In France, the main provisions regarding environmental protection are included in the French Environmental Code, which contains a legislative part and a regulatory part. However, there are additional implementation provisions that have not been codified in the French Environmental Code. Please note that the mining regulation is provided in a separate code – the French Mining Code – which is not covered in this guide. Some fundamental principles are also included in the French Environmental Charter.

Key Policies

A main aspect of the French environmental law relates to the classified facilities regulation. An industrial or agricultural facility that could have an impact on the environment is usually subject to this regulation. French law lists the activities that are subject to regulation (nomenclature) and establishes thresholds for declaration, registration or authorisation of those activities – all of which are discussed further in 3.2 Environmental Permits. The regulatory authorities may impose requirements on regulated facilities or activities.

A similar regulation provides that an activity affecting waters (surface waters and groundwater) can be subject to declaration or authorisation from the relevant authorities. Those authorities may impose some requirements on regulated activities.

Another main aspect of environmental regulation concerns waste management. The governing principle is that waste producers or owners are legally responsible for collection, elimination and recycling. Waste producers or holders must be able to document the final destination of waste as well as the method of disposal.

Key Principles

The French Environmental Charter enshrines the fundamental principles of environmental protection at a constitutional level. The precautionary principle states that, if an activity is likely to cause environmental harm, measures to avoid it must be implemented prior to that activity being taken. The right to live in a healthy environment, the right to environmental information, and the duty not to harm the environment, to preserve it and repair the damage are also contained in the Charter. The “polluter pays” principle proclaims that the costs resulting from pollution must be borne by the polluter. The prevention principle serves as a basis for regimes of declaration, registration or authorisation of potentially polluting activities.

The Charter also sets out the principle of sustainable development as a central objective of public policies. Finally, attempts have been made to include in the first article of the Constitution that the state promotes all actions in favour of climate and biodiversity protection. The proposal issued by the Citizen’s Climate Convention failed, as both Chambers of Parliament were unsuccessful in agreeing on a common text proposal.

Additional principles are defined in the French Environmental Code and embody legal concepts such as the principle of participation, which allows affected people to express their opinion on a project with potential environmental impacts. Another key principle is “non-regression”, which implies that measures protecting the environment can only be improved with regard to constant scientific progress, and shall not be reduced.

In France, the governmental body in charge of environmental policies is the Ministry for Ecological Transition and Territorial Cohesion (Ministère de la transition écologiqueet de la Cohésion des territoires). Its missions mostly involve the drafting of environmental regulatory provisions. 

The Ministry is directly represented throughout the country by the prefects of the departments (local subdivisions of the French regions), which are the main regulatory authorities. They are responsible for issuing orders or authorisations relating to the activity of regulated facilities, and for ensuring compliance with regulatory requirements. In carrying out these functions, the prefect relies on local administrative services, such as the Regional Directorates for the Environment, Planning and Housing (DREAL) in the region as well as the Departmental Direction of the Territories (DDT), which all come in support of those authorities and participate in the local implementation of the national policy.

The Energy and Climate Law (Loi Energie-Climat of September 2019) specifies the role of the Environmental Authority (Autorité Environnementale), which is the advisory body regarding projects that are likely to affect the environment. Its role is to give an opinion on the quality of the environmental impact assessment; this is further discussed in 3.2 Environmental Permits.

French administrative courts stated that the Environmental Authority shall remain totally independent and be different from the authority in charge of delivering the permit. In this context, a decree was adopted in July 2020, making the prefect of a region the official authority in charge of case-by-case decisions (ie, when the environmental impact assessment is not automatically applicable).

Finally, other specific agencies play a role in some defined sectors – for example, the Nuclear Safety Authority (ASN) or the Regional Health Agency (ARS).

In 2019, one large agency was created regarding all biodiversity matters: the Office Français de la Biodiversité (OFB). This law of July 2019 (commonly referred to as Loi OFB) aims at better protecting biodiversity by merging under a single agency all the competent services for the preservation of French ecosystems.

Under French law, the environmental authorities have investigative and access powers with respect to environmental incidents and breaches of law/permits. They have both administrative and criminal enforcement rights. Since 2012, inspections and investigations by regulatory authorities have been harmonised and simplified.

Administrative Inspections

The French Environmental Code provides that administrative inspections can be performed under certain conditions. When the administrative authority conducts such inspections, it has several powers regarding access to the facility and the documents it may request. The Loi OFB of July 2019 gives additional powers to environmental inspectors, with competence to take samples and place them under seal, which can be of use as proof. The new European Public Prosecutor, Environmental Justice and Specialised Criminal Justice Law of December 2020 has extended their competence even more.

If irregularities are found during the inspection, the administrative authority can impose sanctions. However, such authorities cannot impose administrative sanctions without a due process and formal notice. After the visit of the inspector, the operator receives a copy of the report and thus becomes aware of the case against them and can respond to the prefect. The operator may then receive a formal notice requesting them to comply with the law. Before actual sanctions are taken, the operator is given the chance to comply. If nothing is done, the regulatory authority will proceed with sanctions.

The Loi OFB of July 2019 had introduced a new criminal offence in the Environmental Code: in the specific case where an operator, who has conducted their activity without authorisation or certification, is being ordered by the regulatory authority to take remediation measures in the context of the cessation of their activity, and does not respect this order, the sanction might result in a two-year prison sentence and a maximum fine of up to EUR100,000 for the operator.

