C-240/83

Mr President, heating plant which can burn both heating Members of the Court, oil and waste oils. Having regard to the legislation mentioned earlier, the Procureur de la République [Public Prosecutor] A. The case on which I shall now express attached to the Tribunal de Grande Instance my views once again centres on the directive [Regional Court], Créteil, came to the on the disposal of waste oils (Official conclusion that the Association was inciting Journal 1975 L 194, p. 23 et seq.), which is the commission of an offence within the familiar from other proceedings. meaning of the Law of 15 July 1975. It was thereby pursuing an illegal purpose and was In France — as the Court will also recall — thus a nullity which should be dissolved Decree No 79/981 of 21 November 1979 pursuant to Article 3 of the Law of 1901. and two implementing orders of the same To that end, the Procureur de la date were issued to give effect to the République instituted proceedings before directive, as was (a point of which the the Tribunal de Grande Instance, Créteil. As importance has emerged only in the present the 1979 decree and its implementing orders case) an order of 21 May 1980 on the had been issued to give effect to the conditions governing the specifications for, directive mentioned earlier, in the course of and operation of, heating installations which the proceedings, the defendant raised the burn waste oil. question whether the directive afforded a legal basis for the prohibition of the burning Although initially the burning of waste oils of waste oil (which, in its opinion, was not in France was forbidden by an order of the case). In addition, it seems that doubts November 1956, the legislation introduced were expressed as to the validity of the in 1979 provided that only undertakings directive, inasmuch as there was a possibility holding a ministry permit were authorized of conflicts, not covered by Article 36 of the to dispose of waste oils. Article 7 of the EEC Treaty, between the zoning decree and Article 2 of the implementing arrangements of the directive and the order on the disposal of waste oils placed principle of the free movement of goods, the emphasis on regeneration, and — under between the provision for indemnities to be a 1980 order — waste oil may be burned granted to undertakings engaged in the only in approved installations which collection and/or disposal of waste oil and incorporate special safeguards. Furthermore, the principle of free competition, and the unauthorized burning or unlicensed between the requirement of special auth­ disposal of oil is an offence under Article 24 orization and the principle of freedom of of the Law of 15 July 1975 on the disposal trade. of waste. In view of those considerations, the court before which the action was brought sees The defendant in the main proceedings is an problems in the interpretation of the association founded under the Law of 1 July directive in pursuance of which the French 1901 which represents the interests of manu­ legislation in question was adopted, facturers, dealers and users of stoves and especially as regards whether it affords a

Is [Council] Directive [No 75/439/EEC of 16 June 1975 on the disposal of waste oils] The last point concerns Articles 13 and 14, in conformity with the principles of freedom which provide that undertakings engaged in of trade, the free movement of goods and the collection and disposal of waste oils, free competition established by the Treaty upon which certain obligations are imposed of Rome, in view of the fact that Articles 5 by Article 5, may be granted indemnities and 6 of [that] directive empower the financed by a charge imposed on products administrative authorities of the States to which after use are transformed into waste draw up zones which are assigned to one or oils, or on waste oils themselves (which is more undertakings approved by those auth­ reminiscent of a subsidy paid from public orities and charged by them with the funds). collection and disposal of waste, and the fact that Articles 13 and 14 authorize the As is clear from the submissions made in the granting of subsidies? main proceedings, those legal provisions must be examined in the light of the In addition, does the directive provide legal principles contained in the Treaty on the grounds justifying the prohibition of the freedom of trade, the free movement of burning of waste oils? goods and freedom of competition.

It is really not clear how the freedom to that — as is also clear from the judgments provide services might be affected by the of the Court — rights guaranteed in that provision in the directive requiring disposal manner do not constitute unfettered pre undertakings to hold a permit, at least if — rogatives and the protection accorded to and this is a matter for the Member States them is subject to restrictions dictated by the implementing the directive — permits are public interest (see judgment in Case

Commission regarding the role played by provided for in the directive appear to be fundamental rights in Community law, and proportionate to the goal pursued, there can to the fact that the fundamental freedom to still be no misgivings in that regard. That is engage in commerce or pursue a pro certainly the case in so far as the directive fessional or trade activity is regarded as a — characteristically — limits itself to general principle of Community law (see, 2 for instance, the judgment in Case 4/73 ). 2 — Judgment of 14 May 1974, Case 4/73, J. Nold, Kohlen- und Baustoflgroßhandlung v Commission of the European It should, however, be added immediately Communities, [1974] ECR 491.

The foregoing of course sheds no light on the question — which is, indeed, not the subject of the present proceedings — whether the French legislation implementing (b) It might be appropriate to consider the the directive does not perhaps have principle of the free movement of goods, excessively far-reaching effects on the free which is also claimed to be relevant to the movement of goods and cannot therefore be appraisal of the validity of the directive, in regarded as covered by the directive. view of the possibility, under Article 5, of creating zones in which exclusive collection and disposal rights are granted in order to ensure that all waste oil is collected and disposed of. (c) Lastly, in the context of the first question, consideration must be given to the principle of free and fair competition, which, in the opinion of the national court, might be affected by the possibility of indemnities However, it can easily be demonstrated that financed by a levy being granted to in reality Article 5 does not contravene that collection and disposal undertakings. principle, which is of essential importance to the common market. In the first place, Article 5 is formulated restrictively, that is, it makes provision for the adoption of that measure only in cases where the aims 3 — Judgment of 10 March 1983, Case 172/82, Syndical national des fabricants raļļhietirs d'huile de graissage and defined in Articles 2, 3 and 4 of the Others v Groupement d'intérêt économique 'Inter-Huiîes' and directive cannot otherwise be achieved, Others, [1983] ECR 555. which means that the circumstances must be 4 — Opinion of the Advocate General in Case 173/83, Commission of the European Communities v French such that less restrictive measures would be Republic [1985] ECR 491.

