CJEC, February 7, 1985, No 240-83

THE COURT OF JUSTICE OF THE EUROPEAN COMMUNITIES

1. By judgment of 23 March 1983, which was received at the Court on 24 October 1983, the Tribunal de Grande Instance (regional court), Créteil, referred to the Court for a preliminary ruling under Article 177 of the EEC treaty two questions on the interpretation and validity of Council Directive No 75-439-EEC of 16 June 1975 on the disposal of waste oils (Official Journal 1975 l 194, p. 23), in order to ascertain whether French Decree No 79-981 of 21 November 1979 laying down rules for the recovery of waste oil (Journal Officiel de la République Française of 23 November 1979, p. 2900) and its implementing orders were compatible with Community legislation inasmuch as they contained provisions prohibiting the use of such oils as fuel.

2. On the basis of those French provisions the Procureur de la République (Public Prosecutor) applied to the Tribunal de Grande Instance, Créteil, for the dissolution of the association de Défense des bruleurs d 'huiles usagées (association for the defence of the interests of burners of waste oils, hereinafter referred to as 'the association'), on the ground that its aim and objects were unlawful. The association's object is to defend the interests of manufacturers, dealers and users of stoves and heating appliances which burn both fuel oil and waste oil, such burning being prohibited by the French legislation.

3. Articles 2 to 4 of Directive No 75-439-EEC requires Member States to take the necessary measures to ensure the safe collection and disposal of waste oils, preferably by recycling. Article 5 of the Directive provides as follows: ' where the aims defined in Articles 2, 3 and 4 cannot otherwise be achieved, Member States shall take the necessary measures to ensure that one or more undertakings carry out the collection and/or disposal of the products offered to them by the holders, where appropriate in the zone assigned to them by the competent authorities. 'Article 6 (1) thereof further provides that ' any undertaking which disposes of waste oils must obtain a permit'. In addition, Articles 13 and 14 provide that an indemnity, financed in accordance with the ' polluter pays ' principle and not exceeding the actual yearly costs, may be granted to undertakings collecting and/or disposing of waste oils, as compensation for the obligations imposed on them under Article 5.

4. In pursuance of the Directive, on 21 November 1979 the French Government adopted Decree No 79-981 laying down rules for the recovery of waste oils, together with the two above-mentioned implementing orders of the same date. Under those provisions French territory was divided into zones and a system was established for the approval both of waste-oil collectors and of the undertakings responsible for disposing of waste oils. Under Article 3 of Decree No 79-981, holders of waste oils must either deliver them to collectors approved pursuant to Article 4 thereof, or make them directly available to a disposal undertaking which has obtained the approval required by Article 8, or else perform the disposal themselves if they have been granted such an approval. Article 6 of the Decree requires collectors to surrender the oils collected to approved disposal undertakings. Article 7 lays down that ' the only permitted methods for disposing of waste oils... Are recycling or regeneration under economically acceptable conditions, or else industrial use as fuel'. With respect to such industrial use, the second paragraph of Article 2 of the implementing order on the conditions for the disposal of waste oils provides that disposal by burning must take place ' in a plant which has been approved for the purposes of environmental protection'.

5. Since the legislation in question was adopted pursuant to Directive No 75-439, the association raised before the national court the question whether that Directive could constitute a legal basis for the prohibition of the burning of waste oils. Furthermore, doubts were expressed as to the validity of the Directive in the light of certain fundamental principles of Community law.

6. In those circumstances, the Tribunal de Grande Instance, Créteil, stayed the proceedings and submitted to the Court a request for a preliminary ruling on the interpretation and validity of Directive No 75-439-EEC, in the following terms:

' Is the Directive in conformity with the principles of freedom of trade, free movement of goods and freedom of competition, established by the treaty of Rome, in view of the fact that Articles 5 and 6 of the Directive empower the administrative authorities of the States to draw up zones which are assigned to one or more undertakings approved by those authorities and charged by them with the collection and the disposal of waste, and the fact that Articles 13 and 14 authorize the granting of subsidies?

