Environment-related issues

Background

The Environmental Liability Directive (ELD) was adopted in 2004 and last amended in 2013. The overall objective of the ELD is to apply common, legally binding EU standards designed to reduce damage to natural resources. It sets out an environmental liability framework to prevent and remedy environmental damage to pre-damage condition when it is caused by economic operators.

One of the issues that has come up over the years in the discussion at European level is the availability (at reasonable costs) of insurance and other types of financial security, and the need or not for mandatory financial security.

The implementation checks of the Directive found that lack of data on ELD cases and on comparable incidents/accidents treated under national legislation, were the cause of the Directive’s limited effect in preventing and remedying environmental damage.

In February 2017, the European Commission published a Multi-Annual ELD Work Programme "Making the ELD more fit for purpose" for 2017-2020. This Work Programme consists of three main pillars:

  • Improving the evidence base for evaluation and decision-making for the Commission, Member States, stakeholders and practitioners (assessment framework and ELD registry),
  • Supporting the implementation through tools and measures for more even implementation (common understanding of terms and concepts, capacity building and training),
  • Ensuring sufficient availability of financial security, in particular for large losses or in case of insolvency (secure, sufficient and available instruments to cover ELD liabilities).

In the framework of the work programme the Commission requested law firm Stevens & Bolton to do a study (“Financial Security Study 2019”) and publish a report to fill the gap in knowledge for the Commission on voluntary and mandatory financial security for ELD liabilities, and to suggest ways in which such financial security could be improved both at an EU level and a Member State level.

In March 2019, BIPAR attended a European Commission stakeholder meeting and in summer and autumn 2019, BIPAR and its working party on environmental liability provided feedback for the draft study through questionnaires on the presence and functioning of environmental insurance policies at national level.

On 4 June 2020, the European Commission and the law firm published the final report on improving financial security in the context of the ELD.

The report states that it is premature to recommend harmonised mandatory financial security for ELD liabilities or an EU-wide fund.

The report however adds that effective implementation of the ELD cannot occur in the absence of insurance for liabilities under it.

Therefore, it recommends measures to increase availability and demand for ELD liabilities insurance, referring to an EU-wide training programme. The report refers to BIPAR and its members in this respect (as well as other European trade associations), to provide advice into such a training programme.

Next steps

BIPAR will continue to follow-up this file, in particular with regard to the above-mentioned future EU training programme.



- Published in June 2020 -

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