Press release: 22 November 2023

Legal action ends immunity for illegal Romanian coal plants – and prompts reform

• Romania reforms national pollution law after NGO legal action
• Several coal plants shut down following long-term illegal operations
• Lawyers say it is a ‘cautionary tale’ for the IED reform

In a landmark victory for environmental protection and governance, Greenpeace Romania and ClientEarth have won a four-year legal battle against illegal coal pollution in Romania, bringing to an end the country’s long-term breach of the EU’s Industrial Emissions Directive (IED).

The action took aim at the Romanian government’s piecemeal pollution law, which laid out totally inadequate penalties for coal plants operating either in breach of their environmental permit – or under no permit at all. Nearly half of the country’s coal plants were operating permit-free, a major breach of the IED – with no real consequences from authorities or national courts.

The organisations brought a formal complaint to the European Commission in 2019, which started an infringement proceeding against Romania in 2020. The Commission demanded the country bring its national legislation in line with the IED to effectively protect human health and safeguard the natural environment.

In response, Romania has now implemented substantial reforms. Its new Industrial Emissions Law boosts fines in many cases to over ten times their previous level. It also introduces the possibility of criminal penalties for operators running activities without a permit as well as mandatory suspensions for certain illegal operations. Over the course of the procedure, several of the targeted coal plants have closed – including Mintia and Turceni (units 3 and 7).

The new legal framework extends beyond the coal sector, encompassing the most damaging industrial activities across various sectors, including energy, waste management, metals, minerals, chemicals, and factory farming.

The Commission has now informed the organisations it considers the case to be closed.

Experts at ClientEarth and Greenpeace say it is a cautionary tale that shows why the IED reform must keep people’s health at its heart.

Alin Tănase, climate and energy campaigner for Greenpeace Romania, said: “Air pollution continues to have a negative impact on Romania and the industries that violate the legislation must be severely penalised and their activity suspended until they comply. These avenues are now possible thanks to our efforts to expose the situation in Romania, which contributed to changing the legislation that establishes and applies sanctions for industrial polluters.”

“Aligning the national Law on industrial emissions with the spirit of the European Directive is a step in the right direction, after so many years in which polluters got away with laughable fines,” commented Ioana Ciuta, president of Bankwatch Romania. “The government has committed to retire all of Romania’s coal power plants by 2030. Until then, they must work with the Government and environmental authorities to ensure that all remaining coal units run in compliance with the emissions legislation and best available technologies, and if not, that they are sanctioned.”

The news comes as EU decision-makers finalise the enforcement system of the updated IED. Today, Member State representatives will meet to discuss the final negotiations on penalty, suspension and compensation rules under the new IED - and the final political agreement is expected by next week.

ClientEarth lawyer Bellinda Bartolucci said: “The situation in Romania was unacceptable, with coal plants belching hazardous quantities of toxic pollutants into the air with near impunity. While not all examples are so flagrant, Romania is not alone in breaching industrial emissions law, leading to avoidable and inexcusable pollution across Europe. This is a cautionary tale for those working to update the IED.

“We don’t have the luxury of time to litigate for years when pollution laws are breached – our health and environment cannot wait. Right now EU lawmakers have the unique opportunity to set up an enforcement system that keeps illegal polluters in check across the bloc, and they must seize it.

“Effective rules on penalties and suspension, and compensation rights for victims in cases of illegal pollution, will not only ensure a level playing field for law-abiding industry, it will also finally put people’s health where it should be – at the very top of the agenda.”

ENDS

Notes to editors:

Background

Under the Industrial Emissions Directive (IED), national governments are required to adopt “effective, “proportionate” and “dissuasive” penalties for operators that fail to comply with the law.

But in Romania, the fines imposed on coal plant operators for breaking the law were too low to deter them from operating illegally. For example, for coal plant operators, whose annual turnover is typically between €86 and €400 million, the fine for not having a permit was capped at a one-off payment that ranges from €6,440 to €12,880. In addition, if the operator pays the fine within the first 15 days, the fine would be reduced to just €3,220. In some cases, fines for these multimillion-Euro earners were roughly equivalent to what a restaurant might receive for allowing indoor smoking.

Under the Industrial Emissions Directive, the national system must also provide for further enforcement measures, such as the suspension of an unlawful activity. However, in Romanian practice, this suspension was basically eliminated if the operator challenged the sanction in court. Coal plant operators were observed to take advantage of the courts to prolong the case over several years to ensure their activities were never suspended.

In contrast, the new penalties range in principle from ca. €10,000–100,000. In addition, the Romanian law foresees criminal fines as well as mandatory suspensions in particular when industrial installations are running without a permit. In such cases, it has also been clarified that suspensions will last throughout court proceedings.

Previous legal actions on coal in Romania

Greenpeace and ClientEarth had worked together on cases against polluting coal plants in the country for several years – like the case against Rovinari, one of Romania’s most polluting coal plants.

The organisations had also raised the alarm about misuse of State aid by coal incumbent Oltenia.

The European Commission initiated two infringement procedures:

• one on Romanian coal plants’ lack of environmental permits, based on a complaint by Bankwatch Romania
• Another one, following ClientEarth and Greenpeace’s intervention, on the enforcement system concerning industrial pollution (INFR(2020)4141)

The Commission sent a letter of formal notice on the latter to Romania in 2021. Romania’s introduction of the new law has averted the possibility of being referred to the European Court of Justice (CJEU) in this regard.

Revision of the EU Industrial Emissions Directive

The IED is the law to regulate environmental and health impacts from the EU’s largest industrial activities. Today, the >50,000 IED-governed installations are responsible for 50% of the EU’s total atmospheric emissions of sulphur oxides, heavy metals and other harmful substances, 40% of EU’s greenhouse gas emissions, and 20% of pollutant emissions by mass into air and the same into water. Industrial air pollution alone causes health and environmental damages worth €277-433 billion per year in the EU. (Source: EEB et al).

The IED is currently being revised at EU level and the final political negotiations of the new IED will likely take place end of November 2023. One of the core issues still under discussion is the final wording on stricter penalties (e.g. if fines should be based on the turnover of the company), suspensions and a new compensation right for individuals suffering health damages from unlawful pollution. Those enforcement provisions have the potential to put justice and health at the centre of the IED and ensure a level playing field for industry.

However, the current state of negotiations is deeply concerning, and adequate protection for justice and health is under attack, in particular from the Council – ignoring lessons learnt from cases just like this.

Contact:

Alin Tănase. Campaign Coordinator, Greenpeace Romania atanase@greenpeace.org, +40724210014

Ellen Baker, Global Communications Manager, ClientEarth ebaker@clientearth.org

Ioana Ciută, President, Bankwatch Romania, ioana.ciuta@bankwatch.org

About ClientEarth

ClientEarth is a non-profit organisation that uses the law to create systemic change that protects the Earth for – and with – its inhabitants. We are tackling climate change, protecting nature and stopping pollution, with partners and citizens around the globe. We hold industry and governments to account, and defend everyone’s right to a healthy world. From our offices in Europe, Asia and the USA we shape, implement and enforce the law, to build a future for our planet in which people and nature can thrive together.