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Regulatory framework and policy

Domestic legislation

What is the primary environmental legislation in your jurisdiction?

Most environmental laws and implementation decrees are contained in the French Environmental Code.

International agreements

Is your jurisdiction a signatory to any international environmental agreements/commitments?

France is a signatory to most international environmental treaties and agreements. It has also demonstrated a willingness to lead the global effort to protect the environment as reflected by, among other things, the Paris Agreement on Climate Change (December 2015) and the presentation of a proposed Global Pact for the Environment at a UN summit (September 2017).

Regulators

Which government bodies regulate compliance with environmental legislation and what is the extent of their powers?

Although several government bodies have authority over environmental issues, the main ones are the Regional Directorates for the Environment, Planning and Housing (DREALs or DRIEE in the Paris area), which act as inspectorates of the facilities classified for environmental protection purposes (ICPEs). DREAL inspectors can issue notices of violation in case of criminal offences and also guide administrative action from the local prefect, including by preparing draft environmental permits and injunction orders in case of non-compliance.

Policy

How would you describe current government policy on environmental regulation and how does it compare on an international scale?

In 2016 the Organisation for Economic Cooperation and Development (OECD) published a report reviewing France’s environmental performance over the previous decade. While “commend[ing] France for its role in brokering the historic climate agreement at COP21 and for its 2015 Energy Transition Law, which sets ambitious targets for further reductions in greenhouse gas emissions, improved energy efficiency, growth in renewable energy and diversified electricity generation”, the OECD noted that further efforts are required to reduce air pollution from diesel vehicles and water pollution from pesticides. The OECD also recommended greater transparency, wiser public investments and a simplification of environmental regulations, the development of which has been exponential over the past decade. In 2018 the Environmental Performance Index, produced jointly by Yale University and Columbia University in collaboration with the World Economic Forum, ranked France second (Switzerland being ranked first) out of 180 countries based on "24 performance indicators across 10 issue categories covering environmental health and ecosystem vitality". In practice, government policy oscillates between overregulation (due to the acceleration of environmental awareness, the EU impetus and the technicality of related issues) and simplification or clarification efforts (ie, to help industrial actors navigate through changing rules, to facilitate public participation and to rationalise the workload of environmental inspectors).

Permits

Activities subject to permit

Which activities require an environmental permit and how are they classified for such purposes?

Three main types of permit or permitting regime for industrial activities exist in France:

  • authorisation (for the most polluting activities);
  • registration; and 
  • declaration (for the less polluting activities).

These activities are designated as facilities classified for environmental protection purposes (ICPEs). They are listed in a nomenclature that contains over 250 entries or rubrics. Each rubric sets out capacity or volume thresholds and defines the corresponding permitting regime. When an industrial project includes several ICPE activities that are individually subject to different regimes, the application must be filed for the most stringent type of permit. ICPE permits are integrated permits as they cover all potential sources of nuisance or impact on all environmental media at a given facility. As of 2015 approximately:

  • 450,000 facilities were subject to a declaration;
  • 12,000 facilities were subject to a registration; and
  • 32,000 facilities were subject to an authorisation.

Continuous efforts have been made by the environmental regulator to modify the thresholds, facilitate declarations and registrations and reduce the number of sites subject to authorisation that are the priority of environmental inspectors.

A second water nomenclature (also known as the IOTA nomenclature) is applicable to non-ICPE activities and equipment that:

  • require the extraction of groundwater or superficial water;
  • modify the level or drainage of such water; or
  • generate water discharges (even if they are non-polluting).

This nomenclature also provides for two permitting regimes depending on predefined thresholds:

  • the declaration regime; and
  • the authorisation regime.

For simplification purposes, a single procedure and permit called ‘environmental authorisation’ was introduced in March 2017 to apply to all new ICPEs or IOTAs above authorisation thresholds.

Issuing authority

Which authority issues permits?

