State Council puts line through permit requirement for internal netting

In a January 20, 2021 ruling, the Division ruled that internal balancing no longer requires a permit under the Nature Protection Act (Wnb). In doing so, the Division confirms what many involved in nature protection law had already taken into account, but which the provinces did not yet want. Indeed, the provinces do require a nature permit for internal netting. This blog will discuss the ruling and its implications in practice.

What is internal netting?

Many (construction) projects lead to the emission of nitrogen. If that nitrogen is deposited on protected Natura 2000 areas, the project requires permission under the Wnb. With internal netting, the increase in nitrogen deposition caused by a project is reduced by the decrease in nitrogen deposition caused by that same project. If that decrease is greater or equal to the increase, on balance the project does not lead to an increase in nitrogen deposition. For example, through internal netting, housing can be built on a former office site because its gasless design typically results in lower nitrogen emissions than the (gas-connected) offices.

What follows from the law?

Before January 1, 2020, it followed from Article 2.7, second paragraph, of the Wnb that projects and 'other acts' with potentially significant consequences required a permit. Before the Programmatic Approach to Nitrogen (PAS), internal balancing was considered such an 'other act'. The permit requirement for 'other acts' was removed from the Wnb as of January 1, 2020. This provision has since read:

''It is forbidden without a permit from the Provincial Executive to realize a project that is not directly related to or necessary for the management of a Natura 2000 area, but which separately or in combination with other plans or projects may have significant effects on a Natura 2000 area.''

How can the law be interpreted?

In practice, there was uncertainty as to whether this change in the law meant that a permit was still required for this internal balancing. Previously, the Council of State ruled that any increase in nitrogen deposition on a Natura 2000 site, however small, can already lead to significant effects so that a permit is required. The question of whether a project leads to an increase in nitrogen deposition and thus has potentially significant consequences could be approached in two ways.

The first way involves looking only at the (nitrogen) consequences of a requested activity and not at the consequences of existing activities. If the requested activity in itself results in a certain nitrogen deposition, then that project is potentially significant and a permit requirement applies. In the policy rules for internal and external balancing of the various provinces, this approach was used to determine the permit obligation.

In the second way, it is examined whether the project leads to potentially significant consequences 'on balance'. In this method, a comparison must be made between the existing rights and the newly requested situation. If the result of that comparison is that there is no increase, then significant impacts can be ruled out and no permit requirement applies. In an earlier blog from 2019, we expressed our suspicion that this is the correct approach.

What is the Division's assessment?

The Division's Jan. 20, 2021 ruling ended this ambiguity. The Division notes the second way as correct in law. For the question of whether the permit obligation under Section 2.7, Subsection 2, of the Nature Conservation Act applies, it must be determined whether the activity applied for 'on balance' leads to an increase in nitrogen deposition. If 'on balance' there is no increase, significant effects can be excluded, no appropriate assessment needs to be made and the activity is not subject to a permit obligation (for nature) with regard to nitrogen aspects.

What are the practical implications?

Besides the fact that now both the competent authority and other parties can better determine how to deal with the nitrogen rules, this ruling of the Division can be very beneficial for many ongoing procedures and possibly also speed them up. Because the provinces did assume a permit obligation for internal balancing, many applications for nature permits have been submitted recently. If these applications involve internal offsetting and there is no increase in nitrogen deposition, it now appears that no nature permit is required. These applications could be withdrawn or simplified with a positive refusal, which could speed up current procedures.

Although internal balancing no longer requires a permit, an application for an environmental permit must of course be accompanied by sufficient evidence that it has been correctly applied. If this is not the case, and therefore there is no internal balancing, a Wnb permit may still be required. It remains to be seen what this correct application is, and to what extent the provincial policy rules on internal offsetting are relevant.

Another consequence of the fact that internal offsetting is not subject to a permit requirement is that many construction projects at the municipal level can now proceed without the intervention of the province. Indeed, the assessment of the nitrogen impacts of a construction project involving internal offsetting can be done before the municipal executive of the municipality where the project is to be realized. If there is internal balancing and no nature permit is required, the municipal executive no longer needs to request a statement of no objections from the province. The fact that such a Vvvb is not required can also lead to an acceleration of current procedures in which a Vvvb is still required.

In addition, there is another, perhaps unintended, practical consequence of this ruling. If no 'vvgb' is required, then in many situations the regular procedure is applicable instead of the extensive procedure. If the extensive procedure is followed while the regular procedure is actually applicable, a number of permits may have been issued by operation of law.

After reading this blog, are you wondering how this ruling will affect your project? Or do you have a pending application for a construction project where you are waiting for a vvgb where you now think you may have obtained a permit by operation of law? If so, please feel free to contact us to see what we can do for you.