"Since there is no damaging action, there is no damage done and hence no damages to be paid," Judge Damir Rabar said when announcing the verdict.
The municipality asked the court to order Rockwool to reduce its emissions to levels not harmful to human health. It demanded 15 million kuna (2 million euros) in damages which it intended to direct towards the construction of a municipal water supply network.
Visibly displeased with the court judgement, Pican mayor Ivan Frankovic declined comment.
"We in Rockwool are pleased with the verdict because we have always claimed that the factory is not having a harmful effect on people and the environment, which today's verdict confirms," Rockwool spokeswoman Andjelka Toto Ormuz told Hina.
Since it began operating, the factory has been under the constant supervision of inspection services and all parameters relating to production and the impact on people and the environment have been monitored, she said.