Drawing a green line in the fjords: EFTA court on economic gains v ecological protection

Although the EEA Agreement and the EU are fundamentally geared towards economic integration, Case E-13/24 illustrates that economic considerations do not automatically prevail over environmental protection. The case concerned the interpretation of the exemption “overriding public interest” in Article 4(7)(c) of the Water Framework Directive (WFD), 2000/60/EC. Specifically, the EFTA Court was asked to determine whether economic considerations (e.g. revenues from industrial activity, tax income for the state and municipalities, employment generation, and shareholder returns) could justify the ecological deterioration of a water body. The EFTA Court was also asked to consider whether ensuring the supply of critical raw materials, either globally or within the EEA, could qualify as an “overriding public interest”.

The opinion from the EFTA Court is notable for several reasons. It is the EFTA Court’s first judgment concerning environmental law and the first time the EFTA Court and the Court of Justice of the EU have examined the substantive limits of the exemption “overriding public interest” in Article 4(7)(c) WFD. More importantly, the EFTA Court’s judgment also underscores the growing procedural potential and legal potency of environmental law across the EU and EEA.  

The case referred to the EFTA Court arose from a challenge to the legality of a pollution permit issued to a private, listed mining company. The permit allows the mining company the right to deposit approximately 170 million tonnes of mining waste into Førdefjord, a pristine fjord located on Norway’s west coast. It is undisputed that the activity would result in an irreversible deterioration of the fjord’s ecological status, downgrading it from “good” to “poor” as defined under the WFD.

Article 4 of the WFD prohibits deterioration in the ecological or chemical status of water bodies unless the criteria for an exemption under Article 4(7) are met. The question in this case was whether the exemption provided in Article 4(7)(c) – specifically, the concept of “overriding public interest” – had been correctly interpreted and applied.

The Norwegian government justified the permit on the grounds of anticipated revenue from the mining activity, arguing that this revenue would be beneficial for Norwegian society through wages, shareholder returns and income tax.

In 2022, two Norwegian environmental organisations challenged the validity of this permit in court. Although the Oslo District Court upheld the permit, the case was appealed. The Borgarting Court of Appeal subsequently referred several questions to the EFTA Court for an advisory opinion, resulting in the advisory opinion in E-13/24.

Economic considerations in question

The EFTA Court concluded that only interests that genuinely serve the public, and not merely private or commercial interests, can qualify under Article 4(7)(c). Private benefits (e.g. profits for shareholders or revenue for private entities) cannot, by definition, constitute an “overriding public interest”. This conclusion flows directly from the wording “overriding public interest”.

Moreover, in paragraph 42, the Court added that it is not sufficient for an economic consideration to serve the public interest. It must also be of such significance – due to its context or other contributing factors – that it is sufficiently important to qualify as overriding.

Crucially, the EFTA Court underlined that virtually all profit-generating activity, either state or private owned, yield ancillary public benefits, such as employment, tax revenues, and shareholder returns. If such knock-on effects were sufficient to justify ecological deterioration, the integrity of the WFD’s protective regime would be fundamentally undermined.

Consequently, the EFTA Court concluded that income generated from economic activity (e.g. wages for employees, shareholders income, or tax revenue) cannot, in and of itself, constitute an “overriding public interest” within the meaning of Article 4(7)(c) WFD.

Employment effects and access to critical raw materials

The EFTA Court extended its reasoning regarding the economic considerations to employment effects. As a rule, the EFTA Court found that general employment effects are a natural and expected knock-on effect of economic activity and, as such, insufficient to justify an exemption. Nevertheless, it did not exclude the possibility that, under exceptional circumstances such as in regions suffering from significant depopulation and social need, employment effects could constitute an “overriding public interest”, if duly substantiated.

The EFTA Court also considered whether securing access to critical raw materials could constitute a justification. The EFTA Court acknowledged that the EU Critical Raw Materials Act (Regulation (EU) 2024/1252), though not yet incorporated into the EEA Agreement, might be relevant for interpretative guidance.

The EFTA Court, however, held that the classification of a mineral as “critical” in relation to the EU Critical Raw Materials Act does not automatically make its extraction an “overriding public interest”. To qualify, it is necessary to demonstrate that the project’s purpose, the scarcity of the mineral, and its significance to the EEA’s strategic objectives justify such a designation. Purely global supply considerations were deemed insufficient since they lack the required link to EU or EEA interests.

The following takeaways can be derived from the EFTA Court decision:

• Primacy of environmental and ecological considerations – The ruling affirms the WFD’s role as a protective mechanism against the deterioration of the ecological and chemical status of water bodies across Europe. Environmental standards cannot be overridden solely for reasons of general economic gain.
• Economic considerations alone are insufficient – The generation of tax revenue, employment effects and shareholder profits, however beneficial, are typical outcomes of economic activity and do not, in themselves, amount to an “overriding public interest” under Article 4(7)(c) WFD
• Employment effects relevant only in exceptional circumstances – While general employment considerations are inadequate to justify an exemption, they may be taken into account where a project demonstrably addresses severe regional depopulation and social deprivation.
• Strategic access to critical raw materials must be EEA-focused – The designation of a raw material as “critical” is not, in isolation, sufficient to constitute an “overriding public interest”. The specific project must serve the strategic interests of the EU/EEA and contribute to securing supply within the internal market. Projects aimed primarily at global markets will not meet this threshold.
• Broader legal impact across the EU and EEA – The judgment enhances legal clarity and strengthens environmental protection under the WFD. It provides a clear precedent for future cases involving “overriding public interest” and striking a balance between economic development and protection of water resources across the EU and EEA.