On 26 September 2024, Advocate General Collins delivered his Opinion to the European Court of Justice in the Interzero case (Case C‑254/23). If followed by the Court of Justice, the Opinion not only heralds an important development for the future of Extended Producer Responsibility (EPR) obligations in Slovenia, but also has the potential to revolutionise the way sustainability initiatives are approached across the whole of the EU.
The case concerns the adoption by the Republic of Slovenia inMarch 2022 of a new Law on Environmental Protection, with the aim of putting an end to the country’s consistently low recycling rates that were the result of years of unsatisfactory and ineffective performance of waste management tasks by competing commercial undertakings. The new law abolished the old system in favour of a model that confers responsibility for the fulfilment of EPR obligations for specific categories of consumer products upon a single organisation, operating on a not-for-profit basis and specially authorised by the competent public authorities for that purpose.
The Slovene Constitutional Court referred several questions to the Court of Justice, asking it to rule on the compatibility of the new EPR model with the EU rules on services of general economic interest (SGEI), the internal market and certain provisions of EU secondary legislation. The most pertinent and politically charged question the Court of Justice will have to answer concerns the ability of Member States to designate EPR fulfilment obligations as SGEIs with the consequence of limiting competition, to the extent necessary for the services’ performance. The answer to this question will have an impact that goes beyond the treatment of EPR obligations and may provide an opportunity for other environmental protection services to be designated as SGEIs, thereby reducing the ability to challenge providers using EU competition law.
The AG’s Opinion does a good job at recognising the overriding policy objectives at play in the waste management sector. According to the AG, an organisation that is made responsible for the collective fulfilment of EPR obligations may be an undertaking entrusted with an SGEI “where there is a legitimate public interest, such as the protection of the environment or of public health, that market forces have failed to meet adequately; the national authorities have clearly entrusted it with a public service mission by way of acts that contain adequate reasons for their adoption and it is shown to be engaged in economic activity”. That such an organisation operates on a not-for-profit basis and is vested with an exclusive right would not pose an issue, so long as these measures are introduced with a view to ensuring an adequate level of protection of the environment and of public health, and are proportionate.
On a broader scale, the AG’s Opinion emphasises the crucial role SGEI rules may come to play in the sustainability debate. SGEIs have not been given nearly enough consideration in the ongoing discourse on the role of competition law in driving sustainability. If followed by the Court of Justice, the approach set out in the Opinion would fundamentally change the approach to sustainability initiatives across the EU, making it clear that services which genuinely serve the objective of environmental protection are so crucial for society that they are justified in being reserved as SGEIs, subject to certain conditions.
The next and final step will be for the Court of Justice to pronounce its judgment, which usually happens five to eight months after the opinion. Precise timing will depend on the complexity of the case and holidays.
It is important to remember that the AG is an advisor to the judges of the Court of Justice and assists them by writing an impartial and independent opinion which the judges take into consideration before ruling on a case. An AG’s opinion is therefore not binding on the judges, although it is very influential and is usually (but by no means always) followed by the court. Whether they will do so in this case remains to be seen.
The full Advocate General Opinion is available here.