Compulsory Financial Security for Environmental Liabilities

The late implementation of the Environmental Liability Directive has not prevented the European Commission from issuing a progress report.

The 2004 Environmental Liability Directive ("ELD") set out an EU-wide framework for the prevention and remediation of environmental damage.

The final ELD text did not go so far as to require mandatory financial security (e.g. insurance) for EU operators in respect of ELD-related liabilities. It did, however, try to prepare the ground for the possible introduction of such a requirement in the future by:

• requiring that member states take measures to encourage the development of financial security instruments and markets in this area; and