Negotiated settlements are not allowed under French law. In fact, the authorities cannot agree to either reduce sanctions or decline to bring an enforcement action in their role as administrative police. In concrete terms, authorities neither contractually agree nor settle on a limitation of their powers in this field.

Criminal Investigations

Criminal investigations are accomplished by regulatory authorities in the case of a breach of environmental law, in a manner that must be conducted according to the French Environmental Code. In the event of a criminal investigation, the inspection performed is similar to the administrative procedure but the prerogatives of the inspector are extended as they may, for example, conduct identity checks.

Similarly, the inspector issues a report to the prosecutor and remains, with the prefect, at the prosecutor’s disposal for further investigations. The inspector may, for instance, interview the operator on behalf of the prosecutor. Since the Loi OFB, environmental inspectors will also be able to collaborate with other police services for a given case, but they will remain entirely autonomous in their investigations. The new European Public Prosecutor, Environmental Justice and Specialised Criminal Justice Law of December 2020 enables these environmental inspectors to have the same competences as judicial police officers for the judicial investigations they lead.

These laws illustrate an overall harmonisation of prerogatives among judicial and environmental inspectors, where the latter have been given much more power to investigate and punish environmental offences. In this respect, a decree of April 2020 institutionalised the right of prefects to derogate from certain national standards in the fields of environment, agriculture and forestry, among others, under some restrictive conditions.

Requirements for Environmental Permits

Under French law, an environmental permit may be required, depending on the project. The classified facilities nomenclature and the water activities nomenclature provide categories and thresholds that determine the legal framework applying to the project (declaration, registration and authorisation for classified facilities; declaration and authorisation for water activities). Facilities with the highest environmental risks fall under a special category, determined by the Seveso Directive (high or low rank) and require specific controls and prescriptions.

An environmental authorisation (ie, a permit) is required for activities that materially affect protected interests listed in the French Environmental Code (nature and the environment, water, health, safety, agriculture, historical monuments and archaeological heritage).

Recently, classified facilities and water regulations have been simplified. Since March 2017, all the procedures necessary for projects subject to authorisation under the classified facilities regulation or the water regulation have been merged into a single environmental authorisation.

This environmental authorisation thus covers other specific authorisations when they are required for the project, subject to classified facilities or water activities regulations (eg, land-clearing activities, derogation for destruction of protected species, greenhouse gas emissions allowances). However, the building permits are not included in this broad authorisation and instead are issued separately.

In order to improve the efficiency and speed of the process, the procedure was standardised in 2019 for every project application. Since then, prospective operators must fill in an appropriate form called CERFA. This system is part of an overall tendency supported by public authorities to dematerialise administrative procedures (ie, to aim at a paperless, computerised system).

For each level of environmental permit, the French Environmental Code provides the criteria and procedures to obtain the permit.

Firstly, the declaration regime only requires reporting the facility to the regulatory authorities before the implementation of the activity. The procedure must be completed entirely online since 1 January 2021.

Secondly, above the declaration threshold, some facilities must submit an application in order to be registered by the regulatory authorities. Since 1 May 2022, the registration can be submitted online. This is an alternative to paper, and not an obligation. Under those two regimes, the administrative authority can order additional prescriptions on the projects if deemed necessary.

Thirdly, some facilities are required to file an authorisation application, which will be reviewed by the regulatory authorities. The French Environmental Code states that construction projects or any intervention in the natural environment that are likely to have significant effects on the environment or human health must undergo an environmental impact assessment.

The Environmental Impact Assessment Directive sets criteria and thresholds integrated in French law and determines whether the projects are likely to have notable consequences. Depending on their expected impact, not all projects have to fulfil the same assessment obligations. The environmental assessment mechanism was modified in both 2016 and 2018. Now, projects with a potential impact on the environment must undergo either a systematic environmental assessment or an assessment after a case-by-case review depending on certain thresholds.

After a public inquiry, regulatory authorities issue the authorisation with prescriptions or refuse it with justifications.

In order to appeal permitting decisions, it is mandatory to lodge a claim before the administrative court within two months after the permitting decision for the operator, and four months for interested third parties.

Finally, a law of 2019 has introduced the concept of “industrial platform” (Plateforme industrielle) in the Environmental Code. This legal innovation does not create a new category of permits, but rather provides a new legal framework for a concentration of facilities within the same restricted geographical area, which exercise similar activities and thus can pool the administration of some goods and services required for their activity. This concept aims at simplifying the day-to-day operations of those sites. From an environmental point of view, the pooling of their devices enables the facilities to reduce their waste production and their energy consumption, and to optimise their safety checks.

Transferring Environmental Permits

Under French law, an environmental permit can generally be transferred. The change in the permittee is contingent upon the declaration by the new permittee to the regulatory authority within three months after the transfer.

While most permits can be transferred through a simple declaration, the transfer of the environmental authorisation for facilities requiring financial guarantees (landfilling, quarries or some other polluting activities) must be authorised by the relevant prefect. The new operator must file an application for the transfer in order for the regulatory authorities to review the financial guarantees. If the authority authorises the transfer, it may impose additional prescriptions or requirements.

