Information;Judgment — ECLI:EU:T:2019:610
Date: 2019-09-17
Language of the case: English
Court formation: First Chamber
Subject matter: State aids;Competition
Procedure: Action for annulment - unfounded
Origin: Ireland

summary of the pleas in law on which it is based. It must, accordingly, specify the nature of the grounds on which it is based, so that a mere abstract statement of the grounds does not satisfy the requirements of the Statute of the Court of Justice of the European Union and the Rules of Procedure (see judgment of 1 July 2009, ThyssenKrupp Stainless v Commission, T‑24/07, EU:T:2009:236, paragraph 156 and the case-law cited). Similar requirements apply where a submission is made in support of a plea in law (see judgment of 14 December 2005, Honeywell v Commission, T‑209/01, EU:T:2005:455, paragraph 55 and the case-law cited). The applicant must indicate the specific complaints on which the Court is asked to rule and, at the very least in summary form, the legal and factual particulars on which those complaints are based (see judgment of 31 March 1992, Commission v Denmark, C‑52/90, EU:C:1992:151, paragraph 17 and the case-law cited). 80 In the present case, the Commission criticises Aughinish for making, in paragraph 5.16 of the application in Case T‑130/07, a ‘passing reference’ or a simple ‘unparticularised allusion’ to the Joint Declaration of the Council and of the Commission at the time of the adoption of Directive 2003/96. 81 In that paragraph of the application Aughinish complains that the Commission, in establishing the selective nature of the exemption at issue, had ‘read the relevant documents somewhat selectively’, namely Directive 2003/96, since the Commission itself had ‘appreciated the importance of references to the “nature and the logic of the tax system” in recital 22 of the preamble to th[at] directive and the Joint Council/Commission Declaration [at the time of the adoption of that directive]’. 82 In a footnote in paragraph 5.15 of the application in Case T‑130/07, Aughinish referred specifically to the ‘Council and Commission Declaration in the Addendum au projet de procès-verbal of the Council Meeting of 27 October 2003 (Council Doc. 14140/03 ADD 1), attached at Annex A40’. 83 In recital 34 of the contested decision, the Commission itself had noted that ‘when Directive 2003/96 … was adopted, the Council and the Commission jointly declared [footnote: Addendum au projet de [procès-]verbal, 14140/03, of 24.11.2003, http://register.consilium.eu.int/pdf/en/ 03/st14/st14140-ad01.en03.pdf] “Energy products should essentially be subject to a Community framework when used as heating fuel or motor fuel”’ and that ‘it c[ould] be considered that it [wa]s in the nature and the logic of the tax system to exclude from the scope of the framework dual uses and non-fuel uses of energy as well as mineralogical processes’. 84 The third indent in paragraph A.10.2 of the draft minutes of 24 November 2003, relating to the Council meeting of 24 November 2003, attached as Annex A.40 to the application in Case T‑130/07, reproduces the exact wording of recital 34 of the contested decision, as set out in paragraph 83 above. 85 In the light of the foregoing, it must be found that the complaint put forward by Aughinish in paragraph 5.16 of the application in Case T‑130/07, which is based on the text of the Joint Declaration of the Council and of the Commission at the time of the adoption of Directive 2003/96, is sufficiently clear and precise, in the context of the present case, to have enabled the Commission and the General Court to understand that Aughinish criticised the Commission for failing to adopt, in the contested decision, a position consistent with its joint declaration with the Council at the time of the adoption of Directive 2003/96, according to which ‘it [wa]s in the nature and the logic of the tax system to exclude from the scope of the framework dual uses and non-fuel uses of energy as well as mineralogical processes’. 86 On those grounds, the plea of inadmissibility raised by the Commission with regard to the first plea in law must be rejected in so far as Aughinish refers to the Joint Declaration of the Council and of the Commission at the time of the adoption of Directive 2003/96. 87 As to the substance of the first plea in law, alleging the incorrect application of the criterion for classifying a measure as State aid, based on the selectivity of that measure, it clearly relates to recitals 32 to 40 of the contested decision, the content of which is set out in paragraph 57 above. 88 In the light of the legal framework set out in paragraphs 52 to 56 above, it must be stated that, like Ireland in Case T‑129/07 (see, in that regard, paragraph 68 above), Aughinish in Case T‑130/07 produced no evidence establishing that, as alleged, the exemption at issue fell within the nature and general scheme of an Irish system of taxes in the general interest excluding the taxation of dual use of energy products or of some of them, such as the energy products used in metallurgical processes. 