  them  to  pay  for  the  potential  environmental  liability 
inherent to the activities they intent to carry out. The Spanish authorities adopted Order No 
ARM/1783/2011  to  determine  the  order  of  priority  and  the  timetable  for  adopting  the 
ministerial  orders  that  will  require  a  financial  guarantee  on  environmental  liability.  This  is 
first  to  be  discussed  with  the  Government  Executive  Committee  on  Economic  Affairs,  the 
Autonomous  Communities  and  the  sectors  affected.  Hence,  the  requirement  to  hold  a 
financial guarantee will be introduced gradually. All sectors of activity have been classified 
into three priority levels, according to which the government will introduce the obligation to 
hold financial guarantees. In the meantime, Spanish legislation requires those operators that 
are under this obligation, to conduct an environmental risk assessment to find out if they are 
obliged  to  hold  a  financial  guarantee  and  if  so,  what  the  value  would  be.  The  Spanish 
authorities  have  published  a  document  to  assist  and  guide  the  different  sectors  with  their 
drafting  of  sectorial  risk  assessments  and  they  provide  for  technical  assistance  through  the 
operation of a mailbox for queries from sectors or groups of professional activities. To assist 
in the calculation of the costs of remedial actions, the government has created a methodology 
named  the  Standard  Environmental  Liability  Tender  Form,  including  an  IT  application.  It 
adopted several  other guidelines and tools to facilitate the assessment of sectorial risks and 
the calculation of financial cost of damage. 

Currently, there are over 50 sectors in Spain drawing up tools to assess sectorial risks to be 
submitted  to  the  Technical  Commission  for  Damage  Prevention  and  Remediation  for 
evaluation.  Spain  continues  to  conduct  numerous  training  courses  and  information  sessions 
on the application of environmental liability rules. 

Sweden 

Sweden reported five incidents of environmental damage within the scope of the ELD. These 
involved  bio-oil  leakage  to  a  preservation  area,  leakage  of  diesel  fuel  from  a  gas  station 
resulting  in  contamination  of  soil  and  water,  leakage  of  contaminated  oil  resulting  in  water 
damage, the emission of chemicals into a creek in a nature preservation area causing soil and 
water damage, and leakage of tall oil to the Baltic archipelago of Söderhamn. The activities 
causing  the  damage  were  the  manufacture  of  biofuels,  trade  with  fuels  and  the  food 
processing industry. Two of the cases were dealt with by competent authorities following a 
request for action. While the claimants have been successful in one of these cases, both are 
still ongoing. Two cases were dealt with by the competent authorities following an imminent 
threat of damage. The claimants were successful in both cases and one case has been closed, 
whereas the other is still ongoing. The last case was dealt with by courts but it was dropped 
after investigation. The remediation processes was finalized in most cases. 

United Kingdom 

The  UK  transposed  the  ELD  in  a  number  of  transposing  regulations  due  to  the  fact  that 
environmental  issues  are  a  devolved  matter.  Consequently,  England,  Wales,  Scotland, 
Northern Ireland and Gibraltar have different legislation implementing the ELD. Overall, the 
UK reported 19 cases, of which eight occurred in England, eight in Wales, two in Scotland, 
and one in Northern Ireland. Twelve of these are confirmed cases of environmental damage 
and  seven  were  cases  of  an  imminent  threat  to  environmental  damage.  Twelve  cases  are 
closed,  while  seven  remain  open.  Nine  cases  and  two  cases  of  imminent  threat  concerned 
land damage, two cases and five cases of imminent threat were related to biodiversity and one 

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case  comprised  damage  to  water.  Two  cases  required  complementary  or  compensatory 
remediation  but  none  of  the  cases  mentioned  above  resulted  in  resort  to  judicial  review. 
Several  other  incidents  were  mentioned  but  not included in the report as ELD cases due to 
different  reasons,  such  as  cases  where  the  pollution  was  not  serious  enough  to  trigger  the 
ELD,  the  damage  was  historic,  it  occurred  before  the  transposition  date,  the  activity  fell 
outside of those listed in Annex III of the ELD, or the liable operator could not be found. 

