Study on the Polluter Pays principle and Environmentally Harmful Subsidies

In its special report on the 'polluter pays' principle, the European Court of Auditors concluded that the principle is not implemented widely and issued three recommendations to improve its application. As a first step, the Court recommended to the Commission to “assess the scope for strengthening the integration of the Polluter Pays Principle into environmental legislation”; to “consider reinforcing the application of the Environmental Liability Directive”; and to “protect EU funds from being used to finance projects that should be funded by the polluter”.

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In parallel, Member States committed on phasing out fossil fuel subsidies and tasked the Commission ​to deliver a “methodology developed in consultation with Member States, by 2023, to identify other environmentally harmful subsidies; on the basis of that methodology Member States shall identify other environmentally harmful subsidies and report them regularly to the Commission, allowing for a Commission report on the level and type of such subsidies in the Union, and on progress made on phasing them out".

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The objective of this study is to support the Commission with the fitness check of the implementation of the 'polluter pays' principle and with the elaboration of a methodology for identifying environmentally harmful subsidies in the EU.

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The study team composed of RPA Europe, Logika Group, Metroeconomica and CEPS held an online workshop on 4 July 2023. The aim of the workshop was to exchange knowledge and ideas about the state of play in the 'polluter pays' principle implementation in the EU legislation and the use of public funds in the EU. Here you can download the workshop background paper, the event proceedings and presentation slides.

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The preliminary findings of the study were discussed during the second and final workshop held on 20 November 2023. The workshop background paper, the event proceedings and the slides are available for download. 

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