Legislative bill: internal nitrogen netting no longer permit-free
17 March 2023
When a new project causes an increase in nitrogen emissions, but these can be offset within the project or the location by reducing the permitted nitrogen emissions, this is known as internal netting (intern salderen). At present, internal netting does not require a permit. A recent bill may change this by introducing a nature permit requirement for nitrogen-related changes to a project.
This blog discusses current permit practice concerning internal netting, as well as the new bill and its consequences.
With the introduction of the Emergency Act for the Integrated Approach to Nitrogen (Spoedwet aanpak Stikstof) on 1 January 2020, Article 2.7 of the Nature Conservation Act (Wet natuurbescherming) was amended. This amendment means that a nature permit is only required for projects that could have significant effects on a Natura 2000 area.
If the change or expansion of a project does not lead to an increase in nitrogen deposition compared to the reference situation, then significant effects caused by this change have been ruled out on the basis of objective data. In the case of complete internal netting there is no increase in nitrogen deposition compared to the reference situation, which means that a permit is not required for internal netting either. The Administrative Jurisdiction Division of the Council of State confirmed this in a ruling of 20 January 2021 (ECLI:NL:RVS:2021:71).
The lapsing of the permit requirement for internal netting also means – or course – that no (new) permit for the project will be obtained. The absence of a permit sometimes causes uncertainty among initiators. In practice, in answer to this uncertainty the phenomenon of ‘affirmative refusal’ (positieve weigering) is applied. In the case of affirmative refusal, the initiator does indeed apply for a permit, in this case a nature permit, but the competent authority refuses this permit because no permit is required. This affirmative refusal is then published and – pursuant to Article 6:2 of the General Administrative Law Act (Algemene wet bestuursrecht) – legal protection against this decision may also be sought in the administrative court.
There are differing opinions in the lower courts on the meaning of affirmative refusal. In a decision of 18 October 2022 (ECLI:NL:RBGEL:2022:5829) the District Court equated affirmative refusal with a nature permit. However, on 1 December 2022 the District Court of Oost-Brabant came to precisely the opposite conclusion (ECLI:NL:RBOBR:2022:5232), making it unclear what legal certainty affirmative refusal gives.
On 14 February 2023 the bill on the permit requirement for internal netting was opened for consultation, in implementation by the government of the earlier letter to the House of Representatives of 25 November 2022 (Parliamentary papers II 2022/23, 34682, no. 108) in which the permit requirement had already been announced.
The bill extends the permit requirement for a ‘Natura 2000 activity’ in the Environment and Planning Act (Omgevingswet). Through this extension, nitrogen-related changes that cannot have significant effects on a Natura 2000 area as they do not lead to an increase in nitrogen deposition compared to the reference situation will now require a permit. This broad formulation of the new permit requirement means that a permit is required not only for internal netting, but also for changes that – without internal netting – lead to a decrease in actual deposition.
The introduction of a permit requirement for nitrogen-related changes broadens the sphere of influence of the competent authorities (especially the provinces). For example, the permit requirement means that the competent authority not only keeps track of these activities, but also has the ability to manage them through the granting of permits and to establish policy rules within that framework. These policy rules can include conditions and restrictions for nitrogen-related changes.
The new permit requirement for nitrogen-related changes will potentially generate a large number of new permit applications. In order to limit the administrative burden for the competent authorities and initiators, the government intends to limit the scope for the permit requirement in a general administrative order.
The government is considering two variants for curtailing the scope, which will be set out in the Living Environment (Activities) Decree (Besluit activiteiten leefomgeving):
- a variant with a lower deposition limit and specific exceptions for certain categories of activities;
- a variant reflecting the activities subject to the permit requirement in the environmental track, supplemented by some activities requiring notification in the environmental track.
Unused nitrogen emission allowance
With this bill, the government directs its attention specifically towards the ‘unused rights’ (latent ruimte) in existing nature permits. In short, unused rights are the difference between the amount of nitrogen deposition an initiator is allowed to cause under the permit, and the deposition he actually causes. Unused rights can arise due to various factors, such as stricter environmental requirements, the use of cleaner techniques or changes in business processes.
Under the current system, through internal netting with unused rights a new nitrogen-producing activity can be started without requiring a nature permit. This can lead to an actual increase in nitrogen deposition on already overburdened Natura 2000 areas. The government takes the view that this is an undesirable situation.
As described above, in the past a permit was already required for some forms of internal netting. At that time, there were strict rules on internal netting with unused rights. This bill gives the government, but also individual provinces, the option of scaling back these rules. The regulation of unused rights has received a much criticism in the past because it is seen as a curtailment of rights that have been legally obtained.
The government does not regard the curtailment of unused rights as ‘taking away property’, as it itself describes. In this regard, the government considers that the permits that have given rise to unused rights were issued for the purpose of a project, not a person. This, it reasons, does not create personal property rights that are then taken away. In support of this, the government refers to a recent decision by the Court of Justice of the European Union dated 10 November 2022 (ECLI:EU:C:2022:864). However, it is highly questionable whether this case law applies in full. Although some support for this can be found in lower Dutch case law (see, for example: The Hague District Court 15 July 2020, ECLI:NL:RBDHA:2020:6375) the government’s view is at odds with the case law of the Supreme Court (see, for example: Supreme Court 16 November 2001, ECLI:NL:HR:2001:AD5493) and previous European case law (see, for example: ECHR 11 January 2007, Anheuser-Busch/Portugal, appl. no. 73049/01 and ECHR 13 January 2015, Vékony/ Hungary, appl. no. 65681/13).
The intended date of entry into force of the new bill is 1 January 2024, simultaneously with the entry into force of the Environment and Planning Act.
Initiators who use internal netting for a permit or have unused rights would be well advised to assess the consequences of this legislative amendment before it enters into force.
If you have any questions about the consequences of this bill or need other advice on nature conservation law, please contact one of our specialists in the public law team.