However, there are no real grounds for its criticism is aimed not so much at the doubt as to the validity of the directive in directive itself as at the way in which it has that respect either. The Commission has been implemented in France, a matter rightly argued that the prohibition imposed which — as previously observed — is not at by the Treaty on State-funded aid is not issue in these proceedings. absolute but is moderated by certain factors and, as Articles 92 to 94 show, derogations are permissible. It is also important to note that the indemnities allowed under Articles 13 and 14 of the directive are not mere 2. Interpretation of the directive in relation subsidies; in fact, they are intended as a to the question whether it provides a legal quid pro quo for obligations imposed on basis for the prohibition of the burning of certain undertakings in the public interest. A waste oil. further significant point is that Article 13 establishes a clear limit: the indemnities must not exceed annual uncovered costs actually recorded by the undertaking, taking into account a reasonable profit. Even here, it is expressly mentioned that they must not It should be noted at the outset that, in view be such as to cause any significant distortion of the legal position in France under of competition. consideration here, the question should be construed more narrowly. The situation is that French law — by virtue of Article 7 of the decree of 21 November 1979 — merely gives priority to the recycling of waste oil in preference to burning. The burning of waste oil is thus not completely excluded, but is, There can therefore really be no question of by virtue of the order of May 1980 a breach of the principles of competition mentioned at the beginning, limited to law resulting from the formulation of the specific industrial installations. directive. That point was, indeed, conceded by the Court of Justice itself, in Case 172/82 3 (in so far as it held that prohibitions on exports cannot be regarded as satisfying an economic requirement, There is thus no need to analyse in detail precisely because Articles 13 and 14 of the the merits of the French Government's view directive permit the granting of that Article 3 of the directive leaves the indemnities). choice open between the recycling and the burning of waste oil and that it is therefore permissible — if a Member State has opted for recycling — to rule out burning altogether. None the less, it should be stated that that view does not reflect a correct (d) All in all, there appears to be no foun­ understanding of the directive; rather, it dation for the view that the directive is must be assumed that the two possibilities invalid. Indeed, the defendant in the main specified in Article 3 are supposed to rank proceedings admitted as much during the equally, and it therefore seems hardly justi­ oral procedure, thereby making it clear that fiable to maintain that, since the directive is silent as to how to give effect to the two 3 — Judgment of 10 March 1983, Case 172/82, Syndicat national possibilities, Member States may draw the v des fabricants raffineurs d'huile de graissage and Others line between recycling and combustion Groupement d'intérét économique 'Inter-Huiles' and Others, [1983] ECR 555. exactly as they please.

In the first place, it is clear from the In my view there can be little doubt — in directive — and I now address myself to the the light of all the submissions made in the problem raised by the second question — proceedings — that the first proposition is that the disposal of waste oil (which, under to be preferred. It is important to note — Article 3, includes combustion) may be and the information, supported by tables, undertaken only by a person holding a given by the Commission and the German permit in accordance with Article 6. Government leaves no room for the slightest doubt — that if waste oil is simply burnt in Where no permit has been granted, the normal, conventional installations (even prohibition of burning rightly prevails. The those fitted with special burners) a large directive also makes the following un­ volume of dangerous substances escapes equivocal provisions: waste oils are to be into the air. That problem cannot be dealt disposed of safely (Article 2); any with by laying down rules and standards, on processing of waste oils causing air account of the very varied composition of pollution which exceeds the level prescribed waste oils. Furthermore, because of the by existing provisions is to be prohibited costs involved, small installations cannot be (Article 4 (3) — and the provisions referred equipped with purification devices which to doubtless include national provisions as eliminate harmful fumes, as required by the well); disposal is to be carried out in instal­ directive. In addition, there is still the lations which are in keeping with the problem of supervision, which is essential current state of technical development for the effective enforcement of the (second paragraph of Article 6); and directive. It would be wholly unrealistic to disposal is to be carried out in such a way as imagine that small-scale combustion plants to preclude any avoidable risk of water, air (of which there are apparently several or soil pollution (Article 9). The question is hundred thousand throughout the therefore limited to whether those Community) could be reliably supervised. provisions cover legislation of the kind in force not only in France but also in the The only possible reply to the second Federal Republic of Germany (whereby question, therefore — even though it may combustion is not permitted except in be doubted whether the directive at issue industrial installations), or whether the allows total prohibition of oil-burning — is meaning and purpose of the directive that the directive does allow restrictions on demand that the only rules which may be that method of disposal of waste oil laid down must be rules designed to ensure whereby the burning of waste oil is confined compliance with the aforementioned to large-scale installations capable of being requirements, with the result that any reliably supervised, where the fitting of the undertaking which observes them must requisite protective devices is not precluded obtain a permit. on economic grounds.