Posts Tagged State aid
Must Article 107 TFEU be interpreted as meaning that a system whereby a private, non-profit eco-body, approved by the public authorities, receives contributions from those who place on the market a particular category of product and who enter into a contract with it to that effect, in return for a service consisting in the organisation on their behalf of the treatment of the waste from those products, and redistributes to operators responsible for the sorting and recovery of that waste, subsidies the amount of which is set out in the approval, in the light of environmental and social targets, is to be regarded as State aid within the meaning of that provision?
That is the question as phrased in C‑556/19 Société Eco TLC and on which Pitruzzella AG Opined on 28 May. TLC stands for Textiles, Lignes de maisons, and chaussures (textiles, household linen and shoes). Producers or as the case may be first importers pay a fee to the collective body in lieu of their personal commitments under extended producers responsibility per Waste Framework Directive 2008/98.
The AG of course revisits the definition of ‘State Aid’ under CJEU C-379/98 Preussen Elektra, on which more here and here. Preussen Elektra remains controversial for it would seem to give Member States quite a bit of room for manoeuvre to reach the same result as direct State Aid more or less simply by inserting a private operator who receivs funds directly from private operators however in line with direct State instructions on level and modalities of payment. The AG opines that in the case at issue there is no State Aid however he directs further factual lines of enquiry (ia re the State control over payments by the collective body to recyclers.
Handbook of EU Waste law, 2nd ed. 2015 OUP, para 4.116 ff.
Know your biomass from your biomass! The ECJ allows less favourable treatment of wood and wood waste in Industrie du bois de Vielsalm
In Industrie du bois de Vielsalm, Case C-195/12, the ECJ yesterday held in favour of the Walloon Region of Belgium, finding that a regional support scheme providing for the grant of ‘green certificates’ to cogeneration plants, which grants a larger number of green certificates to cogeneration plants processing principally forms of biomass other than wood or wood waste, does not infringe the principle of equality and non-discrimination.
The Court found first of all that Directive 2004/8 on the promotion of co-generation does not exhaustively regulate national support schemes for cogeneration and electricity production from renewable energy sources: Member States are given wide discretion.
It then argued that there are sound environmental reasons for discriminating against wood and wood waste in co-generation support schemes:
‘ (…) even at the level of the renewable nature of the resource, and hence from the point of view of its availability, as also from the point of view of sustainable development, prudent and rational utilisation of natural resources, and security of supply, wood, which is a resource whose renewal requires a long period, may be distinguished from agricultural products or household and industrial waste, whose production takes place in a much shorter space of time. (at 74)
‘Furthermore, it is common ground that the overall environmental impact produced by the increased use of biomass for energy production likely to follow from support measures differs according to the particular characteristics of the type of biomass used. As regards the environmental impact that could follow from enhanced support measures for the use of wood and/or wood waste for energy production, it may thus prove necessary to take into account that any excessive or premature deforestation which may be encouraged by such support measures is liable to contribute to an increased presence of carbon dioxide in the atmosphere and adverse effects on biodiversity or water quality.
Increased development of agricultural products intended for energy production is liable for its part to increase various forms of pollution specifically linked with agricultural activities, in particular with the use of fertilisers and pesticides, such as adverse effects on the water supply. (at 75 ff)
‘Finally, factors such as the quantities in which the various renewable energy sources are present in the territory of the Member State concerned, or the level of development that may already have been achieved there as regards recourse to one or other renewable energy source for cogeneration or electricity production, are also capable of influencing the choices to be made with respect to the renewable energy sources to be promoted in that Member State for the purposes of environmental protection and security and diversification of the energy supply. (at 79)
‘Having regard to all the foregoing, it must be considered that, in the light in particular of the objectives pursued by Directives 2001/77 and 2004/8 and the aims of the European Union in the field of the environment, and of the broad margin of discretion allowed to the Member States by those directives for the adoption and implementation of support schemes intended to promote cogeneration and electricity production from renewable energy sources, and having regard to the individual characteristics of the various categories of biomass capable of use in a cogeneration process, those categories must not be regarded in the context of such support schemes as being in a comparable situation for the purposes of the possible application of the principle of equal treatment, observance of which is ensured by European Union law.
The need to be able to treat those various categories of biomass differently and, in particular, in the light of various environmental considerations, to make choices as to the types of substances to benefit from support and to draw distinctions as regards the specific details of that support, including the amount of the support, must on the contrary be regarded as inherent in that context, without it being possible to consider, in the present state of European Union law, that by taking the view that those various categories of biomass are not in the same situation the Member States manifestly exceeded the limits of their broad discretion in the matter (see, by analogy, Luxembourg v Parliament and Council, paragraphs 50 and 51). ‘(at 80-81)
This last para is a textbook application of the principle of non-discrimination: treating different situations like, may also constitute a violation of the principle of equal treatment. Here, the difference in circumstance is entirely explained by the ECJ by recourse to the environmental qualities of different types of fuel.