Judgment;Summary — ECLI:EU:C:2020:844
Date: 2020-10-21
Language of the case: French
Court formation: First Chamber
Subject matter: State aids;Competition
Procedure: Reference for a preliminary ruling
Origin: France

summary application, a supplementary pleading and three statements of 
reply, registered on 29 November 2017, 12 January 2018, 7 May 2018 and 
22 June 2018, 4 June 2019 at the Judicial Affairs Secretariat of the Conseil d’Etat 
(Council of State), Eco TLC requests the Conseil d’Etat to:  
1) annul as ultra vires the Order of 19 September 2017 of the ministre d’Etat, 
ministre de la transition écologique et solidaire (State Minister, Minister for the 
Ecological and Inclusive Transition) and of the ministre de l’économie et des 
finances (Minister for the Economy and Finance) amending the Order of 3 April 
2014 relating to the approval procedure and laying down standard terms for bodies 
wishing to contribute to the treatment of waste from clothing textile products, 
household linen and footwear, in accordance with Article R. 543-214 of the Code 
de l’environnement (Environmental Code and approving such a body, in 
EN 
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accordance with Articles L. 541-10-3 and R. 543-214 to R. 543-224 of the 
Environmental Code;  
[…] 
It contends that the contested order: 
[…] 
- establishes a measure constituting a new, unlawful State aid in that it was not 
notified to the European Commission in advance, contrary to Article 107(1) of the 
Treaty on the Functioning of the European Union; [Or. 2] 
[…]. 
By a statement of defence, registered on 1 June 2018, the ministre d’Etat, ministre 
de la transition écologique et solidaire submits that the application should be 
rejected. The defendant claims that the application is inadmissible because Eco 
TLC lacks a legal interest in challenging the contested order and that the pleas 
raised in the application are unfounded.  
By two statements in intervention, registered on 2 March 2018 and 25 June 2018, 
the Fédération des entreprises du recyclage (Federation of Recycling Companies) 
requests the Conseil d’Etat to dismiss the application […]. It submits that its 
intervention is admissible, that the application is inadmissible because Eco TLC 
does not have a legal interest in challenging the order, and that the pleas relied on 
in the application are unfounded.  
The application was communicated to the ministre de l’économie et des finances 
(Minister for the Economy and Finance), who did not submit a statement.  
Having regard to the other documents in the file; 
Having regard to: 
- the Treaty on the Functioning of the European Union; 
- the Environmental Code; 
- […]; 
[…] [Or. 3] […] 
Whereas: 
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1 Article 69 of the loi du 21 décembre 2006 de finances pour 2007 (Law of 21 
December 2006 on finances for 2007), inserted into the Environmental Code 
Article L. 541-10-3 on the principle of extended producer liability for producers 
who ‘on a commercial basis place on the national market, new clothing textile 
products, footwear or household linen, intended for domestic use’, requiring them 
to contribute to or provide for the recycling and treatment of the waste from those 
products, either by making a financial contribution to a body, approved by joint 
order of the ministers for ecology and for industry, which enters into contracts 
with sorting operators and local authorities or groupings of them responsible for 
waste management and provides them with financial support for the recycling and 
treatment of the waste in question, or by establishing, in accordance with standard 
terms, an individual system for the recycling and treatment of that waste, 
approved by joint order issued by the ministers for ecology and for industry. The 
final paragraph of that article provides that: ‘The arrangements for the 
implementation of this Article, in particular the method for calculating the 
contribution, the terms for promoting the integration of persons experiencing 
difficulties with regard to employment and the penalties for non-compliance with 
the requirement referred to in the first paragraph shall be laid down by Decree in 
the Conseil d’Etat.’ The second paragraph of Article R. 543-214 of that code 
provides that: ‘Each body shall, in support of its application for approval, provide 
evidence of its technical and financial means to carry out the necessary 
procedures to promote, through the contracts which it signs and the redistribution 
of the financial contributions it collects, the re-use, recycling, recovery and 
treatment of the waste referred to in Article L. 541-10-3 and shall state how it 
proposes to comply with the standard terms attached to the approval’. The first 
paragraph of Article R. 543-215 of the code provides that: ‘The approved bodies 
shall determine the overall amount of the financial contribution which they collect 
from the persons referred to in the first paragraph of Article L. 541-10-3 in such a 
way as to cover, on an annual basis, the expenses arising from the application of 
the standard terms referred to in Article R. 543-214’. Article R. 543-218 of the 
code provides that the standard terms referred to in Article R. 543-214 of the code 
must specify, in particular, the targets set for the quantities of wastes sorted, 
reused, recycled or recovered, and the targets for the integration of persons 
experiencing difficulties with regard to employment within the meaning of Article 
L. 541-10-3 of that code and the reduction of the contribution payable to the 
sorting operator in the event of non-compliance by that operator with the 
minimum target for the integration of such persons.  
