Press release: 22 March 2021

NGOs win right to take EU Commission to court over environment-harming subsidies

People and NGOs must be able to challenge EU State aid decisions before the European Court of Justice when the environment is at stake, an international justice body has ruled.

The decision, from the Aarhus Convention Compliance Committee (ACCC), comes after environmental organisations ÖKOBÜRO and Global 2000 wanted to challenge EU approval of subsidies to UK nuclear project Hinkley Point C, over the environmental threats they say are posed by nuclear power. However, 60-year-old case law would have blocked them from doing so.

The organisations then took a separate complaint to the ACCC to address this access to justice issue. Environmental law charity ClientEarth contributed with its observations.

Under EU State aid law, plans for major national subsidies are passed to the Commission for approval. Until now, the doors have been closed to civil society when it comes to challenging those approvals, despite public financial support frequently propping up activities which are clearly harmful for the environment and work directly against climate objectives.

Multimillion Euro State aid decisions that are currently under fire include Germany’s controversial coal compensation arrangements and various capacity market structures throughout the EU that favour incumbent fossil fuel players rather than agile, innovative market entrants.

Only market participants have been able to raise issues in court – and environmental protection is generally not their focus.

Priska Lueger, environmental lawyer at ÖKOBÜRO, said: “We could not accept that such decisions, which obviously have environmental consequences, cannot be challenged by members of the public. The Compliance Committee’s thorough and comprehensive deliberations now confirm the arguments raised in our communication and show that legislative change is required.”

ClientEarth State aid lawyer Juliette Delarue said: “Mammoth sums are granted by governments to often controversial projects all the time, using taxpayers’ money. While the EU’s procedure for vetting these proposed subsidies is robust, input from civil society is vital. The EU is supposed to be phasing out fossil fuel subsidies, for example, but is too often waving them through.

“Civil society must be able to challenge these decisions to prevent countries using taxpayers’ money to fund environmental damage and undermine the EU Green Deal.”

The EU’s key access to justice law, the Aarhus Regulation, is currently being reformed, as the current regulation leaves the EU in breach of international treaty the Aarhus Convention.

The ACCC, the arbiters of the Aarhus Convention, issued separate advice in February that confirms the EU’s proposed overhaul of the Aarhus Regulation would still leave it in breach of several other provisions of the treaty.

ClientEarth is calling on the EU Parliament and Council to make the necessary changes to ensure compliance – including putting State aid decisions onto the list of acts that can be challenged by NGOs and the public on environmental grounds.

ClientEarth environmental democracy lawyer Sebastian Bechtel said: “This landmark finding is a win for environmental justice and democracy. The public’s lack of ability to challenge State aid decisions on environmental grounds has long prevented civil society from effectively enforcing important EU laws. No one is infallible and the EU’s decisions must be subject to strict review if there is evidence that public money will be funnelled into projects that break environmental law.

“The EU is bound by its international law commitments and should respect these findings. NGOs need to be given standing to challenge State aid decisions that break environmental law in the refreshed Aarhus Regulation.”

The ACCC’s decision will not apply retrospectively, meaning that subsidies granted to Hinkley Point C are unaffected.


Notes to editors:

The Aarhus Convention Compliance Committee (ACCC) has found that the lack of a direct avenue for NGOs and the public to challenge EU Commission’s State aid decisions that breach EU environmental law is contrary to Articles 9(3) and (4) Aarhus Convention.

You can read the findings here.

The decision confirms that NGOs and the public should have standing (i.e. access to internal and judicial review) in State aid decisions that may breach EU environmental law. This could be, for example, when aid is authorised for a project that does not actually comply with its obligations; has not properly conducted an environmental impact assessment; has no valid permit; or emits beyond the legal limits.

You can find all submissions and the findings of the ACCC on this page, under Communication ACCC/C/2015/128.

Can citizens start challenging decisions now?

The findings need to be endorsed by all countries that have signed on to the Aarhus Convention, at the annual Meeting of the Parties, this coming October. Historically, none of the findings of the Compliance Committee have been rejected. The findings then become binding as a matter of international law.

However, given that the EU is currently amending its access to justice law, the Aarhus Regulation, the logical step would be to already implement these findings here. Otherwise, the EU will have to amend the Regulation again after October, once the findings become legally binding.

Revising the EU Aarhus Regulation

The Aarhus Regulation transposes the principles of the Aarhus Convention (an international treaty) into EU law. The European Commission tabled a proposal to revise the Regulation in October last year. This proposal is currently under debate in the European Parliament’s Environment Committee, with a vote scheduled for the week of 12 April.

ClientEarth’s joint statement with other NGOs – including environmental law network Justice and Environment – setting out our key asks for this revision is here. Making State aid decision subject to review is listed in Point 2 of the key demands included in this statement.

About ClientEarth

ClientEarth is a charity that uses the power of the law to protect people and the planet. We are international lawyers finding practical solutions for the world’s biggest environmental challenges. We are fighting climate change, protecting oceans and wildlife, making forest governance stronger, greening energy, making business more responsible and pushing for government transparency. We believe the law is a tool for positive change. From our offices in London, Brussels, Warsaw, Berlin and Beijing, we work on laws throughout their lifetime, from the earliest stages to implementation. And when those laws are broken, we go to court to enforce them.