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Environmental liability - Directive

09 March 2010
by Ina Dimireva -- last modified 12 March 2010

The first EC legislation whose main objectives include the application of the "polluter pays" principle, this Directive establishes a common framework for liability with a view to preventing and remedying damage to animals, plants, natural habitats and water resources, and damage affecting the land. The liability scheme applies to certain specified occupational activities and to other activities in cases where the operator is at fault or negligent. The public authorities are also responsible for ensuring that the operators responsible take or finance the necessary preventive or remedial measures themselves.



Directive 2004/35/EC of the European Parliament and of the Council of 21 April 2004 on environmental liability with regard to the prevention and remedying of environmental damage.


The Directive establishes a framework for environmental liability based on the "polluter pays" principle, with a view to preventing and remedying environmental damage.

Scope and liability scheme

Under the terms of the Directive, environmental damage is defined as:

  • direct or indirect damage to the aquatic environment covered by Community water management legislation;
  • direct or indirect damage to species and natural habitats protected at Community level by the 1979 "Birds" Directive or by the 1992 "Habitats" Directive;
  • direct or indirect contamination of the land which creates a significant risk to human health.

The principle of liability applies to environmental damage and imminent threat of damage resulting from occupational activities, where it is possible to establish a causal link between the damage and the activity in question.

The Directive therefore distinguishes between two complementary situations, each one governed by a different liability scheme: occupational activities specifically mentioned in the Directive and other occupational activities.

The first liability scheme applies to the dangerous or potentially dangerous occupational activities listed in Annex III to the Directive. These are mainly agricultural or industrial activities requiring a licence under the Directive on integrated pollution prevention and control, activities which discharge heavy metals into water or the air, installations producing dangerous chemical substances, waste management activities (including landfills and incinerators) and activities concerning genetically modified organisms and micro-organisms. Under this first scheme, the operator may be held responsible even if he is not at fault.

The second liability scheme applies to all occupational activities other than those listed in Annex III to the Directive, but only where there is damage, or imminent threat of damage, to species or natural habitats protected by Community legislation. In this case, the operator will be held liable only if he is at fault or negligent.

The Directive provides for a certain number of exemptions from environmental liability. The liability scheme does not apply in the case of damage or imminent damage resulting from armed conflict, natural disaster, activities covered by the Treaty establishing the European Atomic Energy Community, national defence or international security activities or activities covered by the international conventions listed in Annex IV.

Preventing and remedying environmental damage

Where there is an imminent threat of environmental damage, the competent authority designated by each Member State will require the operator (the potential polluter) to take the necessary preventive measures, or will take such measures itself and recover the costs incurred at a later date.

Where environmental damage has occurred, the competent authority will require the operator concerned to take the necessary restorative measures (determined on the basis of the rules and principles set out in Annex II to the Directive), or will take such measures itself and recover the costs incurred at a later date. Where several instances of environmental damage have occurred, the competent authority may determine the order of priority according to which they must be remedied.

Environmental damage may be remedied in different ways depending on the type of damage:

  • for damage affecting the land, the Directive requires that the land concerned be decontaminated until there is no longer any serious risk of negative impact on human health;
  • for damage affecting water or protected species and natural habitats, the Directive is aimed at restoring the environment to how it was before it was damaged. For this purpose, the damaged natural resources or impaired services must be restored or replaced by identical, similar or equivalent natural resources or services either at the site of the incident or, if necessary, at an alternative site.

In Annex II to the Directive there is further information on the method that has to be taken into account in order to remedy environmental damage.

Costs of preventing and remedying damage

If the competent authority has carried out preventive and remedial actions itself, the authority may recover the costs it has borne from the operator responsible for the damage or imminent threat of damage. The same principle applies to environmental assessments carried out to determine the extent of damage and the action to be taken to repair it. The competent authority must initiate cost recovery proceedings within five years of the date on which the remediation and repair measures have been completed or the date on which the liable operator, or third party, has been identified, whichever is the later.

If several operators are jointly responsible for damage, they must bear the costs of repair either jointly and severally or on a proportional basis.

The Directive does not oblige operators to take out a financial security, such as insurance, to cover their potential insolvency. However, Member States are required to encourage operators to make use of such mechanisms and must promote the development of such services.

Request for action

Natural or legal persons who may be adversely affected by environmental damage and environment protection organisations may, subject to certain conditions, ask the competent authorities to act when faced with damage. Persons and organisations requesting action may bring legal action before a court or an ad hoc body for review of the lawfulness of the decisions and actions of the competent authority, or of its failure to act.

Cooperation between Member States

Where damage or a threat of damage may affect more than one Member State, the Member States concerned must cooperate on the preventive or remedial action to be taken.


Member States must report to the Commission on the application of the Directive by 30 April 2013 at the latest. The Commission will present a report to the Parliament and the Council based on the national reports together with appropriate proposals, if necessary, by 30 April 2014 at the latest. Furthermore, the Commission must publish, by 30 April 2010, a report on the effectiveness of the terms of actual remediation of environmental damage, on availability at reasonable costs and on the terms of insurance and other types of financial security for the activities covered by Annex III.


The principle according to which the polluter pays when environmental damage occurs (the "polluter pays" principle) is already set out in the Treaty establishing the European Community. As it helps to deter breaches of environmental standards, it contributes to the achievement of objectives and the application of Community policy in this area.

The purpose of the White Paper on environmental liability, published in February 2000, was to examine how the polluter pays principle could be applied with a view to implementing Community environment policy. The conclusion was that a Directive would be the best way to establish a Community environmental liability scheme. This Directive is the result of discussions held after publication of the White Paper, when a public consultation was carried out.


Directive 2004/35/EC [adoption codecision COD/2002/0021]
Entry into force: 30.4.2004
Deadline for transposition in the Member States: 30.4.2007
Official Journal: OJ L 143 of 30.4.2004

Amending act:
Directive 2006/21/EC
Entry into force: 1.5.2006
Deadline for transposition in the Member States: 1.5.2008
Official Journal: OJ L 102 of 11.4.2006