The  UK  strongly  opposes  the  imposition  of  mandatory  financial  security  by  operators,  not 
least  until  a  clear  cost  benefit  assessment  has  been  undertaken.  Its  preferred  approach  is  to 
allow the insurance and other financial security markets to develop and respond by offering a 
voluntary cover. The English and Welsh Environmental Permitting legislation provides for a 
requirement on an operator of an environmental permit to be technically competent to operate 
the  facility.  The  assessment  includes  the  obligation  for  the  operator  to  obtain  financial 
security  to  meet  the  financial  obligations  of  a  permit.  The  insurance  industry  reports  a 
growing  Environmental  Impairment  Liability  market  in  the  UK,  offering  a  wide  and 
competitive range of insurance products. The take up of insurance has increased slowly but a 
number of new entrants have been reported in the past few months. Moreover, indemnity for 
ELD  driven  exposures,  such  as  biodiversity  damage  is  widely  available.  To  promote  and 
implement the financial security instruments, a report was published seeking to identify the 
capabilities  of  different  classes  of  liability  insurance  to  provide  environmental  cover.  The 
insurance  and  brokerage  sector  worked  together  to  ensure  that  the  publication  was  widely 
disseminated.  Further  promotional  work  was  conducted  by  different  sectors,  including 
information sheets, references in newsletters, hosting client forums and developing a series of 
claims  scenarios  identifying  the  potential  liability  in  relation  to  several  fairly  common 
environmental incidents. 

In assessing matters arising from the Commission’s ELD report of 2010, the UK reports that 
the permit and state-of-the-art defences have been adopted in all jurisdictions within the UK 
(except from the permit defence not applying to GMOs in Wales). To promote the application 
of  the  Directive,  the  UK  conducted  trainings,  awareness  raising  activities  and  provided 
information through its website. 

The  UK  reported  that  domestic  law  is  applied  more  quickly,  effectively  and  efficiently  for 
smaller scale cases than for large-scale cases. While there is consensus that the threshold for 
land damage provided for in the ELD is appropriate, it has been pointed out that in practice it 
is  often  difficult  to  establish  whether  there  is  a  significant  risk  of  harm  to  human  health. 
However, due to guidance to give practical effect to the thresholds in determining significant 
damage,  regulators  have  increasingly  confidence  in  taking  decisions.  As  to  the  relationship 
between the ELD transposing legislation and pre-existing legislation, the UK clarifies that for 
environmental damage to water, protected species and natural habitats, the terms of the ELD 
in  particular  on  compensatory  remediation  are  generally  more  stringent  than  in  existing 
legislation. However, regarding land damage, there is more scope to use other legislation to 
achieve the remediation objectives. 

The  UK  concludes  that  the  strengths  of  the  ELD  are  that  it  implements  the  polluter  pays 
principle  and  the  ecosystem  services  approach  to  remediation.  Compared  to  its  existing 
regimes, the ELD has the benefit of introducing a requirement for compensatory remediation 
where environmental damage to water, protected species or natural habitats has been caused. 
This  may  result  in  additional  environmental  improvements  paid  for  by  the  operator,  which 
would not have been required under existing legislation. The UK also acknowledges that the 
ELD provides a quicker and simpler mechanism for remedying harmful land contamination 

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than existing regulatory regimes in certain circumstances. The UK further welcomed that the 
ELD  has  given  enforcing  authorities  wider  powers  to  recover  costs  from  responsible 
operators.  One  stakeholder  from  the  shipping  industry  considered  the  ELD  as  positively 
complementing  international  conventions,  as  it  applies  to  incidents  not  covered  by  the 
conventions.  However,  the  UK  also  criticised  that  determining  whether  the  threshold  of 
environmental damage has been reached is challenging, in particular when reliable data are 
lacking  or  other  practical  difficulties  hinder  the  collection  of  necessary  information. 
Furthermore,  raising  awareness  of  the  ELD  remains  a  challenge  even  though  awareness  is 
growing as more cases are handled under the Regulations. 

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ANNEX 4: THE POLLUTER-PAYS PRINCIPLE 

The ELD establishes a framework based on the polluter-pays principle to prevent and remedy 
damages on certain environmental media. 