Penalties/Sanctions for Breach

The French Environmental Code includes both criminal and administrative sanctions to punish the breach of permitting requirements.

Firstly, if one runs a facility without an environmental authorisation, the criminal sanctions include a one-year prison sentence and a maximum fine of EUR75,000, which is multiplied by five when the offender is a corporate entity.

Secondly, independently and cumulatively, the regulatory authority may (i) require, by issuing a formal notice, compliance with the regulation within a time limit, and then (ii) impose administrative sanctions on the offender. In addition to the suspension of the facility’s activity, the regulatory authority may hold a deposit until the required work is completed. The authority can also have the prescribed measures carried out automatically, in place of the person summoned, and at their own expense. In order to ensure that the measures will be fully implemented, the regulatory authority can impose a maximum fine of up to EUR15,000, or a daily penalty payment of up to EUR1,500 until compliance is achieved.

According to the new Climate and Resilience Law of August 2021, the sanction can be more severe when a risk of harmful and lasting harm to the environment results from this offence.

The fines and penalty payments shall take into account, in particular, the importance of the harm caused to the environment.

In French law, three types of liability can be imposed on operators and polluters.

Environmental Liability

There is an environmental liability attached to administrative obligations to protect the environment. Such liability is imposed by regulatory authorities on operators of facilities or activities subject to environmental laws and regulations. The regulatory authorities evaluate the damage and the measures taken to prevent or mitigate it to determine liability.

Civil Liability

Civil liability in environmental matters occurs for torts or negligence resulting in pollution. The causal link between the harmful event and the damage has to be proven and may result in the award of compensatory damages (dommages et intérêts). Besides, the French Civil Code embodies the ecological prejudice reparation concept, codifying the Erika case resolution (see 9. Civil Liability). Additionally, it is possible to be held liable for environmental damage under contractual liability. Such liability would likely arise in land purchases, when a seller retains important information regarding the facility and the industrial history of the land (see 16. Transactions).

Criminal Liability

Criminal liability applies to both individuals and corporate entities. The head of a company may be criminally liable for the actions of the company. Sanctions can include imprisonment, a criminal fine, etc. The Climate and Resilience Law of August 2021 introduced new environmental offences, notably:

• a general offence of environmental damage sanctioned by a five-year prison sentence and a EUR1 million fine;
• an uncontrolled waste-dumping offence sanctioned by a three-year prison sentence and a EUR150,000 fine; and
• an “ecocide” offence, introduced in the case of a voluntary environmental endangerment, sanctioned by a ten-year prison sentence and a EUR4.5 million fine.

In addition, two more offences now sanction the endangerment of the environment when caused by the breach of a formal notice. The sanction is a three-year prison sentence and a EUR250,000 fine.

Administrative obligations and liability for historic incidents or damage may be transferred from one operator to another if the new operator is conducting the same activities. Therefore, the new operator will be liable for the pollution relating to the continued activity even if they were not the operator at the time the pollution originated (for instance, the transfer of a gas station to one operator from another). In other words, the new operator is responsible for damage caused after it purchases the assets but it is also liable for the activities of the prior operator, as long as the damage relates to the same types of operations.

Liability for the pollution from the former operator that is unrelated to the continued activity is not transferred. The landowner cannot be liable for historic environmental incidents or damage, except under specific situations. In that regard, if none of the above-mentioned former stakeholders can be identified, the owner of the contaminated land may be liable if their negligence or participation in the pollution can be proven. It means that the Code does not impose strict liability on an owner of land if they did not cause the pollution and were not negligent.

Administrative Liabilities

Operator’s liability

In relation to the administrative obligations, the French Environmental Code provides that, when the classified facilities regulation applies, the prefect may order any measure necessary to address a threat to the environment. Similar provisions are applicable under the water regulation or to any type of environmental damage supervised by a regulatory authority.

State’s liability

Besides, interested third parties (eg, neighbours of a classified facility) may seek the state’s legal responsibility for the lack of action taken to protect the environment. Such a situation arises, for instance, when the prefect does not exercise sufficient control over a classified facility’s activity, which consequently generates pollution. Public authorities can elude liability if they demonstrate that they have conducted the necessary checks to ensure the given facility’s safety.

On a more general note, one shall take into account the overall tendency to seek state liability for its inaction or the insufficiency of the latter regarding environmental protection. For instance, state liability has recently been recognised in several landmark cases. The Administrative Supreme Court found the state liable in several cases regarding the insufficiency of the measures enshrined in the Protective Atmospheric Plan, and the state was ordered to pay a penalty of EUR10 million for every six months of inaction. The measures implemented by the state were not sufficient so the Administrative Supreme Court renewed the penalty payment on 17 October 2022. The latter is supposed to pronounce a new decision in 2023, and possibly rule again a penalty payment if the measures are still considered insufficient. In another case, the same court found the state liable for the insufficiency of implemented measures regarding the reduction of greenhouse gases. As a remedy, the court found that the state ought to act appropriately.

Civil liability

The key concepts of civil liability include “disturbances of the neighbourhood” and “control over the things under one’s guard” (see 9.1 Civil Claims).

