European Court of Justice Imposes Stringent Environmental Assessment Requirements for Renewable Energy Projects

On June 25, 2020, the Court of Justice of the European Union ("ECJ") delivered a judgment (C24/19) clarifying that orders and circulars of EU Member States that regulate the installation and operation of wind turbines constitute "plans and programs" subject to environmental assessment under Directive 2001/42.

In this matter, neighbours of a site intended for wind turbines in Belgium challenged the development consent granted to the project by the authorities on the grounds that such consent had been based on conditions provided in an order and circular by the regional government, neither of which had been subject to an environmental assessment.

The ECJ stated that "plans and programs" are subject to environmental assessment under Directive 2001/42 when: (i) their adoption is regulated by national legislative or regulatory provisions; and (ii) they are likely to have significant environmental effects. The ECJ indicated that it could not narrowly interpret this provision as limited to plans and programs for which adoption is compulsory under applicable national law, but instead that the term "plans and programs" should be interpreted broadly to avoid a Member State circumventing the requirement for an environmental assessment by deliberately refraining from providing that the competent authorities are required to adopt such plans and programs.

The ECJ ruled that the order and circular challenged by the claimants contained "various provisions regarding the installation and operation of wind turbines, including measures on shadow flicker, safety and noise level standards" and therefore qualified as instruments subject to an environmental assessment. As a consequence, the ECJ considered that the consent based on the infringing order and circular should be annulled, regardless of whether the construction of the wind turbine project had started or not.

In order to limit the negative impacts of annulments on the development of renewable energy, the ECJ indicated that national jurisdictions facing similar cases could temporarily maintain national legal instruments infringing Directive 2001/42 in exceptional cases involving overriding considerations in the general interest if: (i) the annulment of the permit would likely have significant implications for the electricity supply of the whole of the Member State concerned; and (ii) the effects would only be maintained for the period of time strictly necessary to remedy the illegality.

A case-by-case assessment of national "plans and programs" applicable to renewable energy projects in each Member State will be necessary to identify whether such national regulations were submitted for environmental assessment as required by Directive 2001/42. If a large number of plans and programs were not submitted for environmental assessment and therefore need to be regularized, given the limited nature of the exception set forth by the ECJ, this decision is likely to hinder or at least slow down the development of renewable energy and potentially other projects designed to reduce greenhouse gas emissions.

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