New Review Powers over EU Climate Rules Uncertain Until Tested

State aid needs to be added to regulation, says ClientEarth; Details of ‘Fit for 55’ proposals could be subject to challenge.

The newly revised Aarhus Regulation will make it easier for NGOs and civilians to challenge EU decisions which break environmental laws, according to Anne Friel, Environmental Democracy Lead for environmental law charity ClientEarth, but its reach will remain unclear until tested in practice.

The European Parliament and the EU Member States reached a provisional political agreement on amending the Aarhus Regulation on Monday, widening the scope of administrative proposals – or non-legislative acts – that can be challenged and the groups who may challenge them.

Before the new deal was struck, NGOs could call on the Aarhus Regulation to challenge EU decisions, but only for matters concerning individual companies, according to ClientEarth. Now both NGOs and citizens may request a review of decisions by EU institutions if they believe they are breaking environmental laws.

The changes will be finalised during the Meeting of the Parties to the Aarhus Convention in October. But they should mean that NGOs and civilians can use the Aarhus Regulation to challenge non-legislative acts such as the Taxonomy Regulation’s delegated acts on the basis of non-compliance with climate targets already set into law.

There will be a positive “indirect impact” on European corporates,” said Friel, as the revised regulation would serve as “another check on what is lawful and for EU institutions to be held accountable when making sure that all businesses have to comply with the same rules and that all businesses are absorbing the costs of environmental protection.”

The revision was first proposed by the European Commission in October 2020 as part of the European Green Deal to improve NGO and citizen access to the EU’s administrative and judicial reviews.

By widening the scope of the Aarhus Regulation, the EU is better aligned with the Aarhus Convention, which requires that citizens and civil society organisations are allowed access to information, public participation in decision-making and access to justice in environmental matters.

In line with the Convention, Friel said the revised regulation should improve transparency over decision-making by EU institutions. “It’s very difficult to challenge them [on EU acts] when you don’t know what evidence has prompted the decision. Increased transparency is urgently needed to help NGOs and individuals hold EU institutions to account,” she explained.

The Aarhus Regulation isn’t restricted to environmental administrative acts, Friel noted.

“We can now request review of most non-legislative measures. It could be a decision that’s purely about the internal market, but an unintended consequence is that it breaks an environmental law. It’s a useful way of ensuring that the EU is mainstreaming environmental protection through all of its policies,” she said.

Future court battles

The EU has been rolling out a slew of environmental proposals which could be subject to challenge, both through its updated Sustainable Finance Strategy and its Fit for 55 package.

“We are concerned by the varying levels of coherence of all the different measures that are coming out of the EU, including those under the Green Deal,” Friel said.

Fit for 55 aims to ensure the EU’s climate, land use, transport, energy and taxation policies align with a 55% reduction in carbon emissions by 2030 compared to 1990 levels.

Fuel taxes under the Energy Taxation Directive (ETD) for sectors like fisheries in EU waters are being kept to a “bare minimum”, despite the fact the sector’s carbon footprint is “much higher than previously thought”, the law firm said. As such, it said the suggested measures are “clearly insufficient” if the EU wants to reach its climate goals.

ClientEarth has also criticised the Commission’s failure to follow due process when redrafting the Renewable Energy Directive (RED), as the directive’s impact assessment and opinions of the Regulatory Scrutiny Board were not published, despite this being a legal obligation. The Regulatory Scrutiny Board supports the Commission by conducting impact assessments and evaluations during the early stages of the legislative process.

Although the majority of the package’s measures will be enacted via legislative acts, elements will still have to be implemented through Commission-led delegated acts, which can be challenged under the Aarhus Regulation if not fully in compliance with environmental law.

“When we request a review under the Aarhus Regulation, we have to show that the institution has acted unlawfully. It’s possible that in some circumstances such inconsistency could amount to a breach of the law, but probably not in every situation. It would depend on all of the circumstances and the applicable laws in a specific case,” said Friel.

Separately, the Common Agricultural Policy, the latest version of which was adopted last month, “seems a bit like business as usual”, said Friel, adding that the CAP doesn’t align with the goals of the Green Deal and is keeping in place a system that is “fundamentally not very good for the environment or for the climate”.

NGOs and individuals still cannot challenge EU State aid decisions under the Aarhus Regulation.

State aid refers to plans for major national subsidies being passed to the Commission for approval. Due to State aid not being included in the regulation, civil society cannot challenge the EU over decisions to provide public financial support for environmentally damaging activities, thus undermining progress towards fulfilling climate objectives.

“The EU must stop subsidising economic activities that contribute most to the climate and biodiversity crises we are facing. Allowing the public to challenge State aid authorisations that break environmental law is vital to this fight,” Friel said.

The Commission has since said it will look into the matter and bring forward measures to address this by the end of 2023, if deemed appropriate.

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