Under these concepts, which are similar to the concepts of nuisance and strict liability under most US laws, an operator can be held liable in civil terms for harms caused to another in the context of an environmental incident or damage even if it has complied with all the requirements provided in its environmental permit. The plaintiff must demonstrate that one of their interests was affected by the operator’s actions.

What is more, the French Civil Code sets out the ecological prejudice reparation concept (see 9. Civil Liability) and provides that any person who causes an ecological prejudice must repair it in kind.

A corporate entity may be liable for environmental damage or breaches of environmental law when acts of negligence or faults are demonstrated. Under French criminal law, the liability of the individual does not exclude the liability of the corporate entity. The main difference is in relation to the potential penalties. The French Environmental Code provides that the maximum fine for a corporate entity is five times the sanction for an individual.

In addition, the French Environmental Code refers to the French Penal Code for the sentencing of corporate entities. The European Public Prosecutor, Environmental Justice and Specialised Criminal Justice Law of December 2020 provides the possibility for corporate entities whose actions have harmed the environment to pay a public fine, in the framework of an environmental judicial agreement. In other words, this law establishes a transactional protocol allowing for the payment of a fine, in the event of an environmental offence. Moreover, the same law has created a specialised court (juridiction spécialisée) in charge of environmental disputes.

Concerning the interaction between corporate law and environmental law, a 2019 law called the Plan d’Action pour la Croissance et la Transformation des Entreprises (“Loi PACTE”) has created obligations for companies. It imposes that any decision related to the company management shall take into account corporate social responsibility (CSR) and environmental considerations (which were not a compulsory obligation before). Voluntary firms also have to explain their raison d’être to justify what they can bring to customers on a competitive market. Companies should be mindful of their advertising duties, as the August 2021 Climate and Resilience Law imposes rules on this matter. For example, companies cannot claim that their products are carbon neutral if they do not demonstrate it.

Additionally, a company’s board of directors, when setting the annual guidelines, shall take into account all the environmental and social stakes.

Moreover, a law of March 2022 specifies the rights of whistleblowers and the protection they enjoy, as well as the obligations of the company, such as the prohibition of retaliation against the whistleblower and their relatives.

Since 2010, the French Environmental Code provides that a parent company may be held financially liable for the remediation measures when it wrongfully contributes to its subsidiary’s bankruptcy.

Directors and other officers can be held personally liable for environmental damage or breaches of environmental law committed by the company if the offence was the result of their personal conduct (neglect or fault in causing the offence) or if it can be shown that they had personal knowledge of the offence and did not act accordingly. This standard is not specific to the environmental area.

The level of authority of a director, officer or executive is not taken into account when finding an individual liable, but rather the fact that they were acting in the capacity of a company’s representative or acting on the company representative’s instruction or delegation. In the latter situation, the judge will carefully examine the scope and regularity of the delegation or representative’s instruction.

The penalties for environmental offences range from a fine of up to EUR100,000 to a prison sentence of up to two years. Additional penalties, such as prohibition to do business in a similar area for a time period of up to five years, may also be imposed.

Global liability insurances for company directors can cover defence expenses and damages arising from civil procedures, thus including environmental matters, and can sometimes benefit the spouse and/or inheritors or legal representatives. Criminal fines are not covered by liability insurances. The company will be the signatory of the insurance contract for the benefit of all natural persons likely to be held personally responsible and therefore who had, have or will have an executive or representative position in the company or in its subsidiaries.

Financial institutions and/or lenders can be held liable for damages arising from projects they fund, depending on their level of involvement and their awareness of the risks. The same liability regime applies to financial institutions as to any corporate entity.

Furthermore, investing in environmental protection is a tremendous opportunity for banks and private investors to improve their reputation. The French government has demonstrated its will to promote green finance by launching Greenfin, a label that aspires to be the first state certification for green finance. This certification aims at ensuring transparency and the environmental involvement of financial products. In June 2020, a European regulation established a framework to encourage sustainable investment, by setting series of environmental objectives that allow an economic activity to be labelled “environmentally sustainable”.

Since financial institutions and/or lenders’ liability is not specific to environmental project funding, these entities should be aware, just like any other corporate entity, of the risks taken in becoming involved in their borrower’s projects and of the level of involvement. The more involved a lender or financial institution is, the more likely it could be held liable for a damage or breach, including environmental damage or breach. This is why thorough due diligence is necessary (see 16.1 Environmental Due Diligence). In this regard, the Energy Climate Law of 2019 requires investment companies to include in their policies information about the risks associated with climate change and biodiversity.

Some of the key concepts of civil liability applied to the environment are “disturbances of the neighbourhood” and the “control over the things under one’s guard”. The former provides that no one should cause excessive damage to their neighbour, even if an environmental permit authorises the industrial activity. However, in the context of environmental harm, the theory of “prior occupation” applies under certain conditions: one could not bring claims over a nuisance that already existed prior to their occupation of the neighbouring site. The second concept provides that a person may be held liable for the harms caused by the things under their effective control. Moreover, the French Civil Code provides for tortious liability, which may impose an obligation to repair the damage resulting from wrongful acts or negligence.

Finally, since 2016 the French Civil Code states that anyone who causes environmental damage can be held liable and be obliged to repair it in kind. If impossible, the reparation ought to be pecuniary. This provision incorporates what is referred to as a “pure” environmental damage, meaning that it is no longer necessary to prove the violation of a “human interest” (for instance, financial loss, physical injury, property damage).