Concepts of cost allocation: 

Economic  activities  often  create  emissions  discharged  into  air,  soil  or  water  and  having  a 
detrimental  effect  on  flora  and  fauna  or  human  health;  this  is  what  is  often  referred  as 
'external effects' of an activity.  On a macro-economic level, the question arises whether the 
public  or  a  specific  person  or  group  of  persons  have  to  bear  the  costs  of  preventing  and 
remedying the costs of such environmental damages.  If the costs are attributed to the person 
responsible, the 'external effects' are considered to be internalized. This is what the 'polluter-
pays principle' is aiming for. If the costs are, however, born by the public, a 'community-pays' 
system  is  implemented.  The  several  concepts  of  cost  allocation  shall  be  described  in  the 
following with a focus on the polluter-pays principle: 

The polluter-pays principle (PPP) as the relevant cost allocation principle 

Article  191(2)  TFEU  provides  that  the  Union  policy  on  environment  shall  be  based  on  the 
principle that the polluter should pay169. This is also in compliance with Article 16 of the Rio-
Protocol  and  reflected  in  several  secondary  legislative  acts  of  the  EU.  The  polluter-pays 
principle is one of the main principles of EU environmental law and policy. The theoretical 
roots of the polluter-pays principle go back to welfare economics whose main assumption is 
that the highest possible welfare is achieved when the economic forces of supply and demand 
are balanced and external influences are absent. This state of economic equilibrium cannot be 
attained if an activity of a person has a negative impact on the welfare of a third party without 
compensating the damages; in this case the prices do not reflect the true costs of the person’s 
product.  A  negative  external  effect  occurs.  The  polluter-pays  principle  aims  to  internalize 
external effects the polluter's activity causes. 

There are three main strategies how to internalize the external effects: 

a.) The Direct Regulatory Approach ('Command-and-Control') 

One way of dealing with external effects may be the setting and enforcing of environmental 
standards.  The  occurrence  of  external  effects  shall  be  prevented  or  respectively  minimized 
through  the  implementation  of  commands  and  prohibitions.  A  total  ban  of  environmentally 
harmful activities is in many cases not wanted due to economic reasons. Hence, policymakers 
are  challenged  to  define  an  acceptable  degree  of  pollution.  Emission  ceilings  or  technical 
requirements  can,  inter  alia,  express  these  standards.  Fines  shall  regularly  ensure  that 
companies  comply  with  the  commands.  If  the  polluter  bears  the  abatement  costs,  he 
internalizes the external effects – at least partially. 

b.) Market-based Instruments 

The internalization of external cost can also be obtained through market-based instruments. 
The market-based approach gives market players a wider margin of discretion than the direct 
regulatory  approach,  because  it  enables  them  to  choose  how  to  adjust  the  desired  (and 

169 "Union policy on the environment shall aim at a high level of protection taking into account the diversity of situations in the various 
regions of the Union. It shall be based on the precautionary principle and on the principles that preventive action should be taken, that 
environmental damage should as a priority be rectified at source and that the polluter should pay." 

95 

 
 
 
                                                            
politically stated) environmental goals (what leads to dynamic efficiency). The market-based 
instruments  (MBIs)  include  especially  environmental  taxation,  charges,  tradable  pollution 
permits,  property  rights  and  liability  regimes.  In  EU  environmental  law,  there  are  several 
market-based  instruments  implemented,  first  and  foremost  through  the  ETS-Directive 
(tradable emission permit approach) and the ELD (liability approach). 

