SLS ANNUAL CONFERENCE 2004 SHEFFIELD SLS ENVIRONMENTAL LAW

SLS ANNUAL CONFERENCE 2004 SHEFFIELD

SLS ENVIRONMENTAL LAW SECTION

EUROPEAN COMPETITION AND ENVIRONMENTAL LAWS AT A CROSSROAD: AN ENVIRONMENTALLY FRIENDLY MEETING? Christian Dadomo University of the West of England, Bristol

THE BASIC ISSUE n Competition law as one of the cornerstones of the single market n n Derogations to its rules are applied restrictively n n Environmental protection (EP) also a major objective of the EU Art. 6: principle of integration of EP into other policies, including Competition EP: agreements, state aid, activities by body in a dominant position

ENVIRONMENTAL AGREEMENTS n n n Environmental agreements as a way to supplement regulatory measures The Communication of 1996: - recognised the potential benefits - lays down some guidelines to improve the efficacy of such agreements The Communication of 5 -06 -2002: - the Commission stresses the need to resort to self -regulation

n The Communication of 17 -07 -2002: - EA are popular: 312 in the EU by 1999 (OECD report) - lays down the assessment criteria of EA

ENVIRONMENTAL AGREEMENTS AND ARTICLE 81(1) n n 2001 Guidelines on the assessment of horizontal agreements Agreements that do not fall under Art. 81(1): - no precise obligation is placed upon the parties - setting environmental performance of products - creating a genuine new market

n Agreements that almost always fall under Article 81(1): - EA is a tool to engage in a disguised cartel n Agreements that may fall under Article 81(1): - appreciably restrict the parties’ ability to devise the characteristic of their products - parties allocate individual pollution quotas - an exclusive provider of collection and/or recycling services is appointed

ENVIRONMENTAL AGREEMENTS AND ARTICLE 81(3) Individual exemptions Ø Ø granted by the European Commission and national Competition authorities and courts under Regulation 1/2003 (arts. 5, 6 and 10) Block Exemptions Ø Ø Ø granted to categories of agreements, either vertical or horizontal made by the Council under Article 83 or by the Commission under delegated authority

CONDITIONS FOR EXEMPTION Two positive conditions Economic benefits - improving production or distribution of goods or - promoting technical or economic progress Fair share for consumers Two negative conditions No unnecessary restriction of competition No elimination of competition

The example of the CECED decision of 11 February 2000 n n The Commission approved an agreement to stop production Although the agreement restricted competition, it fulfilled conditions for exemption under Art. 81(3)

COMPETITION LAW AND THE RECYCLING SECTOR n The DSD case: - DSD is a company that runs a countrywide system for the collection and recycling of sales packaging in Germany - German Packaging Ordinance 1991: obligation to take back used sales packaging - DSD customers have to pay a fee to take part in the system - DSD created “the Green Dot” trademark - DSD uses local collecting companies with which it passed service agreements. - DSD notified those agreements to the Commission

n The Commission’s decision of 17 September 2001: - exemption is granted if the exclusivity clause runs until end of 2003 - this exemption is subject to two conditions: DSD may not prevent the joint use of collection facilities by competitors and DSD may not stop collectors from exploiting commercially their collected materials

n The Eco-Emballages case: - a similar system to DSD was established by Eco. Emballages in France - EE concluded various contracts with: *Pro-Europe for the use of the Green Dot logo *Producers that do not wish to organise waste disposal themselves *Local authorities and *take-back industrial firms - EE notified those contracts to the Commission for negative clearance

n The Commission’s decision of 15 June 2001: - negative clearance n Conditions to be met for a collection and recovery system to be approved: - freedom of choice - no unjustified exclusivity clause - unlimited access to collection facilities - free commercialisation of recovered raw materials

ENVIRONMENTAL PROTECTION AND STATE AIDS n n n Article 87 generally prohibits state aids It is for the Commission to assess them against competition Aids must be assessed in light of sustainable development and the polluter pays principle

THE GUIDELINES ON STATE AIDS FOR ENVIRONMENTAL PROTECTION OF 2003 n New guidelines needed n The Commission distinguishes between aids that help achieve a high level of environmental protection and those used to make up for the absence of cost internalisation

THE ENERGY SECTOR n n n New national environmental taxes: - aids but acceptable if limited in time Aids in favour of renewable sources of energy: - ok Economic instruments for the application of Kyoto: - too early to define conditions of authorisation

GENERAL CONCLUSIONS n n Clear policy to take account of environmental protection in competition policy However environmental protection may not be used to circumvent competition rules