Under French law, exemplary or punitive damages cannot be awarded. This category of damages would be a violation of the principle of full compensation of prejudices. Indeed, under French law, the French judge must contribute to the repair of the full extent of prejudice caused, nothing more.

A 2016 law created the possibility for groups protecting collective interests to go to court in the event they have suffered the same damage. Indeed, the French Environmental Code states that a group action is possible when several people in a similar situation suffer from an environmental damage, caused by the same person and having for common origin a breach in legal or contract-based duties. Such legal action may seek the cessation of the violation and/or the reparation of the damage.

Regarding environmental class actions, environmental groups that are “approved associations” (which is a specific status) can lead a group action. Approved associations working for the defence of those who suffered physical injury damage or defending an economic interest may also do so.

The landmark case establishing civil liability for environmental damage was the Erika case of 2012 regarding the oil spill caused by Total’s tanker, Erika. In this case, in addition to criminal liability, civil liability has been recognised. In its ruling, the court recognised for the first time the legal concept of an ecological prejudice. Since then, the Paris administrative court found the French state liable for the ecological prejudice related to climate change endured by several NGOs.

Climate litigation is currently considerably increasing and this trend is certainly going to take on a greater importance in years to come. Gradually, liability regarding climate change and global warming is increasingly being sought: for example, the French state has been found liable for its lack of climate action, as mentioned in 5.2 Types of Liability and Key Defences.

In addition, the fire at the Lubrizol chemical products plant and warehouse in September 2019 will surely become a major civil and criminal case and is giving rise to a governmental action plan for the prevention and the management of industrial risks, generating regulatory changes in the prevention and the management of accidents on hazardous sites (see 15.1 Self-Reporting Requirements).

It is possible to transfer or apportion liability for incidental damage or breaches of law through a contract between two private parties. This type of private contract does not affect private parties’ potential liability to regulatory authorities.

There is also one possibility allowing the last operator to transfer its administrative liability. Indeed, regarding liability for pollution caused by a classified facility, the French Environmental Code provides a mechanism that allows an “interested third party” (tiers demandeur) to conduct remediation under the provisions issued by the regulatory authority. This results in the transfer of the last operator’s liability to the purchaser. The operator has a residual liability if the third party cannot fulfil its new obligations.

Environmental insurance contracts are available for events that can occur in the course of the operation of an activity, including events causing ecological prejudice. There is also a special insurance for historic pollution, but it only covers currently unidentified pollution and is yet to be further developed in France. Depending on the contract, the insurance may cover, for example, clean-up costs, operating losses and legal costs.

First, one of the key laws governing contaminated land in France is the classified facilities regulation. This regulation addresses the contaminated land obligations in the context of the cessation of activity.

There is no definition of contaminated land under French law. However, a 2017 French methodology, partly introduced in the French regulation by an August 2021 Ministerial Decree on the end of operations regarding classified facilities, provides criteria in order to determine the environmental condition according to which a site must be managed, if needs be.

The general approach taken by regulatory authorities is a risk versus use approach (approche risque par rapport à l’usage – the sanitary conditions of the site must be compatible with the use of the site through a Human Health Risk Assessment) and in respect of the protected interests under the French Environmental Code.

The remediation is mandatory at the end of the facility operations. Remediation goals are made in a manner consistent with the expected future use of the site, which is determined in accordance with the French Environmental Code. If the future use is most frequently an industrial use, a different use can be suggested by the operator, regarding the planning regulation. Usually, the mayor (le maire) and the landowner, when different from the operator, are consulted on the use suggested by the operator to the prefect within the determination of the future use of the site. 

Under the classified facilities regulation, every operator is responsible for its own activities. Therefore, several operators can be held responsible by the regulatory authority for parts of the remediation when several activities have generated pollution on the same site – for example, the gas station will be responsible for the fuel pollution and the industrial laundry will be responsible for the chemical pollution.

Secondly, the French Environmental Code provides a “contaminated land” section that describes the specificities of the remediation mechanism and the obligations of each stakeholder. On sites where pollution occurs or might occur as a threat to the public health or safety, the regulatory authority may implement the necessary remediation works at the expense of the person responsible for the remediation. The regulatory authority may also charge a deposit until the remediation works are finalised.

Traditionally, the last operator of an industrial site would only be responsible for remediation necessary to allow safe operation of continued industrial uses, while a person seeking to change the use of the site would be responsible for the additional remediation necessary to permit the change of use. Therefore, when remediation has properly been carried out, the person who changes the use must provide measures to manage the pollution in order to ensure that the land is compatible with public safety or health. Additionally, consultancy firms (bureaux d’étude) are increasingly involved in cessation of activities procedures, as shown by a December 2020 law on the simplification of public action. An August 2021 Decree further developed these consultancy firms’ involvement as they now have to deliver several certifications for the operator of an industrial site to prove to the regularity authorities that they complied with their requirements. 

Finally, it is also notable that the waste regulation does not apply to contaminated land anymore, except for the provisions addressing the waste present on the site or the excavated soils.