The local prefect is the main authority which issues permits, with the support of environmental services – that is, mainly the Regional Directorates for the Environment, Planning and Housing for ICPE applications and water services for IOTA applications.

Requirements

What are the procedural and documentary requirements to obtain a permit?

Operators of ICPEs that are subject to the declaration regime should submit a description of the operating entity or person and of the contemplated activities and corresponding nomenclature rubrics and maps of buildings and on-site networks. Since January 2016, declarations can be made online. In response, the prefect sends a receipt, along with the generic requirements set at national level for the relevant rubrics.

Operators of ICPEs that are subject to the registration regime should add detailed descriptions of the contemplated effects on – among other things:

  • the environment;
  • the neighbourhood; and
  • the operator’s technical and financial capabilities.

The application is made available to the public and is examined by the prefect’s services. The permit consists of a registration order with ad hoc technical requirements, theoretically issued within five months of submission.

Operators of ICPEs that are subject to the authorisation regime, as reformed on 1 March 2017, are encouraged to test the feasibility of their contemplated project via informal presentations to the environmental authorities or by applying for a preliminary project certificate. The new environmental authorisation aims at simplifying, under a single permit, various authorisations provided for under:

  • the Environmental Code (ie, for ICPEs or IOTAs, natural reserves, protected species and habitats, genetically modified organisms);
  • the Forestry Code (for clearing);
  • the Energy Code (for electricity production);
  • the Code of Cultural Heritage; and
  • other codes.

Accordingly, the application file must be extremely detailed and will be subject to both a review by various prefectural services and a public hearing. The permit consists of a prefectural order with ad hoc technical requirements, expected to be issued within approximately nine months of submission.

Fees

Do any permit fees apply?

There are no permit fees per se. The general tax on polluting activities that was previously levied upon delivery of an environmental authorisation has been cancelled as of 1 January 2018.

Validity period and renewal

What is the validity period for permits and how can they be renewed?

The principle is that permits have an unlimited validity. Exceptions include:

  • facilities that are expected to operate for less than a year (eg, pilot schemes) – the permits are issued for six months, renewable once;
  • projects involving an innovative process, or affecting neighbouring uses – duration is proposed by the operator, renewal should follow the same procedure as the initial application;
  • quarries, waste landfills and carbon dioxide geological storage – duration and renewal are subject to specific regulations applicable to those activities; and
  • facilities that are subject to an environmental authorisation since 1 March 2017 and imply an increasing use of soil surface of subsurface – prolongation or renewal must be applied for at least two months before expiry of the initial authorisation.

Transferral

Can permits be transferred? If so, what procedure applies?

For ICPEs that are subject to declaration or registration, the new operator must notify the prefect within one month of effective transfer.

For ICPEs that are subject to the new environmental authorisation since 1 March 2017, the new operator must notify the prefect within three months of effective transfer. However, a number of facilities are required to secure financial guarantees to cover any possible major accidents or emergency clean-ups (eg, waste landfills, quarries, ‘Seveso High’ chemical plants and listed activities subject to authorisation or registration). For those facilities, a transfer of permit is subject to prior approval from the prefect, based on evidence that the new operator has secured its own financial guarantees.

Appeal

Are permit decisions subject to appeal? If so, what procedure applies?

ICPE permits can be challenged before the administrative courts:

  • by applicants or operators themselves within two months of receipt of the signed permit; or
  • by any third party that may be affected by the site within four months of publication or public posting of the permit.

An informal appeal to a higher governmental service can also be made within two months, in which case the above periods for action before the administrative courts are extended by two further months.   

Non-compliance

What are the consequences of violating permit rules and decisions?

The violation of ICPE permit requirements (or the operation of an ICPE without the required type of permit) may trigger both criminal and/or administrative sanctions.

