Cities as the new environmental watchdog in the EU?

In a long-awaited judgement, the CJEU held on 13 December that cities have standing to challenge acts of the Commission that affect their regulatory powers, thus allowing Brussels, Paris and Madrid to (successfully) challenge the Commission’s watering down of the Euro 6 emissions standard.

Background

Paris, Brussels and Madrid launched a challenge of Commission Regulation 2016/646 regarding emissions from light passenger and commercial vehicles (the Regulation). This Regulation had, on the one hand, introduced real driving emissions test (“RDE tests”) to prevent cheating as during the dieselgate scandal but, on the other hand, watered down applicable emission limits (“Euro 6 standard”) for a transitional period (the so-called “conformity factor”).

Due to the fact that Article 263 TFEU does not recognize cities as “privileged applicants”, as opposed to the Member States and the EU institutions, the cities had to convince the court that they were “directly concerned” by the Regulation. The cities, in particular, alleged that the Regulation limited their powers to regulate the air quality in their cities by restricting the circulation of cars which would comply with the conformity factor but not with Euro 6. This was a particularly important point to them as Spain and France were facing infringement actions by the Commission for persistently exceeding applicable limits of nitrogen dioxide and particulate matter.

The judgement

The Court firstly confirmed that the contested Regulation was not a legislative act and was a measure of general scope. It also did not require implementing measures to affect the cities’ position, thus making it generally subject to review under Article 263 TFEU.

The Court then had to analyse whether the legal situation of the cities was impacted by the contested provision to decide whether they were “directly concerned” for the purpose of Article 263 TFEU to have legal standing. To that end, it relied on case law establishing that a state entity is directly concerned where it is prevented from exercising its powers as it sees fit. Based on this doctrine, it focused its analysis on Article 4(3) of Directive 2007/46, which states that Member States shall not restrict or impede the circulation on the road of vehicles that comply with the Euro 6 Standard on the basis that they exceed emission limits. The Court held that this provision prevented cities from banning cars that meet the ‘relaxed’ Euro 6 standard under the contested Regulation but not the stricter emission limit that would apply in absence of the conformity factor. It also held that this provision is “directly effective”, meaning that car owners could have challenged such a ban in national courts.

Therefore, the Court considered that the cities are restricted in their regulatory powers and directly concerned by the Regulation. They were therefore allowed to ask for the annulment of the contested provision.

The General Court then decided in favour of the cities, specifically it:

• Annulled the provision setting the oxides of nitrogen emission limits as the Commission had no power to amend those limits;
• Gave 12 months to the Commission to amend the legislation accordingly;
• Considered that the damage to the image and legitimacy allegedly suffered by the city of Paris was not proven to be awarded the nominal 1€ damage and that, in any event, the annulment of the provision would sufficiently compensate the damage.

Comment

The judgement is a landmark decision as regards access to justice for cities of the EU because it clarifies that cities have standing to challenge EU acts that prevent them from exercising their regulatory powers. While this doctrine existed before, it had only been applied to individual decisions of sub-state entities under a predefined legal framework, such as state aid rules. This finding is arguably even more significant because the Court considered it sufficient that the cities were prevented from adopting one specific decision; it was not necessary that they were generally prevented from regulating on an issue.

This finding should arguably aid Brussels in its pending case against the Commission decision to authorize glyphosate and could also serve as a blueprint for similar, future challenges against EU measures that harm the environment. In light of the ongoing lack of access to justice for EU citizens and NGOs, it may allow cities to become a new champion for environmental protection where the Commission and national governments in the Council fail to impose sufficiently stringent EU measures. The fact that the cities’ arguments on substance were successful can also be seen as a further indication that access to justice rights are important to improve EU decision-making.

The Court confirmed that cities were in any event free to ban cars that did not meet the Euro 6 standard, introduce general bans (such as car-free days) or regulate based on other objective factors than emissions. The Court also cited without any opposition to the planned complete ban by Paris of all diesel vehicles by 2024. This can be interpreted as an implicit recognition of the right to ban diesel cars up to the Euro 5 standard or also all diesel cars in order to meet the air quality limits set by the Air Quality Directive. This is an important point given the pending EU infringement cases and national challenges based on poor air quality in cities of the UK, Germany, Hungary, Slovakia and the Czech Republic, to name but a few.