In addition, does the Directive provide legal grounds justifying the prohibition of the burning of waste oils?

' Validity of the Directive

7. The wording of the first question raises doubts as to the validity of the Directive as a whole but the reason for those doubts relate more particularly to the provisions which envisage the possibility of exclusive zones being assigned to waste-oil collectors, the prior approval of undertakings responsible for disposal and the possibility of indemnities being granted to undertakings which collect and dispose of waste oils.

8. In those circumstances it is appropriate to consider, first, the provisions of the Directive relating to the system for the assignment of zones (Article 5) and for the prior issuing of permits to disposal undertakings (Article 6) and, secondly, the system for granting indemnities (Articles 13 and 14).

Articles 5 and 6 of the Directive

9. The national court asks whether the system of permits is compatible with the principles of free trade, free movement of goods and freedom of competition, but does not elaborate further. In that connection it should be borne in mind that the principles of free movement of goods and freedom of competition, together with freedom of trade as a fundamental right, are general principles of Community law of which the Court ensures observance. The above-mentioned provisions of the Directive should therefore be reviewed in the light of those principles.

10. As to whether the system of granting approvals by zones for the collection of waste oils is consistent with the principle of free movement of goods, the Commission and the Council, and also the Italian Government, emphasize in their observations that, in the first place, Article 5 of the Directive permits the creation of zones only in exceptional circumstances, in particular in cases where No other, less restrictive, system seems to be feasible. They go on to argue that, in conformity with the treaty, the Directive as a whole does not obstruct the free movement of waste oils.

11. Whilst conceding that a system of approvals is bound to have a restrictive effect on freedom of trade, the Council and the Commission argue that the measure envisaged by Article 6 of the Directive pursues an aim which is of general interest, by seeking to ensure that the disposal of waste oils is carried out in a way which avoids harm to the environment.

12. In the first place it should be observed that the principle of freedom of trade is not to be viewed in absolute terms but is subject to certain limits justified by the objectives of general interest pursued by the Community provided that the rights in question are not substantively impaired.

13. There is No reason to conclude that the Directive has exceeded those limits. The Directive must be seen in the perspective of environmental protection, which is one of the Community's essential objectives. It is evident, particularly from the third and seventh recitals in the preamble to the Directive, that any legislation dealing with the disposal of waste oils must be designed to protect the environment from the harmful effects caused by the discharge, deposit or treatment of such products. It is also evident from the provisions of the Directive as a whole that care has been taken to ensure that the principles of proportionality and non-discrimination will be observed if certain restrictions should prove necessary. In particular, Article 5 of the Directive permits the creation of a system of zoning ' where the aims defined in Articles 2, 3 and 4 cannot otherwise be achieved '.

14. In the second place, as far as the free movement of goods is concerned, it should be stressed that the Directive must be construed in the light of the seventh recital in the preamble thereto, which States that the treatment of waste oils must not create barriers to intra-Community trade. As the Court has already ruled in its judgment of 10 March 1983 (Case 172-82, fabricants raffineurs d'huile de graissage v inter-huiles, (1983) ECR 555) dealing with the same zoning scheme, an exclusive right of that kind does not automatically authorize the Governments of the Member States to establish barriers to experts. Indeed, such a partitioning of the markets is not provided for in the Council Directive and would be contrary to the objectives laid down therein.

15. It follows from the foregoing that the measures prescribed by the Directive do not create barriers to intra-Community trade, and that in so far as such measures, in particular the requirement that permits must be obtained in advance, have a restrictive effect on the freedom of trade and of competition, they must nevertheless neither be discriminatory nor go beyond the inevitable restrictions which are justified by the pursuit of the objective of environmental protection, which is in the general interest. That being so, Articles 5 and 6 cannot be regarded as incompatible with the fundamental principles of Community law mentioned above.

Articles 13 and 14 of the Directive

16. The Articles in question provide for the possibility of undertakings being granted indemnities for the services which they perform in collecting and/or disposing of waste oils.

