Introduction
In a landmark ruling for environmental law and the interpretation of EU internal market rules, the European Court of Justice (ECJ) upheld the Opinion of Advocate General Collins in the INTERZERO case (C-254/23), where EUCLID LAW advised EXPRA on the case in support of the Slovenian State. Although the full judgment text is not yet available, the Court has issued the operative part, affirming the Advocate General’s conclusions delivered on 26 September 2024. The case centered on Slovenia’s extended producer responsibility (EPR) scheme, which requires producers to meet waste management obligations through single, not-for-profit collective organisations for each product category. The ECJ’s confirmation affirms a Member State’s ability to design such systems to achieve environmental objectives, within the framework of Services of General Economic Interest (SGEIs).
This summary provides an in-depth analysis of the ECJ’s confirmation and its wider implications, highlighting the Court’s affirmation of the compatibility of these national schemes with EU internal market law, the Services Directive, the Charter of Fundamental Rights, and the Waste Framework Directive.
1. Legal Context and National Dispute
Slovenia’s revised Environmental Protection Act introduced a compulsory, centralised system for fulfilling EPR obligations. Unlike the previous market-driven regime, the new system designates a single, not-for-profit entity per product category to manage waste. This change prompted legal challenges by waste management companies, including Interzero and Surovina, on grounds of EU law violations—primarily restrictions on the freedom of establishment, the freedom to provide services, and the right to conduct business.
The Ustavno sodišče (Constitutional Court of Slovenia) referred ten questions to the ECJ, seeking clarification on the lawfulness of Slovenia’s scheme under EU law.
2. ECJ Upholds Member State Discretion on SGEIs
The ECJ reaffirmed Member States’ wide discretion in defining and entrusting undertakings with the performance of SGEIs under Article 106(2) TFEU. It confirmed Advocate General Collin’s opinion:
- A national system addressing unmet public needs—especially concerning environmental protection—can qualify as an SGEI.
- The designation is valid if the market had failed to meet public needs adequately (a “market failure” test), the entrusted entity carries out a clear public service mission, and that mission is enshrined in law.
- Not-for-profit status – and a single operator regime – do not negate the economic nature of the activity, which still falls under the SGEI umbrella.
The ECJ concluded that Slovenia’s EPR regime meets the necessary conditions, emphasising that the presence of environmental and public health goals to justify state intervention.
3. Restrictions on Market Freedoms need to be Justified and Proportionate
One of the central legal issues was whether the Slovenian law unlawfully restricted freedoms guaranteed by Articles 49 (freedom of establishment) and 56 (freedom to provide services) TFEU. Advocate General Collins affirmed that while the EPR scheme did impose restrictions, these were justified by overriding reasons of public interest, particularly environmental protection, and were indeed proportionate:
- A centralised, not-for-profit model avoided the inefficiencies and monitoring difficulties noted in the previous competitive model.
- The risk of “cherry-picking” and insufficient waste treatment under the old regime underpinned the need for reform.
- Although less restrictive alternatives might exist in theory, it was up to national authorities to determine the most effective model, subject always to judicial review for manifest errors.
By confirming Advocate General Collins’ Opinion, the ECJ underscored that the protection of the environment is a core EU value that can justify constraints on internal market freedoms.
4. Compatibility with Services Directive and Charter Rights
The ECJ further found that the Services Directive (Directive 2006/123/EC) did not prohibit Member States from granting exclusive rights to entities providing SGEIs. Advocate General Collins found that the Directive applies only insofar as it does not obstruct the performance of assigned public tasks.
Additionally, Articles 16 and 17 of the Charter (freedom to conduct business and right to property) were found not to be violated, as these rights are not absolute and can be restricted by law to pursue objectives of general interest, such as environmental protection.
The ECJ confirmed that the law did not disproportionately interfere with these rights, given the existence of public interest goals and clear legal authorisations.
5. No Breach of Legal Certainty or Legitimate Expectations
The challengers had also argued that the abrupt transition from a liberalised market to a regulated single operator regime infringed their legitimate expectations and legal certainty. The ECJ rejected this claim, confirming Advocate General Collins conclusion that:
- Legislative changes are permissible without transitional periods or compensation, unless there are clear and specific assurances to the contrary;
- The new law was predictable, precise, and clearly formulated; and
- No EU principle requires compensation or a transition phase in such circumstances, especially when no binding promises were made.
This ruling sets a precedent confirming that policy changes aimed at furthering EU environmental objectives may lawfully override private commercial interests, provided procedural safeguards are in place.
Conclusion: A Landmark Case for EU Environmental and Internal Market Law
By confirming the Advocate General’s Opinion, the ECJ has reinforced the ability of Member States to pursue environmental policy goals through public service models—even when doing so restricts market competition. The full text of the judgment, when it becomes available, will clarify:
- The conditions under which SGEIs may be lawfully established;
- wow environmental goals can justify limitations on internal market freedoms; and
- that EU law does not guarantee unfettered access to profit-making opportunities in previously liberalised markets.
This decision provides legal certainty for national legislatures across the EU contemplating similar EPR reforms; and will likely influence future policy in waste management, circular economy, and climate strategy.