As an example, non-compliance with a permit requirement is punishable by a €1,500 fine and an administrative injunction to comply within a set timeframe. Persistent non-compliance is punishable by up to two years in prison and/or a €100,000 fine, and entitles the prefect to:

  • order the payment of an amount corresponding to the cost of corrective measures;
  • have those measures carried out at the operator’s cost;
  • suspend operation until measures are carried out; or
  • impose an administrative fine of €15,000 and a daily penalty of €1,500.

Environmental impact assessments

Projects subject to assessment

What projects require a preliminary environmental impact assessment?

Preliminary environmental impact assessment procedures were substantially reformed in 2017. Article R.122-2 of the Environmental Code sets out a list of facilities classified for environmental protection purposes (ICPEs), which are subject to the new environmental assessment procedure that includes:

  • an extensive impact study;
  • a consultation of the environmental authority, municipalities and the public; and
  • an examination by governmental services.

Such a procedure may be systematically required, typically for ICPEs falling within the scope of:

  • the Industrial Emissions Directive;
  • new Seveso sites;
  • large quarries;
  • windfarms;
  • livestock farms; and
  • carbon dioxide geological storage.

Other listed activities may be subject to an environmental assessment on a case-by-case basis. This will apply mostly to ICPEs that are subject to authorisation (excluding those that are subject to declaration and rarely applying to those that are subject to registration). A request for review must be submitted to the environmental authority which decides (within 35 days) whether the full environmental assessment procedure is applicable. If not, the permit application must still include an environmental incidence study.

Scope of assessment

What environmental factors and risks fall within the scope of the impact assessment report?

The impact study required under the environmental assessment procedure must present all items listed under Article R.122-5, II of the Environmental Code (derived from Directive 2011/92/EU on the assessment of the effects of certain public and private projects on the environment) including, among other things, descriptions of:

  • the project;
  • the ‘reference scenario’ (the initial environmental situation);
  • the elements that may be affected by the project;
  • the main environmental impacts of the project, both direct and indirect, including in case of major accidents or disasters;
  • the main alternatives and an indication of the main reasons for the choice of the project, taking into account its effects on the environment and human health;
  • the avoidance, reduction and, if possible, compensation measures, and – ideally – the contemplated monitoring of such measures; and
  • forecasting methods or other reliable data used in order to identify and assess the main environmental effects, among other things.

Other specific studies may also be required depending on the project, such as:

  • hazard studies;
  • Natura 2000 impact studies;
  • water studies; or
  • renewable energy feasibility studies.  

Assessor

Who conducts assessments?

For projects that are subject to the environmental assessment procedure, the permit application (including the impact study) is prepared by the applicant and specifically forwarded by the prefect to the relevant environmental authority. The environmental authority is selected according to criteria set out in Article R.122-6 of the Environmental Code and can be:

  • the ministry in charge of the environment;
  • the environmental authority section of the General Council for the Environment and Sustainable Development; or
  • its regional service.

The regional prefect was initially listed as an environmental authority; however, in December 2017 the Administrative Supreme Court held that the prefect could not act as an independent environmental authority and as the authority which grants permits. This affected a number of projects in 2018 – particularly windfarm projects – and has led to further guidelines from the Ministry of Ecology and decisions from the Administrative Supreme Court on how to regularise those situations.

Publication

Are the results of impact assessments publicly available?

The whole application for an environmental authorisation, including the impact study, goes through a public hearing. Since 1 January 2018, applicants must provide a digital version of the environmental assessment, in addition to all of of the files containing the raw data used. This should facilitate inclusion in the national database of environmental assessments that has existed since 2007.

Challenge

Can the results of an impact assessment be contested? If so, what procedure applies?

An administrative court may suspend an environmental authorisation upon request by a third party when such request is based on the absence of an impact study. There is extensive case law on impact studies, which have found that significant deficiencies have amounted to an absence of such studies.

Soil pollution

Liability

What regime governs liability for soil pollution (including the allocation, transfer and limitation of liability)?