France is involved in international climate negotiations in the framework of the United Nations Framework Convention on Climate Change (UNFCCC). In 2015, France hosted the 21st Conference of the Parties (COP21), which resulted in the adoption of the Paris Agreement. Key policies, principles, laws and case law relating to climate change in France largely derive from this legal framework. At the national level, the Citizen’s Climate Convention, whose proposals were released in June 2020, aimed at reducing carbon emissions in keeping with social justice. The Climate and Resilience Law of August 2021 provides that France aims at respecting the reduction goals set in the Paris Agreement, thus enacting the Citizen’s Climate Convention proposal. In November 2021, during COP 26, France agreed to reduce gas emissions by 2030, and to reduce the use of fossil fuels by signing the Glasgow Pact.

Key Policies

Reduction of atmospheric concentrations of greenhouse gases in order to prevent dangerous anthropogenic interference with Earth’s climate system is considered as a national priority. This goal is implemented through global targets of reduction of greenhouse gas emissions and sectoral policies. In September 2022, French president Emmanuel Macron launched the National Council of Refoundation (Conseil National de la Refondation), which will propose reforms for the ecological transition, in particular.

Key Principles

To meet the objectives of the Paris Agreement and the commitments of greenhouse gases reduction made by France through its Intended Nationally Determined Contribution (INDC), the French Climate Plan unveiled in 2018 sets the goal of carbon neutrality by 2050 in order to contain global warming below 2°C.

The Climate Plan is divided into several focus areas: thermal renovation, clean mobility development, encouragement and promotion of a circular economy. It also aims at achieving carbon neutrality by 2050 through banning new hydrocarbon exploration projects and reinforcing ecological taxation (increase in the price per ton of carbon dioxide – CO₂ – used as a basis for the calculation of internal consumption taxes).

Some other objectives include the transformation of agricultural systems to adapt to climate change, the strengthening of international mobilisation, and in respect of the financial commitments of the Paris Agreement, notably towards the least developed countries.

Key Laws

Key laws relating to climate change are increasing. Law No 2009-967, dated 3 August 2009 (Grenelle II), and Law No 2015-992 of 17 August 2015 on the Energy Transition for Green Growth are both codified in the French Environmental Code and the French Energy Code and set the guiding principles. In 2019, the law “Energie Climat” (discussed in 2.1 Key Regulatory Authorities) has introduced in the French Energy Code the concept of “ecological and climate emergency” so that all climate policies must be conducted with high environmental standards according to this objective.

The August 2021 Climate and Resilience Law has introduced new sets of climate policies on food, work and production, transport, housing and criminal law matters. It is meant to provide updated regulation to tackle the climate crisis. The law also established the objective of zero net artificialisation of the soil, which aims at slowing the pace of urbanisation, in favour of natural areas. Many decrees were taken in 2022 to implement this law, such as the implementation of Low Emission Mobility Zones (Zones à faibles émissions mobilité, ZFE-m) the goal being to reduce emissions in large urban areas. They are mandatory in agglomerations of over 150,000 inhabitants.

Legal goals are determined by the French Environmental Code, which contains a legal target for greenhouse gas emissions reduction of 40% between 1990 and 2030. The proposals of the Citizen’s Climate Convention that have partly been enacted in the August 2021 Climate and Resilience Law aim at achieving this goal. For 2021–30, the Ministry for Ecological Transition and Territorial Cohesion has issued a series of objectives aiming at reducing greenhouse gas emissions by 43% (by comparison to 2005 levels), with a particular focus on aviation and industry. In order to involve every sector, thematic working groups, composed of actors from different sectors such as sport, transport or industry, were created in September 2022 to discuss the reduction of their energy consumption.

The Environment Code provides for a series of reduction objectives contributing to the overall objective of reducing greenhouse gas emissions (especially regarding energy consumption). In respect of the ambition to emancipate the country from fossil energy, the Energie-Climat law of 2019 sets a reduction by 40% of the consumption of fossil energy by 2030, and has anticipated the shutdown of the four remaining coal-fired power plants. However, the recent context of the war in Ukraine threatens the security of energy supply, forcing France to reopen coal-fired power plants, which goes against those goals.

Historically, asbestos was a frequently used substance in construction in France. Therefore, exposure to asbestos is widespread and is the most common cause of workplace death.

Use of asbestos and all products containing asbestos is strictly forbidden in France subsequent to a decree issued in 1996 based on reports from the Labour and Social Affairs Department, the Housing Department and the Health Department, among others.

Protection measures for the general public against asbestos are provided in the Public Health Code and the Construction Code. They range from organising research and monitoring of the state of conservation of buildings containing asbestos, to setting out the rules in connection with responsibility of building/apartment owners, and organising the communication of technical documentation between participants (landlords, construction companies, lessors, etc).

The Labour Code also provides a set of rules to protect workers from inhaling asbestos in the course of their normal work activities in direct connection with asbestos products (dismantling or handling).

Physical harm or injury does not have to be established for a claim in damages. Since 2010, French courts recognise the existence of a specific anxiety prejudice for workers who have been exposed to asbestos during the time of their past work activities and who are expecting a possible diagnosis of an asbestos-related illness.