2 The Order of 3 April 2014 on the approval procedure and laying down the 
standard terms for bodies desiring to contribute to the treatment of waste from 
clothing textile products, household linen and footwear makes the payment of 
support conditional on a minimum rate of material recovery and recycling. It 
includes an Annex entitled ‘Scale of financial support payable to contracted 
sorting operators in year N+l, in respect of year N’ which determines the method 
of calculating the different types of financial support which may be paid to 
contracted sorting operators, namely, support for sustainability, support for 
‘sorting’ and support for development. In particular, that annex provides that the 
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amount of the support for sustainability shall be equal to the sum of aid for 
sustainability in respect of materials recovery, energy recovery and disposal and 
that the aid for sustainability in respect of materials recovery is to be calculated by 
allocating to [Or. 4] ‘tonnage sorted which has been subject to recovery (reuse + 
recycling + other methods of recovery)’ a coefficient set at 65 euros per tonne. 
Furthermore, the Order of 3 April 2014 grants an approval to Eco TLC to collect 
contributions for the treatment of waste from clothing textile products, household 
linen and footwear and to redistribute them in the forms of financial support to 
sorting operators and to local authorities with responsibility for waste 
management, in compliance with the standard terms annexed to that order. 
Article 1 of the Order of 19 September 2017 amending the aforementioned Order 
of 3 April 2014, the annulment of which as ultra vires is sought by Eco TLC, 
provides for the coefficient of 65 euros per tonne set by the Order of 3 April 2014 
to be increased to 82.5 euros per tonne for support paid from 1 January 2018.  
The plea of inadmissibility by the ministre d’Etat, ministre de la transition 
écologique et solidaire:  
3 The Order of 19 September 2017 provides for the revaluation of the support 
payable by the eco-body established in the clothing textiles products, household 
linen and footwear sector to the contracted operators responsible for the treatment 
of the waste from those products. In view of the impact of that revaluation on that 
company, the sole approved operator in this sector, Eco TLC has sufficient 
interest to give it standing to bring an action challenging that order as ultra vires.  
The admissibility of the intervention:  
4 The Federation of Recycling Companies has sufficient interest in the retention of 
the contested Order. Its intervention is therefore admissible.  
The pleas relied on in the application: 
5 […] [Or. 5] 
[…] 
6 […] 
7 […] [pleas which are irrelevant to the question referred for a preliminary ruling] 
[Or. 6] 
The classification as State aid: 
8 According to paragraph 1 of Article 107 of the Treaty on the Functioning of the 
European Union: ‘Any aid granted by a Member State or through State resources 
in any form whatsoever which distorts or threatens to distort competition by 
favouring certain undertakings or the production of certain goods shall, in so far 
as it affects trade between Member States, be incompatible with the internal 
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market.’ According to paragraph 3 of Article 108 of that Treaty: ‘The Commission 
shall be informed, in sufficient time to enable it to submit its comments, of any 
plans to grant or alter aid. If it considers that any such plan is not compatible 
with the internal market having regard to Article 107, it shall without delay 
initiate the procedure provided for in paragraph 2. The Member State concerned 
shall not put its proposed measures into effect until this procedure has resulted in 
a final decision.’ 
