1. The recent ECJ case law. The most recent decisions of the Court of Justice on the crucial distinction between the production residue¹ and the residue with the features of a "by-product" (to be considered as a commercial good),² provide us with significant clarifications on some relevant aspects of this essential distinction, on which we should think more about.

In particular, within the interpretative approach towards a progressively wider and wider definition of "by-product", there have been recently three important decisions of the Court of Justice.³ The three rulings deal with economic-commercial issues of utmost importance⁴ and have the merit to discuss again the result of a complex and often not very coherent case law orientation, getting over a mere legally-formal approach of the issue. Such a formal approach was driven by doubts about the real and actual reuse of production residues "in their original state", also in the light of several findings of irregular waste/residues management.

The explicit confirmation of the essential features of the notion of "waste" (and, accordingly, of "by-product"), as established over the last ten years, has not prevented the Court from rewriting, on more realistic and commercially sustainable grounds, the statute of factual and logical-legal criteria which allows to overcome the complexity of the distinction (waste/by-product). In particular, the Court tries to change some essential features (see below) of the previous case law orientations, providing the national judges - who are asked to determine the notion of waste on a case by case basis⁵  - with a decisive means for establishing a certain and uniform notion of waste, in accordance with European Community law.

Therefore, in these most recent decisions, first the Court confirms one of her leading and basic principles, according to which the notion of waste depends on the notion of "discard", within the meaning of Article 1, lett. a) of the EC Directive 75/442⁶ referring to the intention of a substance producer/holder to destine such substance for a recovery or disposal operation.

Then, the Court does not ignore that her reasoning resulted in a breach of the above basic principle/criterion, when affirming that:

(a) carrying out "an operation listed in Annex II A or II B to Directive 75/442 does not, of itself, justify the classification of that substance as waste"⁷ and it cannot be excluded that a raw material could be destined for a treatment or disposal operation⁸ and/or, from a different perspective, that a raw material (deriving from a recovery operation) holder determines, for example, to dispose of the raw material instead of using it;⁹

(b) conversely, "the concept of waste…is not to be understood as excluding substances and objects which are capable of economic reutilization…and are collected on a commercial basis for recycling, reclamation or re-use."¹⁰

However, by indirectly acknowledging that she has renounced to set out certain criteria for determining the notion of waste - in our view in light of too a complex and intrusive discussion of the issue, not always necessary (and almost never useful for operators) - the Court has been adding, over the last two years, new evidence or indicators "…from which it may be possible to infer the holder's intent"¹¹ or directly distinguish, with respect to a specific substance, between waste and by-products.¹²

2. Update of the criteria for determining the notion of waste. In the context of the case law tendency, as it has developed over the years, the three mentioned decisions¹³ added and clarified some essential parameters on the basis of which a production residue is to be defined as a "by-product", by introducing, for some of them, a number of slight amendments¹⁴

1) as a general rule, the operator must assess the holder's intention in order to ascertain whether he has (or he does not have) the intention to "discard" the substance or object, in the absence of other criteria set out by law (absent in the Directives);¹⁵ the result being that - in practical terms - a production or consumption residue that is a secondary product and whose production the producer wishes to limit, must be considered as "discarded". It follows that: "…waste is what fals away when one processes a material or an object and is not the end-product which the manufacturing process directly seeks to produce";¹⁶
2) a substance resulting from "…a manufacturing or extraction process, the primary aim of which is not the production of that item, may be regarded not as a residue but as a by-product which the undertaking does not wish to ‘discard’, within the meaning of the first subparagraph of Article 1(a)…, but intends to exploit or market on terms and conditions which are advantageous to it, in a subsequent process,¹⁷ without any further prior processing";¹⁸

3) the circumstances that "….materials have an economic value as products, regardless of any form of processing…" and that there is not "the mere possibility of reusing the substance but…high likelihood…(and) there is also a financial advantage to the holder in so doing", are considered as objective possible evidence for the purpose of establishing the producer's intention (not to discard the production residue);¹⁹

4) a production residue, despite not being the principal outcome of the production process or the purpose of the production process, is to be considered as a "by-product" (not waste) if it has been voluntarily produced and thus "it is the result of a technical choice",²⁰ even if it is not "the primary objective" of the production process nor "…the end¬product which the manufacturing process directly seeks to produce";²¹

5) the production residue is to be defined as a by-product even if "…it automatically results from a technique which at the same time generates other substances…" whose production is the objective of the producer, as long as its use is certain and it is wanted as a product (not as a superfluous residue);²²