The use of MBIs in environmental policy is often seen as advantageous due to their ability to 
correct  market-failures  in  a  cost-effective  way.170  A  system  of  liability  for  environmental 
damages constitutes an internalization strategy and can be considered an MBI.171 

Environmental  liability  rules  determine  under  which  circumstances  and  to  which  degree  a 
party causing an external effect has to provide compensation. The polluter bears the costs for 
preventing  or  remedying  environmental  damage.  In  doing  so,  potential  polluters  take 
(potential)  external  costs  into  account  in  their  investment  decisions.  Operational  decisions 
regarding the production process and the quality of the product are made by considering the 
potential  external  costs  arising  from  them.  The  liability  rules  incentivise  insofar  an 
environmental sound behaviour. And at the same time they ensure that damage is prevented 
due to the required preventive measures to be taken by the operator and that the environment 
is fully restored. 

c) Voluntary Approaches 

Agreements and other instruments on a voluntary basis can also be a possibility to prevent the 
occurrence of external effects. Voluntary labels can be considered as soft version of a market-
based instrument since they indeed influence the consumer behaviour but do not oblige the 
polluter  to  bear  certain  costs;  the  polluter's  disadvantage  is  more  indirect,  insofar  as  the 
consumer might opt for a less-polluting product. 

It  can  be  concluded  that  the  PPP  aims  to  allocate  the  social  costs  of  a  certain  polluting 
activity  at  the  responsible  person.  When  implementing  the  PPP  through  a  legal  act,  the 
following points have to be considered by the legislature: 

•  Choice of methods: Which (regulatory, economic, voluntary) instruments shall ensure the 

internalization of the external effects? 

• 

Identification of the polluter responsible: Which person shall bear the costs? Often more 
than one person is, somehow or other, causal for the environmental damages. It is up to 
the  legislature  to  define  the  personal  scope  of  the  PPP  implemented.  The  incentive 
function  of  the  PPP  necessitates  that  the  costs  are  borne  by  the  persons  capable  to 
influence  the  impacts  on  the  environment  by  changing  their  behaviour.  Secondary 
legislation like the ETS-Directive and the ELD specify which 'persons' shall be held liable 
for  pollution  caused  ('channelling  of  liability',  in  particular  important  under  a  strict 
liability standard). 

•  The  extent  of  the  PPP:  What  costs  shall  be  recovered  and  how  can  these  costs  be 
measured?  A  human  activity  may  have  a  multitude  of  different  impacts  on  other 
economic  activities  and  environmental  media.  It  is  up  to  the  legislature  to  define  the 
extent to which external effects are attributed to the polluter172; efficiency considerations 

170 See Commission, Green Paper on market-based instruments for environment and related policy purposes, COM(2007) 140 final, p. 3. 

171 Cf. EEA, Using the market for cost-effective environmental policy – Market-based instruments in Europe, EEA-Report No 1/2006, pp. 38 
et seq. 

172 Cf. Article 9 WFD: "water user have to a price reflecting the financial costs as well as the environmental and resource costs of a water 
service". 

96 

 
 
                                                            
can play role in this regard. However, the PPP as set out in Article 191(2) TFEU calls in 
principle for a broad internalization of social costs. A policy mix between 'command-and-
control' and market based instruments can be used to achieve the desired internalization at 
the lowest costs possible. 

Other concepts of cost allocation 

a) Beneficiary-pays principle 

The  concept  underlying  the  PPP  is  that  the  person  responsible  for  a  certain  environmental 
damage has to be held financially liable; the polluter has to bear the abatement costs or costs 
that arise due to certain production restrictions, including the costs under the ELD for taking 
preventive action in case of imminent threat of environmental damage and remedial action in 
case environmental damage has already occurred. In contrast, the beneficiary-pays principle 
attributes these costs to the persons who profits from an intact environment. The beneficiary-
pays  principle  constitutes  another  method  to  allocate  resources  economically  efficient.  In 
other  words,  the  beneficiaries  of  environmental  standards  and  restrictions  imposed  on 
polluters  have  to  pay  for  their  implementation.  The  beneficiaries  can  be  a  certain  group  of 
people interested in the conservation of a certain natural area or environmental medium173 or 
could be the general public. In the latter case the beneficiary-pays principle is tantamount to 
the 'community-pays principle', described below. Subsidies granted by the State to industrial 
activities  in  order  to  promote  higher  environmental  standards  can  be  considered  as  an 
example  for  the  'beneficiary-pays  principle'  where  the  general  public  pays.  However,  it 
should be mentioned that there is also another view on the 'beneficiary-pays principle' which 
differs from the prescribed concept insofar as it does not address the beneficiaries of a certain 
environmental  quality  but  rather  the  beneficiaries  of  a  certain  polluting  activity,  e.g.  the 
purchasers of the goods manufactured in such an activity. The latter concept is a sub-form of 
the polluter-pays principle and should – in order to have a clear separation – be better called 
'user-pays-principle'. 

