In this paper we analyze the proposal for the creation of a European fund for the compensation of oil pollution damage. We argue that experience from the accident of the Prestige tanker off the Spanish coast in 2002 made it clear that existing international liability and compensation mechanisms were insufficient. The disaster added momentum to the proposal for the creation of an intermediate tier between the national and the international regimes. However, the proposal was dropped in 2004. In this paper we analyze the causes of the proposal demise and whether a similar opportunity is likely to arise in the future.