Reflecting the developments of case law, Article L.556-3 of the Environmental Code clarifies the hierarchy of liable parties in case of soil pollution. The primary liable party is the last operator of the facility classified for environmental protection purposes (ICPE) that generated such pollution or, if soil pollution results from non-ICPE activities, the liable party is the waste producer that contributed to the pollution or the waste holder whose fault contributed to such pollution. Alternatively, in the absence of any such liable party, the real estate owner of the contaminated land can be held liable, but only if it evidenced that it was negligent or was not unrelated to such pollution.

Due diligence

What environmental due diligence measures are recommended before concluding land transactions?

Basic recommended measures consist of checking publicly available information from various online databases, in particular:

  • BASOL – which lists approximately 6,500 sites identified as “contaminated or potentially contaminated sites and soils requiring preventive or remedial action”;
  • BASIAS – which lists approximately 300,000 sites identified as being or having been occupied for industrial purposes; and
  • GEORISQUES, a database that is meant to consolidate available information on natural and industrial risks, as well as on the soil information sectors that are currently being delineated at local level.

If the seller’s information suggests that a potential source of soil or groundwater contamination was operated at or in close proximity of the site in the past, it is highly recommended that seller’s Phase I/II-type reports are obtained. Any consultant should fully understand the French national methodology on the management of contaminated land, especially since such methodology, initiated in 1999 and substantially reformed in 2007, was further updated in April 2017.

Remediation

What remediation and clean-up measures are typically applied and how can remediation costs be recovered?

The French national methodology on the management of contaminated land was, and remains after its update in April 2017, risk-based in its approach. There are no systematic remediation thresholds, but rather the methodology is based on an iterative approach, which is designed to assess potential exposure based on the reality of land uses. Remediation is designed to ensure that such uses can be safely implemented and specific post-remediation use restrictions or easements are provided for, in order that future occupants or redevelopers are aware of the land’s history and remediation. The updated methodology focuses on preventing contamination from current activities and on various recent technical developments (eg, the use of off-site impact assessments, on-site hot spots and the reuse of excavated soil).

When contamination is discovered, environmental authorities will turn to the liable party as identified according to the principles described above. The authorities will disregard any private contracts under which the liable party has transferred (or reassigned) the corresponding responsibilities or costs. The terms and conditions of a private law contract and/or the possible recovery of remediation costs may be discussed before civil courts only.

However, since 2015 a third-party applicant can voluntarily take the responsibility of the previous operator, carry out the remediation and officially become the new liable party vis-à-vis the authorities. This process is supervised by the authorities, which will review the remediation plan and also require that any third-party applicant provides financial securities to cover potential non-performance. While this amendment to the remediation procedure had long been anticipated, taking on such responsibilities requires significant financial, technical and legal resources, which only a limited number of applicants possess.

Air pollution

Regulation

How are air emissions regulated? What air quality standards and emission limits apply?

Air discharges from industrial activities are generally regulated by the rules and permits applying to facilities classified for environmental protection purposes (ICPEs). Emission limits may be set at national level for specific activities (eg, waste incineration and surface treatment) and depending on their size/regime, but site permits may set out different limit values.

Non-compliance

What are the consequences of non-compliance with air emissions regulations?

Non-compliance with ICPE rules or permits can lead to criminal and/or administrative sanctions.

For example, non-compliance with a permit requirement is punishable by a €1,500 fine and may attract an administrative injunction to comply within a set timeframe. Persistent non-compliance is punishable by up to two years in prison and/or a €100,000 fine, and entitles the prefect to:

  • request the payment of an amount corresponding to the cost of corrective measures;
  • have those measures carried out at the operator’s cost;
  • suspend operation until measures are carried out; or
  • impose an administrative fine of €15,000 and a daily penalty of €1,500.

Water pollution

Regulation

What rules govern the discharge of wastewater and the protection of water resources?

