The aim of this study is to improve the understanding of the relationship and interactionbr between European environmental policy and the Single Market. To this end, the projectbr seeks to identify environmental policy areas where a lack of standardisation of environmentalbr policies leads to competition distortions and to develop options for policies to overcomebr these distortions. The development of the European Single Market is a success story ofbr European Integration. Policies to ensure the functioning of the Single market are at the heartbr of European economic strategies. Today, there is a Single market for most products andbr many services for close to 500 million consumers. This opens up tremendous economicbr opportunities and contributed considerably to growth and employment within the Union. Thebr European market and European policies sets the pace also for other regions of the world.br European standards, regulations and policies are imitated and emulated in other countries inbr order to gain access to European markets. This is evident also for environmental standards.br For example, European standards for cars, for appliances, for chemicals etc. are a referencebr point for environmental standards outside the EU. However, in many environmental policybr areas, there is no uniform approach to environmental standards. In a number of issue areas,br there are commonly agreed objectives and targets on the European level, but it is left to thebr Member States to decide on how best to achieve them. This is for good reasons as Memberbr States dispose of different administrative capacities and legal systems, are characterised bybr different political cultures and have different preferences for implementation instruments.br However, as Member States also vary regarding their preferences of environmental quality,br there can also be differences in the level of stringency of standards. Lastly, the cost ofbr complying with a given standards can also be different, particularly if the 'distance to target'br varies across Member States. It is subject of dispute among stakeholders and amongbr academics to what extent such flexible Community environmental legislation leads tobr competition distortions and in what the effects of such distortions may be. On the one hand,br higher environmental standards and larger 'distance to target' may lead to additional costsbr imposed on firms and consumers thereby inhibiting their competitiveness. Stricterbr environmental standards have also been perceived by business as trade barriers imposed bybr the more ambitious Member States and thereby undermining the Single Market. On the otherbr hand, there is considerable evidence that ambitious environmental policies stimulatebr innovation and eco-efficiency, thereby providing medium and long-term competitivebr advantages for certain sectors and countries. This raises the question as to whether, wherebr and how further standardisation can contribute to both improving environmental effectivenessbr and to strengthening the Single market.