b) Community-pays principle 

The PPP is a concept that seeks to attribute the costs to the persons responsible for a certain 
environmental damage. The opposite of this approach is what can be called community-pays 
principle. Here, not the actual polluter has to bear prevention or remediation costs but rather 
the public. Thus, the costs resulting from a polluting activity are socialized. The 'community-
pays principle' is often de facto applied. When statutory environmental standards are imposed 
on  (e.g.  industrial)  activities,  there  is  usually  some  (more  or  less  significant)  residual 
pollution. Often the operator is not held liable for that but rather the general public. The same 
counts for environmental damages resulting for small, scattered sources of pollution (diffuse 
pollution) for which nobody can be held responsible. 

c) Ability-to-pay-principle 

The ability-to-pay principle is an economic concept according to which the costs for certain 
measures  (prevention  of  damages,  remediation/restoration  of  environmental  goods)  are 
allocated  according  to  economic  capacities  of  the  payers.  The  ability-to-pay  principle  is 
applied, for example, to the income taxes;174 persons with higher salaries pay more taxes than 
persons with lower income. The ratio behind this concept is to acquire revenues in order to 
finance public goods to the benefit of all members of the society. The ability-to-pay principle 
is – as far as can be seen – not applied in (EU) environmental law. 

173 Example: The inhabitants of X want the river flowing through their village clean. In order to achieve that goal, they pay the company 
discharging their effluents in the river new cleaning equipment. 
174 Cf. F. Vanistendael, Ability to Pay in European Community Law, in EC Tax Review 2014-3, pp. 121 et seq. 

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Efficiency considerations 

Efficiency considerations may have a bearing on cost allocation. The choice of the legislature 
where  to  allocate  the  environmental  costs  is  also  influenced  by  certain  economic  criteria. 
According  to  Article  191(2)  TFEU,  the  EU  environmental  policy  is  based  on  the  polluter-
pays principle; thus, the costs shall in principle be attributed to a person responsible for it and 
capable  to  reduce  the  total  amount  of  pollution  efficiently  (incentive  effect  of  "making  the 
polluter  pay").  However,  in  some  cases  it  is  unpractical  or  very  costly  to  identify  the 
responsible  polluter  and/or  to  allocate  the  costs  to  him.  If  this  is  the  case,  efficiency 
considerations may justify the attribution of costs not to the polluter but rather to the public. 
An example for that is given in the ELD: According to its Article 8(2) second subparagraph 
the  authority  may  decide  not  to  recover  the  costs  for  preventive  or  remedial  actions  if  the 
expenditure to do so would be greater than the recoverable sum. 

The establishment of the causal link 

The  polluter-pays  principle  can  be  regarded  the  expression  in  economic  terms  (cost 
allocation) of the legal principle of allocating the legal responsibility of a certain human doing 
(activity) to a certain effect (damage), only where the activity is causal to the effect. Thus, the 
polluter-pays principle as materialized in the ELD requires the establishment of a causal link 
between  the  liable  activity  and  the  environmental  damage  or  the  risk.    Since  the  ELD  itself 
does not specify how such a causal link is to be established, such a definition falls within the 
competence  of  the  Member  States.  As  the  CJEU  stressed  in  the  case  C-378/08  (ERG  I)  the 
Member  States  have  a  broad  discretion  when  developing  the  polluter-pays  principle.  They 
can,  for  instance,  foresee  a  presumption  of  causality  as  long  as  there  is  plausible  evidence 
capable of justifying this presumption, for example through the identity of substances used in 
the  activity  and  the  pollutants  found  at  the  damaged  site  or  through  a  certain  vicinity  of 
activity and damage175. Where no causal link can be established between the activity and the 
environmental damage or the imminent threat of damage, such a situation does not fall within 
the material scope of the ELD and has, therefore, to be treated under national law. 

175 CJEU C-378/08 (ERG I) para. 57. 

98