Wastewater discharges from industrial activities are generally regulated by the rules applying to facilities classified for environmental protection purposes (ICPEs). In addition, non-ICPE activities and equipment that require extraction of groundwater or superficial water, or modification of the level or drainage of such water, or generate water discharges (even non-polluting ones), fall under the water nomenclature known as IOTA. As of 1 March 2017, for the purpose of simplification, a single procedure and permit (called the ‘environmental authorisation’) applies to all new ICPEs or IOTAs that are above authorisation thresholds.

The protection of water resources is taken into account in those rules and permits. Groundwater abstraction wells for drinking purposes are also subject to specific quality standards, additional protection areas, and reinforced monitoring programmes derived, among others, from Directive 2006/118/EC on the protection of groundwater against pollution and deterioration.

Non-compliance

What are the consequences of non-compliance with water pollution regulations?

In addition to administrative and criminal sanctions that are applicable to any ICPE or IOTA permit holder in case of non-compliance with water regulations, the Environmental Code includes various provisions covering water pollution from various sources. For example, the direct or indirect release of any substance, the action or reaction of which has damaging effects on the flora or fauna (Article L.216-6 of the Environmental Code) or on fish species or their environment (Article L.432-2) is punishable by up to two years’ imprisonment and fines up to €75,000 or €18,000, respectively. Similarly, the discharge of any substance or good in public rivers or canals is punishable by a fine that can range from €150 to €12,000 (Article L.2132-7 of the General Code of Public Property).

The liability of the polluter can also be challenged before civil courts, based on tort, neighbourhood disturbance or custodial possession.

Waste and hazardous substances

Definition

How is ‘waste’ defined in your jurisdiction?

Under Article L.541-1-1 of the Environmental Code, which implements the Waste Directive (2008/98/EC, recently amended by EU Directive 2018/851/EU), ‘waste’ means “any substance or object, or more generally any movable good, which the holder discards or intends or is required to discard”.

Waste handling

What rules and procedures govern the handling of waste, with particular respect to:

(a) Storage?

Long-term storage (as opposed to short-term storage for transit and sorting purposes) is, as a general principle, authorised only for ‘final waste’ that can no longer be recycled or treated under the present technical and economic conditions. Long-term storage is thus considered a form of disposal. Rules depend on the category of waste: hazardous, non-hazardous or inert.

(b) Transport?

Waste collectors and transporters of 0.5 tonne of non-hazardous waste or of 0.1 tonne of hazardous waste must declare their activities with the local prefect. In addition, for hazardous waste, transport is subject to the European Agreement concerning the International Carriage of Dangerous Goods by Road and its national implementation tools. Collectors and transporters of hazardous waste should also fill in the waste manifest that they receive from the waste producer, as well as waste registries. Trading and brokerage activities require a specific declaration.

(c) Disposal?

‘Disposal’ means “any operation which is not recovery even where the operation has as a secondary consequence the reclamation of substances, materials or products or energy”. It is the least favoured operation in the hierarchy of waste management options derived from the Waste Directive, and disposal units, such as incineration and co-incineration, are very strictly regulated.

(d) Recycling/reuse?

‘Recycling’, ‘reuse’, 'recovery' and 'preparing for reuse' have specific definitions under the Waste Directive. In addition, the French Environmental Code has developed the notions of re-utilisation and preparing for re-utilisation. The directive also introduced the notions of by-products and end-of-waste. Recycling and reuse opportunities should be reinforced as part of the Circular Economy Package, including via amendments to the EU Waste Framework Directive (2008/98/EC) through the new EU Waste Framework Directive (2018/851/EU), which is due to be transposed into law by 5 July 2020. The Ministry of Ecology also issued a Circular Economy Roadmap in April 2018, which set out 50 regulatory, economic and operational actions concerning waste management.

Liability

What is the extent of a waste producer’s liability after transferral of waste (eg, to a waste disposal agent)?

Waste liability usually rests with the waste producer or ‘holder’ (although a debate exists as to the criteria to define the latter), which is responsible for the environmentally sound management of its waste until final treatment (including transport, recovery or disposal), regardless of physical transfers to professional agents (at least from the authorities’ perspective).