9 It follows from the provisions of Article L. 541-10-3 and Article R. 543-218 of the 
Environmental Code referred to in paragraph 1 that producers who place clothing 
textiles, household linen and footwear on the French market must either arrange 
for themselves for the treatment of the waste from those products or transfer the 
responsibility to an approved body, responsible for collecting their contributions 
and for organising, on their behalf, the treatment of the waste by entering into 
contracts with sorting operators for that purpose. Those provisions seek to 
implement at national level, in relation to the waste from such products, the 
objectives of Directive 2008/98/EC of the European Parliament and of the Council 
of 19 November 2008 on waste.  
10 The Order of 3 April 2014, referred to in paragraph 3, includes standard terms in 
an annex which, in particular, define the scale of financial support payable to 
sorting operators, the amount of which is set according to targets for the recovery 
of waste and for the employment of socially disadvantaged people. That order 
granted the approval for the textiles, household linen and footwear waste sector to 
a sole company, Eco TCL, a private body, created and managed by those who 
place the goods on the market in that sector. It is not clear from the documents in 
the file whether another body has been approved for that purpose or whether any 
of those who place the goods on the market have chosen to arrange for themselves 
for the treatment of the waste from those products.  
11 It follows from the provisions of the Order of 3 April 2014 and from the standard 
terms annexed thereto that the approved body must adjust the amount of the 
contributions received from those who place the goods on the market to the level 
which is strictly necessary to enable it to meet its obligations, namely the payment 
of financial support to sorting operators according to the scale established by the 
order as well as various awareness-raising and prevention activities, without being 
able to make a profit or loss and without carrying out activities in other fields. It is 
clear from the file and in particular from the inquiry undertaken by the Sixth 
Chamber of the Judicial Division, in accordance with Article R. 623-1 of the code 
de justice administrative (Administrative Justice Code), that a State representative, 
appointed by the State, attends the meetings of the board of directors of this 
company, without, however, having a right to vote, is informed of the terms of the 
financial investments proposed by the company prior to their approval by the 
board of directors and is entitled to receive all documents relating to the financial 
management of the company so that, in the event of its non-compliance with the 
rules of sound financial management, he may inform the relevant State authorities 
which may issue a fine of up to 30 000 euros or suspend or [Or. 7] even withdraw 
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the approval. Subject to those provisos, Eco TLC freely determines its own 
management choices. In particular, the funds intended for payment of the 
contributions are not subject to any specific deposit requirement.  
12 In those circumstances, the response to the plea that the support paid to the sorting 
operators for the recovery of material, in accordance with the scale provided for 
by the contested order, constitutes State aid and that the contested order providing 
for the revaluation of that scale is unlawful since neither it nor the Order of 
3 April 2014, introducing the provision in question which it amends, was notified 
to the European Commission in advance, depends on the reply to the question as 
to whether Article 107 of the Treaty on the Functioning of the European Union 
must be interpreted as meaning that a system such as that described in 
paragraphs 9 to 11, whereby a private, non-profit eco-body, approved by the 
public authorities, receives financial contributions from those who place a 
particular category of product on the market and who enter into a contract with it 
to that effect, in return for a service consisting in the organisation, on their behalf, 
of their obligation to treat the waste from the products which they place on the 
market, and redistributes to operators, approved by it on the basis of standard 
terms agreed by the State, who are responsible for the sorting and recovery of that 
waste, sums the amount of which is set by the order approving the eco-body, on 
the basis of environmental and social targets,  must be regarded as State aid within 
the meaning of that article.  
13 That question is decisive for the outcome of the case upon which the Conseil 
d’Etat must give judgment and presents a serious difficulty. It is for that reason 
appropriate to refer it to the Court of Justice of the European Union under 
Article 267 of the Treaty on the Functioning of the European Union and, pending 
a ruling by the Court of Justice, to stay the proceedings relating to the application.  
HAS DECIDED AS FOLLOWS: 
------------ 
[…] 
Article 2: The proceedings relating to the application are stayed until the Court of 
Justice has given a preliminary ruling on the following question: 
Must Article 107 of the Treaty on the Functioning of the European Union be 
interpreted as meaning that a system such as that described in paragraphs 9 to 11, 
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?  
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[…] [Or. 8] […]