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: The duty of Member States to enforce effective, proportionate and dissuasive penalties in case of infringement of EU environmental law as a general principle of EU law: detailed sanctions for breaches of the ETS regime and relevant CJEU case-law

As already noted, the ELD is seen as the most prominent piece of legislation obliging Member States to adopt a specific regime to transform the "polluter pays" principle into a set of hard and fast rules applicable to the persons responsible, thus also encouraging the enactment of sanctions against the offenders; that said, EU environmental law includes many other pieces of secondary legislation actually obliging Member States to establish effective, proportionate and dissuasive penalties and sanctions for any infringements, and to take all measures necessary to ensure that those penalties are implemented.

Examples of this kind are manifold; this is not by chance, the earliest of them date back to the same period in which the ELD was adopted, and thereafter this solution gradually expanded and now applies to most of the environmental rules originating at EU level.

More precisely, under relevant pieces of EU legislation, the Member States are subject to a three-fold obligation: (a) to lay down rules on penalties applicable to infringements of the national provisions adopted pursuant to the relevant EU regulations or (more frequently) directives, and to enact them in such a way that they are 'effective, proportionate and dissuasive’; (b) to take all necessary steps to ensure that these measures are implemented; (c) to notify the relevant penalties (as well as any subsequent amendment thereof) to the Commission, in order to guarantee proper and punctual sharing of information on this topic between EU States and institutions, as well as compliance with the duties set out above.[1]

In this vein, and aside from the other pieces of legislation mentioned below, it is worth citing (a) Article 16 of the already quoted ETS Directive 2003/87, containing the same obligations referred to above, plus a detailed series of sanctions which will be discussed below; (b) Article 60 of Directive 2006/88/EC on animal health requirements for aquaculture animals and products thereof, and on the prevention and control of certain diseases in aquatic animals; (c) Article 50 of Regulation (EC) no. 1013/2006 on shipments of waste; (d) Article 126 of Regulation 1907/2006/EC establishing the so-called REACH regime, i.e. one of the most ambitious and all-encompassing pieces of legislation worldwide based on the precautionary principle and aimed at securing inter alia 'a high level of protection of human health and the environment’; (e) Article 34 of Directive 2013/30/EU on safety of offshore oil and gas operations.

Almost invariably, the relevant EU legislative acts impose on Member States the requirement to enact ‘effective, proportionate and dissuasive penalties’; the CJEU has often guided Member States in focusing on the above parameters. In particular, in the Total Waste Recycling case, the Court clarified that national courts are required, when reviewing the proportionality of such penalties, to take particular account of the risks for the environment or human health that may be caused by the infringement.

However, when deemed opportune, the notion of ‘effective, proportionate and dissuasive penalties’ is further specified by referring to parameters that can certainly provide useful guidance in general. This is true, for instance, of Directive (EU) 2016/802 relating to a reduction in the sulphur content of certain liquid fuels[2]: in implementing at EU level the corresponding requirement set forth by the MARPOL Convention, and in particular its Article 4(4), Article 18 of the Directive establishes that penalties

may include fines calculated [...] as to ensure that the fines at least deprive those responsible of the economic benefits derived from the infringement [...] and that those fines gradually increase for repeated infringements.

Even more specific is the regime set forth by Regulation (EU) 995/2010 laying down obligations for operators that market timber and timber products, whose Article 19 establishes that penalties may include

fines proportionate to the environmental damage, the value of the timber or timber products concerned and the tax losses and economic detriment resulting from the infringement, calculating the level of such fines in such way as to make sure that they effectively deprive those responsible of the economic benefits derived from their serious infringements, without prejudice to the legitimate right to exercise a profession, and gradually increasing the level of such fines for repeated serious infringements; seizure of the timber and timber products concerned, immediate suspension of authorisation to trade.

The panorama of sanctions that EU law requires Member States to implement also contains interesting variations. In line with the growing importance of publicising the failure by the persons involved to fulfil their environmental obligations, in some cases EU law establishes that the sanctions to be applied include ensuring publication of the names of the offenders. This is the case contemplated by Article 16(2) of the ETS Directive, requiring the disclosure of the names of those ‘operators or aircraft operators’ that do not surrender sufficient allowances.

The complexity of the ETS regime on allowances has forced the EU to couple the general principle concerning effective, proportionate and dissuasive measures with a set of precise sanctions that are to be applied in specific cases, over which the Member States do not enjoy any discretion. More precisely, Article 16(3) of the ETS Directive envisages the liability rule and the related sanctions as follows:

any operator who does not surrender sufficient allowances by 30 April of each year to cover its emissions during the preceding year shall be held liable for the payment of an excess emissions penalty. The excess emissions penalty shall be EUR 100 for each tonne of carbon dioxide equivalent emitted by that installation for which the operator has not surrendered allowances.

It is worth noting that, since the ETS Directive is based on measurement mechanisms concerning allowances that are verified by independent persons, sanctions are applied only in the case of omitted communication of allowances and not where the communication is incorrect. Otherwise, this would amount to a violation of the principle of proportionality of sanctions. Member States, however, remain free to establish stricter domestic regimes and, therefore, to sanction operators for submitting erroneous communications; these sanctions established directly by Member States shall comply with the general principles of effectiveness, proportionality and dissuasiveness.[3]

The sanctioning obligations set out by EU law in the case of infringement of the relevant environmental provisions is generally based on a regime of strict liability: given the need to protect the environment as such and, to this end, to establish standards and rules that must be applied in order to achieve the environmental goals set out by the EU legislator, quite rightly the Court has stated that, unless the specific EU provisions establish that the infringement must be of fraudulent nature, the offender’s intention to harm the environment is irrelevant.

  • [1] Whereas non-compliance can immediately be sanctioned under the infringement procedures referred to in previous paragraphs 3 and 4. 2 See supra note 30. 3 5,OJ 2006, L 328/14. A consolidated version of this Directive, which has been repeatedly amended, was published on 6 March 2014. 4 5SOJ 2006, L 190/1. A consolidated version of this Regulation, which has been repeatedly amended, was published on 1 January 2018. 5 OJ 2006, L 396/1. A consolidated version of the REACH Regulation was published on 2 July 2019. The quotations in the text are drawn from Article 1 of the REACH Regulation. The REACH system works through ‘the promotion of alternative methods for assessment of hazards of substances’, as well as at establishing ‘the principle that it is for manufacturers, importers and downstream users to ensure that they manufacture, place on the market or use such substances that do not adversely affect human health or the environment’. 6 “OJ 2013, L 178/66. 7 C-487/14, SC Total Waste Recycling SRL, ECLI:EU:C:2015:780, para. 55.
  • [2] QJ 2016, L 132/58. 2 M Stating that 'The penalties specified under the law of a Party pursuant to the present article shall be adequate in severity to discourage violations of the present Convention and shall be equally severe irrespective of where the violations occur’. The text of the MARPOL Convention can be found at (copies)/MARPOL.pdf. 3 OJ 2010, L 295/23. 4 See supra note 30.
  • [3] “C-148/14 Germany v Nordzucker, ECLI:EU:C:2015:287, paras 42-45. 2 C-69/15, Nutrivet, ECLI:EU:C:2016:425, paras 42 ff. The case refers to exports of waste, but the principles stated in the judgement can certainly be extended to other areas of environmental law. On the other hand, this is fully consistent with the classical contents on environmental rules, whose rationale is invariably that of modifying human behaviours that were, in the past, considered legitimate in order to change past behavioural patterns into (more) sustainable ones (see, for more general reflections on this topic, F. Munari, L. Schiano di Pepe, supra note 2, 52 ff.
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