However, waste liability now tends to shift to the manufacturer of the good that will ultimately generate or be turned into a waste, under various ‘extended producer responsibility’ regimes. France champions these regimes, which may be regulated at EU level (eg, packaging, waste electrical and electronic equipment, end-of-life vehicles) or at national level (eg, tyres, textile, furniture), or may be set up on a voluntary basis (eg, agricultural supplies).

Waste recovery

Are waste producers bound by any waste recovery obligations?

Under the Waste Framework Directive, EU member states are expected to increase the preparation for reuse and recycling of paper, metal, plastic and glass from households to a minimum of 50% of overall weight by 2020, and that of non-hazardous construction and demolition waste to a minimum of 70% of overall weight. These objectives have been taken into account in French waste regulations and have been reinforced by the Circular Economy Roadmap issued by the Ministry of Ecology in April 2018. The EU Waste Framework Directive was also amended in May 2018 (and will need to be transposed into law before 5 July 2020) to include staged objectives to increase preparation for the reuse and recycling of municipal waste.

Waste disposal agents

How are the business activities of waste disposal agents/landfill operators regulated?

Waste disposal sites and operators are subject to rules and permitting for facilities classified for environmental protection purposes (ICPE), with specific additional requirements depending mostly on the nature, hazardousness and volume of waste and operations. In addition, some specific categories of waste (eg, oils, polychlorinated biphenyls/polychlorinated terphenyls, tyres) can be handled only by disposal agents with ad hoc licensing.

Hazardous substances

What special rules, regulations and safeguards apply to the handling and disposal of hazardous materials?

Transport of hazardous waste is subject to the European Agreement concerning the International Carriage of Dangerous Goods by Road and its national implementation tools. Collectors and transporters of hazardous waste should also fill in the waste manifest that they receive from the waste producer, as well as their own waste registry. Hazardous waste treatment operators may also be subject to additional rules if their site also qualifies as a ‘Seveso’ site (given the total volume of hazardous substances potentially present at any one time in the facility) and/or as an IED-site under Directive 2010/75/EU on industrial emissions.

Chemical and product regulation

Regulation

What environmental regulations and procedures apply to the production, transportation and sale of chemicals and other products?

The EU Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) Regulation (1907/2006) has governed the production of chemicals since June 2007. In addition, Regulation 1272/2008 on the classification, labelling and packaging of chemicals entered into force in France in December 2010 for substances and in June 2015 for mixtures. The transport of chemicals is subject to the European Agreements concerning the International Carriage of Dangerous Goods by Road, by Rail or by Inland Waterways and their national implementation tools. Criminal and administrative sanctions are cumulatively applicable, especially for major violations.

Liability

Types of liability

What types of liability can arise for environmental damage (eg, administrative, civil, criminal)?

Liability of polluters for damage to the environment at large is usually challenged before civil courts (eg, based on tort, custodial possession or neighbourhood disturbance).

Directive 2004/35/EC on environmental liability was also transposed into the French Civil Code to provide for indemnification of damage to protected species and habitats, to water with significant adverse effects or to land with significant risk of adverse effects on human health. Potentially eligible generating events must have occurred before 30 April 2007. The statute of limitations is 30 years from the generating event (and not the actual observation of the damage).

After many years of legal debate, a standalone ecological damage regime was also introduced into the Civil Code, for events that occurred before 1 October 2016 and which caused substantial effect on ecosystems, their functions or the collective human benefit derived from the environment. Governmental entities and certified environmental groups may request compensation in kind or, where this is not possible, indemnification to be allotted to environmental remediation measures. The statute of limitations is 10 years from the date on which the plaintiff was or should have been aware of the damage. Indemnification of material and moral losses resulting from environmental damage may still be claimed for on civil grounds.

In addition to fines or even prison sentences, the criminal courts may also order that the polluting activity stop, and that remediation be either imposed (including with daily penalties) or executed at the operator’s cost. A victim can also identify itself as a civil party to the criminal proceedings and thus seek damages.

