In a complaint to the European Commission marking a landmark legal challenge for the New Zealand government, Dutch environmental group Both ENDS alleges that New Zealand is not meeting its environmental obligations under its free trade agreement with the European Union.

The complaint alleges that:

  • New Zealand has failed to adhere to the free trade agreement's "non-regression" clause, which prohibits parties from weakening environmental protections to encourage development or trade; and

  • New Zealand has breached the clause committing the parties to effectively implement the Paris Agreement.

Both ENDS claims that since the EU-New Zealand Free Trade Agreement entered into force on 1 May 2024, the Government has taken a connected series of decisions that breach its commitments.  One of the decisions cited is the passage of the Climate Change Response (Tort Liability) Amendment Act 2026, which introduced a statutory bar on tort liability for emissions-related climate change (see our earlier update here).

The European Commission will now examine the case and determine whether New Zealand is in breach of its environmental obligations under the free trade agreement.  If the Commission considers there is a prima facie breach, it will ask the two governments to resolve the issue through discussions.  If agreement cannot be reached, more serious outcomes are available, including suspension of free trade benefits.  At this stage, Both ENDS is seeking compliance with the agreement rather than suspension of New Zealand's trade benefits.

This complaint is the first to be lodged through the European Commission's Single Entry Point, a mechanism enabling European organisations to report non-compliance with trade agreements, on environmental and climate grounds.  New Zealand organisations cannot file a complaint themselves, but a number of groups have added their support to the complaint as co-sponsors including Greenpeace, the Environmental Law Initiative, the Ngāti Pūkenga Iwi Trust, OroTaiao, Mike Smith (the claimant in the Smith v Fonterra case that prompted the statutory bar on tort liability for emissions-related climate change) and Professor Jane Kelsey.

If the Commission finds in Both ENDS' favour, it could set a precedent for how the EU enforces environmental commitments in its trade agreements, potentially putting New Zealand's broader trade relationship with Europe under closer scrutiny going forward.  However, the likely next step if a breach is found is that the Commission will initiate formal discussions with the New Zealand government.

For more information, please reach out to one of our team members.

Thank you to Phoebe Allan (Solicitor) for her assistance in preparing this alert.