6) the fact that a by-product is treated through processes that correspond to "standard waste treatment method(s)"²³ does not lead to the conclusion that such a by-product is to be considered as a residue/waste, if the aim of the production process²⁴ is precisely to derive, from a unique raw material (for example, crude oil), different types of products, clearly with different economic values (and thus with different markets and different prices), and if these products are all sought by the producer who has chosen those specific production processes. With the adding consideration - provided by the Court - that, in this case, the mere treatment of the by-product does not mean that such a by-product is waste, given that even a raw material may be subject to one of the "recovery operations";²⁵

7) the by-product remains a by-product even if its use leads to its disappearance, because the issue of disappearance (which could lead us to think that it is waste),²⁶ besides not being decisive, can be overcome by showing that the by-product is used as a raw material for the purpose of manufacturing other products;²⁷

8) the circumstance that a by-product must be treated with particular precaution for the protection of the environment and health (which could lead us to consider it as waste)²⁸ does not automatically "convert" the by-product into waste because said precautions are requested also when dealing with raw materials or dangerous goods and, therefore, the duty of precaution does not change the nature of the substance if it has all features for being considered as a by-product (I refer to those features listed here above and below);²⁹

9) the circumstance that the holder mistakenly considers, in some occasions or documents, a particular substance as waste is not "enough" to convert said by-product into waste if, with reference to his actual behaviour, he is reusing it in its “original state”, satisfying all the above conditions, without "discarding" it or being required to discard it pursuant to a "legal request" by a public authority;³⁰

10) the by-product does not convert into waste if it is conveyed to other enterprises, without preliminary treatments,³¹ in order to satisfy their needs. In terms of definitions, this significant change in case law tendency determines, as it has been stressed, the removal of a strict limit³² to the definition of "by-product", which is the requirement of a direct use of the production or consumption residue "in the production process" from which it is originated and, as a result, a use in the same producer's plants.³³

3. Conclusions - If considered perspectively, the most recent decisions examined above can be read as a progressive step (even if not concluded) towards a slow and complex evolution of European case law on the notion of waste, characterized by important news - if compared with the past - above all in terms of a greater weight to be paid to the holder's intention when establishing that a substance - resulting from a production process - is not to be considered as waste but as a by product.³⁴

In the new line of case law, driven by the recent decisions, the Court of Justice assigns to the "intention" of the producer/holder a key role, allowing the classification of "secondary residues" (whose production is not the primary aim of the producer) and "other (secondary) substances" automatically generated by complex technologies, as “by-products”. They are, anyway, considered as by-products as long as they result from a technological plan sought by the producer and provided that they are effectively reused.

Within this context, the intention of the producer is to be valued from an objective point of view (by reference to the technologies of the chosen process) as well as from a subjective point of view, with respect of his 'psychological' intention, even if it is defective because of a mistake of law or a mistake of fact (the holder's behaviour overcomes any mistake and his real intention prevail over the intention mistakenly declared).

The enlarged concept of "by-product" is not denied, according to the same Court, if it is carried out any of the operations listed in the "recovery operations" list (for example, combustion process), which lead to the substance's disappearance when it is reused, even if particular conditions of precaution for the environment and health are needed, when reusing it.

The last, but not the least important consideration, is that the three decisions examined above³⁵ clearly clarify that "…it is not appropriate to limit the use (of the by¬product) in the same… holding as that which generated it"; it is thus removed an additional obstacle to the finding of a "by-product", which was against one of the leading principles of the European Union (the free circulation of commercial goods within the common market).

On this last issue we cannot have doubts, given the clear latest statement of the European Court: "it is possible for a substance not to be regarded as waste within the meaning of Directive 75/442 if it is certain to be used to meet the needs of economic operators other than that which produced it".

In conclusion, even if "the Directive 75/442 does not propose any criteria for determining the holder's intention to <<discard>> a substance or a specific object",³⁶ the Court has been setting forth, over the last five years, a complex, increasingly elaborated and precise bunch of substantial criteria for finding such an intention (which results in the activity of "discarding"), which are meant to facilitate - and usefully restrict - the degree of competence (and "discretion") of national judges. We cannot be but agreeable to this outcome, considering the fragility of a supranational system whereby the exegesis and the implementation of common rules (such as those set forth by the directives on waste management in the EU) are - in practical terms - left to national administrative authorities and national judges, according to rules established by different jurisdictions…of 25 Member States.

The integration of customs within the European internal market also depends, indirectly, on the domestic jurisdictions being consistent with each other. In this context, the European case law represents a common limit and constraint³⁷ to domestic jurisdictions. The uniformity and coherence of the European case law allow us to reach - hopefully soon - greater "legal certainty"; this represents a "benefit" (not only legal) which cannot be renounced and which economic operators, the global market and public administrations have the right to look forward to (and to reach).³⁸

_____________________________