Legal alert for onshore wind projects

1. Dutch environmental regulations for wind projects

1.1 The Dutch Activities Decree (Activiteitenbesluit) and the Activities Regulation (Activiteitenregeling) (together the “Wind Regulations”) contain several environmental regulations for the operation of wind projects in the Netherlands, including environmental norms on noise emissions, external safety, and cast shadow (slagschaduw). These environmental norms are widely used as a basis for spatial planning decisions and environmental permits granted for the development of new wind projects. 

1.2 During the decision-making process for the spatial planning decision, the competent authority typically uses the Wind Regulations to demonstrate that the project can be realised in accordance with spatial planning requirements. The spatial planning decision is usually based on an environmental impact assessment to substantiate that the wind project has been designed and can be operated in compliance with the environmental norms contained in the Wind Regulations. Many spatial planning decisions for Dutch wind projects are therefore based on these environmental norms. 

1.3 The Wind Regulations are also used as a basis for granting the environmental permit for larger onshore wind projects. These environmental permits are typically based on environmental studies to show that the project can be operated in compliance with environmental norms. Because the environmental norms contained in the Wind Regulations are directly applicable to the operation of a wind project, the environmental permit does often not contain specific permit requirements on noise emissions, external safety, and cast shadow, but simply refer to the directly applicable norms contained in the Wind Regulations. Accordingly, also environmental permits for larger onshore wind projects often rely on the applicability of the Wind Regulations.

2. The ruling of the Council of State

2.1 The Council of State has now delivered an important ruling on the validity of the environmental norms contained in the Wind Regulations (ECLI:NL:RVS:2021:1395). In a dispute concerning the validity of the spatial planning decision and the environmental permit for the development of a new wind project in Delfzijl, the Council of State ruled that these environmental norms have been adopted in violation of European law and can therefore not be used as a basis for both the spatial planning decision and the environmental permit.

2.2 The appeal was initiated by several applicants who relied on a recent ruling of the European Court of Justice (ECLI:EU:C:2020:503) to argue that the environmental norms contained in the Wind Regulations have been adopted in violation of the EU Strategic Environmental Assessment Directive (2001/42/EG) (the `SEA Directive`). The SEA Directive requires the adoption of a strategic environmental assessment for “projects or plans” as defined in the EU Directive. While the Council of State ruled in earlier case law that the generally applicable norms contained in the Wind Regulations do not qualify as a project or plan within the scope of the SEA Directive, the Council of State decided that the recent ruling of the European Court of Justice requires the court to overturn that line of jurisprudence and ruled that the Wind Regulations are indeed subject to the requirements contained in the SEA Directive. The Council of State therefore ruled that the Wind Regulations can only be adopted on the basis of a duly performed strategic environmental assessment. Because the Dutch government did not comply with this requirement when introducing the Wind Regulations, the Council of State decided that the Wind Regulations have been adopted in violation of the SEA Directive such that these environmental norms can therefore not be used as a basis for the spatial planning decision and the environmental permit. 

2.3 The Council of State nevertheless allowed the competent authority to remedy the defects in the spatial planning decision and the environmental permit. In relation to the spatial planning decision, the Council of State determined that the competent authority is not legally required to rely on the environmental norms contained in the Wind Regulations when adopting a spatial planning decision and can therefore also decide to set its own norms on noise, external safety and cast shadow in the spatial planning decision, provided that the norms are duly substantiated. In relation to the environmental permit, the Council of State determined that the environmental norms contained in the Wind Regulations cannot be directly applied as long as these are not supported by a duly performed strategy environmental assessment. Until that process has been completed by the Dutch government, the competent authority is allowed to determine and include project specific emission limits and other environmental norms for the operation of the wind project in the environmental permit. The court therefore allowed the competent authority to remedy the spatial planning decision and the environmental permit for the new wind project in Delfzijl.