The key laws governing waste come from an EU Directive on waste management, which was incorporated in the French Environmental Code. The main principles and objectives of those regulations are to limit the production and the toxicity of future waste at their source, to organise waste management so as to be respectful of the self-sufficiency and proximity principles, to add value to waste through recycling and to proceed to the disposal of waste as a last recourse solution. Therefore, there is a hierarchy in waste management.

Traditionally, the person responsible for waste management is either the waste producer or the waste holder.

In regard to the regulatory inspections, the mayor is the regulatory authority for the application of the waste regulation, except if the waste is subject to the classified facilities regulation. In that case, the prefect will be the competent authority to take action.

Circular economy became a priority in 2020, particularly with a law of February 2020, which aims at reducing waste by improving its recovery and recycling, and undermining planned obsolescence. This law also provides further duties for producers: under this new legislation, there will be a global prohibition of the destruction of unsold products in order to preserve resources. This law also introduces a deposit return scheme in order to increase recycling and significantly reduce the amount of waste. An ordinance of July 2020 (transposing EU directives) complements this law, aiming to broaden the exit from waste status and to strengthen the management of biowaste. A law of November 2021 plans the recycling of digital sector products.

Any waste producer or waste holder is responsible for the waste management until its final disposal or recycling, even if the waste is transferred for treatment to a third party. It begins as soon as the waste is produced and extends to the final disposal or recovery and treatment of the waste.

Indeed, the person responsible for the waste has a legal obligation to ensure that the person to whom they deliver it is authorised to take charge of it and will comply with the applicable regulations.

The waste producer or waste holder may not contractually exhaust their regulatory liability, but they can obtain an indemnity from the waste hauler or treatment facility.

A 2019 decision from the European Union Court of Justice ruled that, in accordance with the precaution principle, when the hazardousness of waste cannot be determined, it must be classified and disposed of as a dangerous waste.

The French Environmental Code has provided for the principle of extended producer responsibility (responsabilité élargie du producteur, REP) since 1975. The responsibility reverts to the producer of the product, the manufacture of which ultimately results in the creation of the waste. In some sectors, producers, importers and distributors of the products, or of the materials used in their production, may be required to contribute or to provide for their disposal or recycling.

About 30 sectors are now regulated. For all these sectors, producers usually have to pay an eco-contribution in order to fulfil their REP obligation. The economic circular law of 2020 has created nine new REP sectors such as building materials, cigarettes, toys, sport and handiwork equipment. In addition, a penalty is established for producers that do not meet the prevention and management objectives.

The 2020 legislation has also launched a system of economic bonuses and maluses to encourage more environmentally friendly methods of production (the use of recycled materials, of renewable resources, the durability, reparability and reuse of products, as well as the reduction of hazardous substances in the process). This system will have an impact, either positive or negative, on the final price of products, and will apply to every product that belongs to an REP sector.

The law also extends the existing obligation of the manufacturer to take back an old device, free of charge, when the consumer buys a new one. This obligation also applies to online commerce. Also, from January 2023, companies that put waste-generating products on the national market will have to inform consumers about the environmental qualities and characteristics of these products.

The operator of a classified facility must report to the regulatory authorities incidents or accidents that were caused by the facility’s operation and that may harm the protected interests listed in the French Environmental Code. The report must address the circumstances and causes of the incident or accident, its consequences on people and the measures taken to avoid a similar incident or accident and to neutralise its long and medium-term effects.

Since the Lubrizol incident (see 9.4 Landmark Cases), a great deal of work has been carried out to improve crisis management and information, such as a September 2020 decree aiming at improving the prevention and the management of industrial risks, within the facilities in which dangerous substances can be the cause of major accidents. The decree introduced new notions relating to hazardous authorised facilities, especially when they go through substantial modifications.

For activities which affect water, the mayor and the prefect must be informed as soon as possible by any person aware of any incident or accident that endangers the public safety or the quality, the circulation or the conservation of water. The person who caused the incident must, as soon as they are aware of it, take or have measures taken to stop the cause of the danger or the harm affecting water, evaluate the consequences of the accident/incident and solve it.

Under French law, the public has the right to obtain environmental information from public authorities and bodies. The French Environmental Code enshrines this principle, which applies to every interested person and to all public and private bodies with an endeavour of environmental public service, to the extent that it is not sensitive information (classified, public security, etc) and that it is related to environmental matters.

The public authorities affected by such provision are the state, regional and other local authorities, the public bodies and the person in charge of a public service that relates to the environment, under the condition that the information requested falls under their jurisdiction. The French Environmental Code provides the procedure and the conditions to obtain environmental information. It is to be noted that specific activities (waste, high industrial risks, contaminated lands, etc) are regulated by particular provisions.

The website Géorisques enables the public to be informed about both natural and technological risks. Indeed, the site gathers several databases such as the Informative Zones on Soils (Secteurs d’Information sur les Sols) or BASOL for the classified facilities. Thus, this website aims at providing the general public with knowledge on the historic pollution of a given land, and at guaranteeing the absence of sanitary and environmental risks for future land uses.

Under the French Commercial Code, some corporate entities have the obligation to annually disclose to their shareholders information relating to the entity’s corporate and social responsibility (CSR) engagements, which include management of the social and environmental consequences of its activity.