Comparatively, the administrative courts seem generally reluctant to impose indemnification for environmental damage.

Directors’ and officers’ liability

Can directors and officers be held personally liable for company environmental offences? If so, can liability be limited through insurance coverage and/or contractual indemnities?

Corporate entities can be held liable and receive fines up to five times those applicable to individuals. Alternatively or additionally, directors and officers can be held personally liable for company environmental offences. Liability can be limited through insurance coverage and/or contractual indemnities as provided for by the company.

Liability for authorised activity

Can environmental liability arise even in the course of authorised activities (eg, operations subject to environmental permits)?

Yes. The fact that the polluting activity may be duly permitted is not a valid defence. In essence, if an activity is a source of environmental liability, it is also non-compliant.

Defences

What defences are available to environmental offenders?

Available defences include the absence of risk for human health or the environment, adequate existing emergency procedures and prevention measures, rapidly implemented remedial measures and long-term prevention measures.

Liability in share sale/asset purchase

What rules govern the transfer of environmental liability in share sales and asset purchases?

Private law agreements for the transfer of environmental liabilities that are set out in the environmental code may be effective between their signatories, but will be ineffective vis-à-vis the authorities. Environmental authorities will turn to the operator or permit holder as the liable party for compliance and remediation issues and generally not to the property owner or mother company, except in specific circumstances where they have been proven to be at fault. The parties will thus need to tailor their agreements, bearing in mind the officially exposed liable party (the operating or permit holding entity will generally not change in a share sales, whereas it may in an asset purchase).

Operators and property owners that wish to sell their site on termination of their activities may find a third-party applicant, which is willing to voluntarily take over responsibility, carry out the remediation process and officially become the new liable party vis-à-vis the authorities. This process, introduced in 2015 in the French Environmental Code, is supervised by the authorities, which will review the remediation plan and require that the third-party applicant provides financial securities to cover potential non-performance.

What environmental due diligence measures are recommended before concluding share sales/asset purchases?

It is recommended to conduct:

  • a compliance audit, including vis-à-vis regulations that are yet to be implemented (especially as the environmental regulations are rapidly evolving); and
  • soil and groundwater investigations taking into account the French national methodology on the management of contaminated land. The consultant chosen should fully understand the French national methodology on the management of contaminated land, especially since such methodology, initiated in 1999 and substantially reformed in 2007, was further updated in April 2017.

Lender liability

Can lenders be held liable for environmental offences?

Not in this sole capacity: environmental offences are found by environmental authorities, which will regard the operator or permit holder as a liable offender.

Reporting and disclosure obligations

Required reporting

Under what circumstances must environmental damage be reported to the authorities?

Any incident or accident occurring at a facility classified for environmental protection purposes (ICPE) must be reported to the environmental authorities as soon as possible. A report must be further issued describing:

  • the circumstances and causes of the event;
  • its effects on human health and the environment; and
  • the measures implemented and contemplated to avoid a similar event in the future, and to prevent its medium or long-term effects.

Publication

Is information on environmental damage/compliance available in a public register?

The CEDRIC database on ICPEs and some local prefectures publish injunctions against industrial operators with some even providing templates for complaints by third parties against ICPE operators. However, the publicly available information is generally focused on ICPEs that are subject to authorisation and is generally not up to date. The Analysis, Research and Information on Accidents database also provides feedback on technological accidents which have occurred during the previous year.

Audits

Are regular environmental audits required?

Monitoring duties have been reinforced over the years for ICPEs and generally include the provision of regular reports on discharge levels and controls (including by independent certified contractors at the operator's cost). Operators are also expected to report their discharge and waste volumes to national registries annually. Regarding soil and groundwater condition, a baseline report must be carried out at plants designated under the EU Industrial Emissions Directive (2010/75/EU). Environmental impact studies must be updated if a substantial change of operating conditions is contemplated. Hazard studies, where necessary, must be updated every five years.