3. Strategic environmental assessment

3.1 The ruling of the Council of State determines that the Wind Regulations can (at present) not be used as a basis for spatial planning decisions and environmental permits for the development of wind projects in the Netherlands. It is now up to the government to perform a strategic environmental assessment to substantiate the norms for noise emissions, external safety and cast shadow. Only then can the Wind Regulations (again) be used as a basis for new decision-making procedures. 

3.2 Please note that the performance of the strategic environmental assessment is, in our view, not an easy task, because the Wind Regulations are intended to be widely applicable to all (or at least most) wind projects in the Netherlands. The Dutch government indicated earlier this week that the process is likely to take approximately 1.5 – 2 years. Further, the performance of the strategic environmental assessment is, in our view, not merely a procedural matter, but requires the scientific substantiation of norms for noise emissions, external safety, and cast shadow. It cannot be ruled out that the strategic environmental assessment will ultimately conclude that the existing environmental norms have to be changed, for example, by adopting lower noise emission limits for wind turbines.

4. Consequences for new wind projects

4.1 We believe that the ruling of the Council of State will have significant consequences for the development of new wind projects in the Netherlands. We expect that new and ongoing decision-making procedures will suffer delay because the competent authority can (at present) no longer rely on the environmental norms included in the Wind Regulations. Competent authorities will either (i) have to wait for the Dutch government to complete the strategic environmental assessment or (ii) have to determine their own environmental norms on noise, external safety and cast shadow in the spatial planning decision. Both scenarios will require time to complete extensive environmental studies.

4.2 The ruling of the Council of State will also affect new wind projects that have obtained a spatial planning decision or an environmental permit which is not yet irrevocable. Since these decisions are likely to be based on the Wind Regulations, it is likely that the administrative courts will not uphold those decisions. Similar to the approach taken by the Council of State in the case concerning Windpark Delfzijl, the court may then order the competent authority to remedy the spatial planning decision and the environmental permit by determining its own environmental norms on noise, external safety and cast shadow. 

4.3 Consequently, we believe that new wind projects that are currently not in possession of an irrevocable spatial planning decision or an irrevocable environmental permit are at risk of substantial delay. Furthermore, because the future norms that will be included in the Wind Regulations (once the government has completed the strategic environmental assessment), or any future norms that will be adopted by the competent authority in the spatial planning decision (also on the basis of substantial environmental studies), could be different from (and perhaps more stringent as compared to) the existing norms on noise, external safety and cast shadow, there is also a risk (in a worst case scenario) that the design or lay-out of the wind project will have to be changed, or that additional standstill procedures will have to be adopted, to comply with the new environmental norms. 

5. Consequences for existing wind projects

5.1 The ruling of the Council of State does not directly affect the validity of irrevocable spatial planning decisions and irrevocable environmental permits for existing wind projects. The Dutch government noted in its initial response that the ruling does not automatically invalidate these decisions for existing wind projects by application of law. While that is indeed the case, we believe that the ruling of the Council of State is likely to trigger new demands from local stakeholders or environmental pressure groups for the amendment or revocation of irrevocable environmental permits for existing wind projects. Operators of existing wind projects could therefore be confronted with new legal proceedings.

5.2 While the outcome of any such legal procedure must be determined on a case-to-case basis, we note that the administrative courts are in principle, for reasons of legal certainty, reluctant to allow claims for the revocation of permits. At the same time, we do recognise that the environmental permits and the directly applicable Wind Regulations are based on environmental norms that are now considered to have been adopted in violation of EU law. Therefore, while a full revocation of an environmental permit would always be a measure of last resort, it is not inconceivable that there will be cases in which the competent authority or the administrative courts ultimately conclude that irrevocable environmental permits will have to be amended to include project specific permit conditions on noise emission, external safety and cast shadow. Dutch case law is on these points still in development and we therefore advise operators of existing wind projects who are faced with any such claims from local stakeholders or environmental pressure groups to seek expert legal counsel.