Internal netting in nitrogen problems

Internal netting has often been mentioned in recent months as a solution to the nitrogen problem in construction projects. However, it is unclear when internal balancing can be used and whether or not a Wnb (Nature Conservation Act) permit is required. This lack of clarity has only increased in recent months with the 'Decision tree: Permitting nitrogen deposition for new activities' of the government[1] and the 'Provincial policy rule on internal and external netting',[2 ] especially now that a number of provinces do not (yet) apply these policy rules.

What is internal netting

In its own words, internal netting boils down to the following. With internal netting, the increase in nitrogen deposition caused by a certain (construction) project may be reduced by the decrease that is simultaneously realized at the same location, so that on balance no increase in nitrogen deposition occurs. An example is the expansion of an industrial hall. In principle, this causes an increase in nitrogen deposition. If at the same time the entire production hall is made gas-free, so that it emits much less, nitrogen deposition may remain the same or decrease on balance. In that case, you can 'internally offset'.

Internal netting has been much discussed in recent months, but no clear definition has been used. Case law and parliamentary documentation also offer only partial clarification. The provincial policy rule defines "internal netting" as:

situation where the requested project itself does not, on balance, lead to an increase in N deposition compared to the previous permission within the boundary of one project or site

The Empire seems to assume the following definition[3]:

the implementation of measures within the same establishment as part of the same project, as a result of which an increase in nitrogen deposition resulting from certain aspects of the project are offset in whole or in part by other aspects of the same project.

Both definitions of internal netting refer to a "project. A "project" must, according to European Court of Justice case law, involve[4]:

a single operation characterized by a common purpose, continuity and complete agreement, particularly with regard to the places where and conditions under which the activity is carried out.

In any case, it can be deduced from both these descriptions that internal netting refers to measures and activities carried out at a single location. This form of netting involves reducing nitrogen deposition as a result of a single operation by means of other measures at the same location. An example of internal netting is given in the explanation of step 2 of the State Decision Tree:

With "internal netting," the new situation does not lead to an increase in nitrogen deposition compared to the current situation. In the case of residential development, for example, the construction of a residential area on industrial or agricultural land can be considered.

In view of the European Court of Justice's strict interpretation of the concept of 'project', the question is whether internal offsetting is involved if agricultural activities are ceased at a location and housing is built on the site. After all, the (termination of an) agricultural or industrial activity is a different 'project' than the construction of dwellings. Note: this does involve licensed former agricultural or industrial land and not merely land designated as such.

However, it is defensible that 'project' in the definition of internal balancing refers to a broader concept than the term 'project' in the Habitats Directive. The government's recent statements in the 'decision tree' also indicate a broader view.

Internal netting in the preliminary assessment or in a Wnb permit?

Apart from the question of how far the 'internal balancing' concept extends, it is also unclear whether internal balancing does or does not require a Wnb permit. In rulings 2008 to 2016, based on the 'old' Nature Conservation Act 1998 (Nbw 1998), the Division indicates that a permit is not required if it is established in a preliminary assessment that the planned operation will not have a significant impact on flora and fauna in Natura 2000 areas.[5] In doing so, the applicant can make use of the instrument 'internal netting'. The basic principle is that if on balance the nitrogen deposition does not increase by taking measures on the own farm, there is no significant impact. The applicant could then make do with a preliminary assessment, and omit an application for a permit under the then Nbw 1998. After all, the absence of potential significant effects meant that a permit requirement was not an issue.

It is likely that this jurisprudence of the Division will also retain its effect under the current Wnb. The change in the law from the Nbw 1998 to the Wnb did not intend a substantive change. The legislative change stems from an organizational motive. Also, the terminology from the Wnb is almost identical to the terminology from the Nbw 1998. Both laws refer to the requirement of a permit if there are potential significant effects.[6] Also, both laws are an elaboration of European regulations. In particular, the Habitat Directive and its rules have a major impact on national nature protection law. Because both laws are the national codification of the same directive, it is unlikely that there is room for a different interpretation of the applicable provisions.[7]

Roadmap Central Government and Policy Provinces.

It is therefore striking that at step 2 of the Decision Tree, the National Government describes that if internal balancing leads to a nitrogen deposition less than or equal to 0.00 mol/ha/yr, the permit can be granted. This therefore indicates internal netting in the context of the Wnb permit and not in the preliminary assessment. In the explanation of this step is written:

The conclusion may then be that through internal netting there is no increase in nitrogen deposition within the project or site such that significant effects can be excluded a priori.

However, if significant effects can be excluded a priori, internal balancing in the preliminary assessment should be sufficient. Because the following sentence again states that a permit must be requested from the competent authority, the government apparently assumes a permit requirement for internal balancing.

The same applies to the provinces. In the provincial policy rules adopted (and again partially withdrawn) on October 8, 2019, conditions are set for granting a permit under the Wnb. Among other things, a permit can be granted when there is no increase in nitrogen deposition through internal netting. In (the explanation of) these policy rules it is not made clear on what the permit obligation for internal balancing is based. Both the National Roadmap and the provincial policy rules therefore seem to assume a permit obligation, but it is unclear on what this conclusion is based.

Conclusion

It is conceivable that internal netting may be possible in cases involving, for example, the use of former industrial or agricultural land for housing. Although a critical note can be placed on this because of European jurisprudence, recent statements by the national government in the "decision tree" seem to make it one of the defensible possibilities.

In addition, internal netting seems possible in the preliminary phase. Based on case law of the Division based on the old Nbw 1998, internal balancing takes place in the preliminary assessment, as a result of which, if after internal balancing there is no increase in nitrogen deposition (0.00 mol/ha/yr), no permit is required. Since the Wnb did not intend any change on this point, it is reasonable to assume that the Division will rule the same on this under the Wnb, despite the fact that the national and provincial governments are taking a different course.

Tips

Nevertheless, to avoid risks, it remains prudent to apply for a permit under the Wnb. This because of the ongoing administrative ambiguity, which is illustrated and underscored by the recently regionally repealed policy rules and little clarifying national roadmaps. The application can then be accompanied by a request to refuse it because no permit is required now that significant effects can already be excluded due to internal netting.

[1] https://www.rijksoverheid.nl/documenten/publicaties/2019/10/12/beslisboom-toestemmingverlening-stikstofdepositie-bij-nieuwe-activiteiten

[2] https://www.bij12.nl/wp-content/uploads/2019/10/beleidsregels-salderen.pdf

[3] Parliamentary Papers II 2013/14, 33669, 6, p. 14.

[4] ECJ EU 7 November 2018, C-293/17 & C-294/17, ECLI:EU:C:2018:882, para. 86.

[5] ABRvS March 31, 2010, ECLI:NL:RVS:2010:BL9656, para. 2.5.8; ABRvS April 1, 2015, ECLI:NL:RVS:2015:999, para. 2.7; ABRvS June 22, 2016, ECLI:NL:RVS:2016:1745, para. 14.4.

[6] W. Zwier, "Hooking up under the Nature Protection Act," Gst. 2017/56, vol. 7453, p. 300.

[7] H.E. Woldendorp, 'The Nature Protection Act; the smaller matryoshka of the Nature Protection Act 1998 (part 1), BR 2017/11, vol. 2, p. 64.