17. It is apparent from the request for a preliminary ruling that the question to be answered is whether those indemnities are consistent with the requirements of free competition, and in particular with Articles 92 to 94 of the treaty, which prohibit the granting of aid by Member States.

18. In that respect the Commission and the Council, in their observations, rightly argue that the indemnities do not constitute aid within the meaning of Articles 92 et seq of the EEC treaty, but rather consideration for the services performed by the collection or disposal undertakings.

19. It is also important to note that according to the second paragraph of Article 13 of the Directive ' the amount of these indemnities must be such as not to cause any significant distortion of competition or to give rise to artificial patterns of trade in the products. '

20. Articles 13 and 14 of the Directive cannot therefore be considered to be contrary to the principle of free competition.

21. In those circumstances, the reply to be given to the first part of the question is that consideration of Articles 5, 6, 13 and 14 of Council Directive No 75-439-EEC of 16 June 1975 has disclosed No factor of such a kind as to affect their validity.

Interpretation of the Directive

22. It is apparent from the request for a preliminary ruling and from the documents before the Court that the French legislation permits the burning of waste oils only in industrial installations, thereby prohibiting any other form of burning.

23. In the second part of the question the national court enquires whether Directive No 75-439, in implementation of which the French legislation was adopted, justifies the prohibition of the burning of waste oils.

24. The German, French and Italian Governments and the Commission advocate an affirmative reply. They argue that the uncontrolled burning of waste oils contributes significantly to air pollution and, consequently, that a prohibition of oil-burning in any plant which does not incorporate adequate safeguards is in conformity with the objectives of the Directive. The Italian Government adds that the disposal of waste oil by burning carried out by persons authorized for that purpose must be the subject of rules and inspections.

25. As has already been emphasized, the main aim of the Directive is the disposal of waste oil in a manner which is safe for the environment, and Article 2 makes it incumbent upon the Member States to pursue that aim.

26. Article 3 of the Directive provides that ' Member States shall take the necessary measures to ensure that, as far as possible, the disposal of waste oils is carried out by recycling (regeneration and/or combustion other than for destruction) ' and Article 4 provides that Member States must prohibit any deposit, discharge or processing of waste oils in such a way as to cause harmful effects on water, soil or air.

27. In order to ensure compliance with those measures, Article 6 provides that any undertaking which disposes of waste oils must obtain a permit granted by the competent national authority, if necessary after an inspection of the installations, with a view to imposing the conditions required by the state of technical development.

28. In addition to that prior inspection, subsequent checks are provided for by Articles 11 and 12, by virtue of which undertakings are required on the one hand to provide information concerning the disposal or deposit of waste oils or residues thereof, and, on the other, to be inspected periodically, particularly as regards their compliance with the conditions of their permits.

29. It follows from those provisions that the Directive requires Member States to prohibit any form of waste-oil disposal which has harmful effects on the environment. It is to that end that the Directive compels Member States to set up an effective system of prior approval and subsequent inspections.

30. The reply to be given to the second question must therefore be that the prohibition of the burning of waste oils in conditions other than those permitted under legislation such as the French legislation is not inconsistent with Directive No 75-439-EEC.

Costs

31. The costs incurred by the German, French and Italian Governments, and by the Commission and the Council of the European Communities, which have submitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main proceedings are concerned, in the nature of a step in the action pending before the national court, the Decision on costs is a matter for that court.

On those grounds,

THE COURT

In answer to the questions referred to it by the Tribunal de Grande Instance, Créteil, by a judgment of 23 March 1983, hereby rules as follows:

(1) Consideration of Articles 5, 6, 13 and 14 of Council Directive No 75-439-EEC of 16 June 1975 has disclosed No factor of such a kind as to affect their validity.

(2) The prohibition of the burning of waste oils in conditions other than those permitted under legislation such as the French legislation is not inconsistent with Directive No 75-439-EEC.