Polluter pays principle at the ECJ: tracing the origin of toxic chemicals

The financial responsibility of the pharmaceutical and cosmetics industries for the expansion of sewage treatment plants could be declared unlawful by the European Court of Justice (ECJ). This was recommended last week by Attorney General Juliane Kokott, who considers the corresponding regulation in the Municipal Wastewater Directive (Karl) to be invalid. However, the final decision is made by the ECJ.

Sewage treatment plants usually have three stages of purification: mechanical, biological and chemical. Since 2024, the EU's municipal wastewater directive has also provided for a fourth purification stage. In the fourth stage of clarification, a wide variety of micropollutants that can harm plants, animals and people are to be removed from the water. The fourth treatment stage is to be introduced in all large sewage treatment plants that have a catchment area of ​​more than 150,000 people. In smaller systems, the fourth stage is only required in sensitive cases, for example if the system is in a drinking water production area. The directive must be implemented gradually until 2045.

What is particularly controversial is how the expansion of the sewage treatment plants should be financed. The costs across the EU are estimated at 1.2 billion euros. The EU directive Karl is actually clear: 80 percent of the costs should be borne by the pharmaceutical and cosmetics industry. According to figures from the EU Commission, these industries are responsible for 73 percent of trace substances in wastewater. When it comes to toxic contamination, the proportion of pharmaceutical and cosmetic residues is as high as 92 percent.

However, Poland has sued the ECJ against this producer responsibility. The pharmaceutical and cosmetics industry is unfairly used for financing to such a high degree. For example, the two industries are not responsible for pesticides, biocides and plastic additives, the importance of which is significantly greater than assumed by the EU committees. In its lawsuit, Poland invokes the EU's polluter pays principle, according to which the person who caused pollution should pay for its removal. To do this, the cause must be correctly determined.

The independent Attorney General Juliane Kokott, who is preparing the ECJ ruling, recommended in her opinion that the Polish lawsuit should be upheld. The EU committees made “obvious errors” when collecting and evaluating the scientific data. They found that “the share of the toxic load attributable to pharmaceuticals and cosmetics was not comprehensible due to a lack of sources”. In addition, substances for which there are many other uses were fully attributed to the cosmetics industry.

However, the Attorney General did not agree with all of Poland's objections. Poland also considered it disproportionate that generic drug manufacturers should be asked to pay. These could not replace environmentally harmful active ingredients because the generics would then no longer be identical to the original drug. Kokott found this lack of incentive to avoid harm “unsatisfactory”, but the inclusion of generic drug manufacturers was still covered by the EU legislature’s wide scope.

The ECJ had decided not to hold an oral hearing because it did not expect it to be of any use. Kokott now recommended that the judges hold an oral hearing to clarify the contradictions in the recording of the scientific data.

The EU judges often follow the opinion of the advocates general. However, they often deviate, especially in politically controversial proceedings.

In addition to the Polish lawsuit against producer responsibility in the Charles Reform, a submission from the Irish High Court is also pending at the ECJ, which deals with similar questions. In contrast, the lawsuits from 33 companies, including many from Germany, were rejected as inadmissible by the ECJ in February because the companies were not “individually” affected by the Karl amendment.

The financing of the fourth treatment stage of the sewage treatment plants is also still politically controversial. The European Parliament only called for a suspension of manufacturer responsibility and a comprehensive review in July. The Chemical Industry Association demands that “the general public” should pay for the fourth treatment stage in the form of wastewater fees.

The Federal Association of the Energy and Water Industry (BDEW) counters: “It is not appropriate for citizens, all other industries and small and medium-sized companies to bear the costs alone.” This contradicts the polluter pays principle and would slow down any steering effect.