Furthermore, the Duty of Vigilance Law of 2017 creates for the parent company an obligation to implement a “vigilance plan”. It applies to two kinds of companies:

• companies headquartered in France which employ, for two consecutive years, at least 5,000 employees in the parent company and in its direct and indirect subsidiaries headquartered in France; and
• companies headquartered in France which employ, for two consecutive years, at least 10,000 employees in the parent company and in its direct and indirect subsidiaries headquartered in France and abroad.

The plan aims at controlling the corporate entity’s activities and preventing significant breaches in environmental or human rights regulations. In 2020, the first claims were lodged for failure to comply with the duty of vigilance. Moreover, in March 2020, the association Notre Affaire à Tous published a comparative legal study of the plans of 25 multinationals. This report has an informative aim and it also allows a better interpretation of the Duty of Vigilance Law of 2017. In January 2020, Notre Affaire à Tous sued Total for the breach of its duty of vigilance. The procedure is still ongoing. In March 2021, the French supermarket brand Casino was also sued by Notre Affaire à Tous for the insufficiency of its vigilance plan on deforestation issues in the Amazon rainforest.

Environmental due diligence is typically conducted on M&A, but is less frequent for financial and real estate transactions.

In general, environmental due diligence is highly recommended. It is particularly important when a classified facility is included in the deal as the environmental due diligence is the only way to identify the compliance issues regarding every environmental regulation and the liabilities issues in connection with contaminated lands.

An environmental due diligence performed by a purchaser typically ensures that the seller complies with applicable environmental regulations. In the case of a classified facility, the environmental due diligence will also check the possession and validity of the permits and licences required for the activity, as well as the fulfilment of the prescribed conditions. The buyer will also check the legal implications of the different identified risks and contingencies.

Environmental due diligence would typically include at least a Phase 1 report that relates to compliance and historical activities on the facility. The Phase 2 report (site investigations) is generally recommended. It would attempt to verify the environmental condition of the site based on actual testing of soil and/or groundwater.

When it comes to land acquisition, the French Environmental Code provides that the seller must inform the purchaser by a written statement that a classified activity used to operate on the site. The landowner must also inform the potential buyer of any danger or harm resulting from the previous facility operation. When the seller is also the facility’s operator, the contract must demonstrate that the seller provided information regarding whether or not the facility’s operation led to the use or storage of hazardous substances.

Regarding M&A transactions, there is a general duty to provide information.

A seller who fails to provide the appropriate information by voluntary omission or negligence might retain environmental liability for historic environmental damage or breaches of environmental law in the following situations.

Hidden Defects Warranty (Garantie des Vices Cachés)

In principle, the law provides for the responsibility of the seller in case of hidden defects. A hidden defect reduces or renders impossible the use of the property to the extent that the buyer would not have acquired it, or only at a lower price, had they known about it.

The buyer may then cancel the sale partially or totally. However, many contracts contain a provision excluding the seller’s responsibility for hidden defects. Such clauses are not applicable if it is proven that the seller had the knowledge of the defect at the time of the sale.

For the sale of shares, only defects affecting the use of the share would be affected by the warranty and not the ones affecting the value of the share.

Fraud (Dol)

When the seller intentionally retains information in order to mislead the buyer, the buyer may then cancel the contract. A fraud can be applied to share or asset deals.

Environmental taxation, based on the “polluter pays” principle, aims at forcing a business whose operations have adverse environmental consequences to integrate the costs of those environmental harms into their business planning.

Taxes on Energy

In 2014, the government introduced a carbon tax. The price of final products increases in proportion to the carbon dioxide emissions generated by the production, thus favouring products with the lowest emissions. Initially the tax amounted to EUR7 per ton of CO₂. It has been reassessed each year, and in 2020 totalled EUR44.60. The government decided not to increase the tax in 2020 after a year of social protests throughout the country, arguing for a fairer system geared towards climate justice. The tax rate remains unchanged to this day.

Regarding the use of electricity, any electricity consumer (regardless of whether the electricity was generated by clean energy) must pay a tax. This tax is called a “contribution to the electricity utility” (Contribution au Service Public de l’Electricité, CSPE). It contributes to subsidising renewable energies.

On the flip side, there are also tax credits available to certain activities that reduce energy consumption. The finance law for 2021 implemented tax credits for small and medium-sized businesses, helping them to finance buildings in the service sector that they use for their activities. The finance law for 2022 extended the freeze on regulated natural gas sales tariffs at their October 2021 level until the end of December 2022.

Taxes on Air Pollution

The bonus-malus on automobiles aims at changing the fleet to the lowest emitters of CO₂ vehicles by increasing the price of diesels and to a certain extent of oil motors, to encourage the production and number of electric cars. In addition, certain emissions of industrial origin (eg, polluting air emissions of classified facilities that exceed certain thresholds) are subject to the general tax on polluting activities (Taxe sur les activités polluantes, TGAP).

Taxes on Water Pollution

The tax policy on water pollution is implemented through the taxes of water agencies. It aims at limiting water pollution, covering, for example, the emission of pesticides by taxing companies discharging polluting products in a watercourse (categories and thresholds listed in the French Environmental Code).

Taxes on Waste

Finally, the “incentive pricing” of household waste was developed to reduce its quantity and to promote recycling. It is based on the “waste TGAP”, which taxes all waste stored or incinerated, by penalising the least effective methods of treatment in terms of pollution or recovery.