Disclosure

What environmental disclosures are required in sales transactions?

Extensive environmental disclosures are required in any sales transaction, as failure to do so may render environmental representations, as well as warranties and related liability transfers, ineffective.

Specifically in any real estate sale, the seller has an extensive duty to inform its buyer of present and past industrial activities, and of related risks, soil, groundwater and waste issues. If the seller fails to do so, the buyer may claim for rescission of the sale, reimbursement of part of the price of sale or remediation at the seller’s cost (if not disproportionate to the price of sale).

The seller also has a duty to provide the buyer with information on:

  • natural and industrial risks;
  • soil information sectors (which are currently delineated at local level); and
  • various studies regarding the environmental condition of the buildings (with respect to asbestos, lead, termites and fungus).

Insurance

Coverage

What types of environmental insurance are available and what do they cover?

Liability insurance for industrial operators generally covers only damage to third parties and to the environment resulting from accidents.

Is environmental insurance mandatory and/or commonly purchased?

Most insurance companies offer other types of tailored cover for prevention and remedial measures, environmental investigation and litigation costs and post-remediation discoveries. However, these cover policies are not mandatory and although this market has developed over the past decade, those specific insurance covers are not commonly purchased.

Tax

Taxes

What environmental taxes are levied in your jurisdiction?

Environmental taxes are mainly based on energy consumption (with a specific focus on fossil fuels via the tax on the consumption of energy), on transport (with various regimes aiming at improving the energy and environmental performance of vehicles and favouring carbon-free transport) and on polluting activities (with a specific focus on waste via the general tax on polluting activities currently being reformed to favour recycling and recovery over final disposal). Water agencies also levy royalties on water extraction and activities that may impact on water resources, the revenues of which are used to support water protection initiatives from municipalities, industrial and agricultural operators.

Climate change issues

Emissions, renewables and efficiency

What regulations, targets and/or incentive schemes are in place to:

(a) Reduce greenhouse gas emissions?

France launched a Climate Plan for 2004-2012, which was effectively reinforced in 2009 after several laws were enacted to implement incentive taxes for energy savings, extend punitive taxes for certain categories of polluting activity and vehicle or, in the construction sector, encourage energy-efficient buildings and renovations. A new Climate Plan was launched in July 2017, among other things, to transpose the Paris Agreement into national law to make it effectively irreversible and reinforce incentive taxes and premiums.

(b) Promote renewable energy/energy efficiency?

The Energy Transition Law of August 2015 sets out ambitious targets for the increase of renewable energy sources by 2030. Financial incentives include an additional premium paid to the renewable energy producer (as compensation for the difference between its actual income and a reference market price). Regulatory incentives include an increased authorisation threshold (from 12 to 50 megawatts), clearer litigation rules for offshore wind farms and simplified bids.

For the promotion of energy efficiency, the Energy Transition Law also introduced various incentive mechanisms for the renovation of existing buildings, including tax credits, reduced value-added tax, energy-saving certificates and premiums (eg, eco-loans).

Biodiversity conservation

Regulations

What regulations are in place to protect biodiversity and natural areas?

Regulations for the protection of biodiversity and natural areas are mostly initiated and coordinated at EU level. France had also launched a first Biodiversity Strategy in 2004, however, it did not reach the objective set out in the 1992 Convention on Biological Diversity to reduce the rate of biodiversity loss significantly by 2010. A Law on the Recovery of Biodiversity of Nature and Landscapes was finally passed in August 2016 (previous laws on the protection of nature and of landscapes dated back to, respectively, 1976 and 1993). From a legal perspective, the new statute provides a legal framework for the case law-derived indemnification of ecological damages and introduces the ‘non-regression’ principle (according to which environmental protection shall only improve) and the ‘ecological solidarity’ principle (in order to reinforce the interactions between biodiversity preservation and human activities in local territories). The statute also provides opportunities for brownfield land to potentially qualify as natural compensation units.