89 In so far as Aughinish complains that the Commission, in order to establish the a priori selective nature of the exemption at issue, failed to ascertain whether other industries used heavy fuel oil in their production processes and whether or not they had benefited from a similar exemption and had thus been discriminated, suffice it to note that the dual use of energy products, within the meaning of Article 2(4)(b) of Directive 2003/96, that is to say energy products used both as heating fuel and for purposes other than as motor fuel and heating fuel or for chemical reduction and in electrolytic and metallurgical processes, are not limited to heavy fuel oil. As is apparent from Article 2(1) of Directive 2003/96, the latter applies, on the one hand, to energy products that, besides heavy fuel oil, also include gas oil, kerosene, liquefied petroleum gas (LPG), natural gas, coal and coke, and, on the other hand, to electricity. Aughinish does not pretend that no other industry uses one of those energy products — other than heavy fuel oil — or electricity in their production processes, in the same manner or in a manner comparable to its own use of heavy fuel oil for alumina production. 90 In that regard, as already noted in paragraph 69, the fact that, as is apparent from recital 22 of the contested decision, ‘Ireland refer[red] to the possibility to widen the scope of the relief to cover heavy fuel oil for dual use, or more widely to energy products generally for dual use’ shows, rather, that the dual use of energy products was not generally exempt from the excise duty under the Irish tax system, even though that possibility could be envisaged for the future. 91 Therefore, the interpretation suggested by Aughinish is not such as to invalidate the finding of the Commission in recital 32 of the contested decision that the exemption at issue favoured certain undertakings as it only applied to those, such as Aughinish in its plant in the Shannon region, that used heavy fuel oil for alumina production. 92 Moreover, in so far as Aughinish refers to recital 22 of Directive 2003/96 and to the text of the Joint Declaration of the Council and of the Commission at the time of the adoption of that directive, suffice it to note that they both merely set out that it was in the nature and the logic of the tax system to exclude from the scope of the Community framework for the taxation of energy products and electricity dual uses and non-fuel uses of energy products as well as mineralogical processes, without prejudice to the decision to be taken by each Member State whether or not to tax such uses. Indeed, an exemption of such energy uses could have constituted a general measure that did not involve State aid only if it fell within the nature and the logic of the domestic tax system at issue. However, neither Ireland in Case T‑129/07 nor Aughinish in Case T‑130/07 demonstrated that the exemption at issue fell within the nature and the logic of the Irish tax system, although they bore the burden of proof (see paragraph 55). 93 Lastly, to the extent that Aughinish relies on the text of the Joint Declaration of the Council and of the Commission at the time of the adoption of Directive 2003/96, according to which the Commission would go to the greatest possible lengths to ensure that the measures taken by Member States in accordance with the exemptions and tax reductions laid down in Directive 2003/96 might be considered to be compatible with State aid rules, its arguments can be rejected as unfounded on the same grounds as those already set out in paragraph 70. 94 Since the complaints put forward by Aughinish have all thus been rejected as unfounded, the first plea in law must be rejected. The second plea raised by Aughinish 95 By its second plea, Aughinish criticises the Commission for failing to find, in the contested decision, that the State aid granted by Ireland as from 1 January 2004, on the basis of the exemption at issue, was aid which was compatible with the common market, in accordance with point 51 of the 2001 Environmental aid guidelines. It claims that the Commission applied that paragraph too strictly and literally in the contested decision by finding that, in so far as Aughinish had not paid at least a rate of 20% of the national excise tax which would otherwise have been payable, the exemption constituted State aid which had to be repaid. According to Aughinish, the Commission should have taken an approach based on the effects of the exemption at issue and should, in that context, have taken into account that the exemption was entirely justified having regard to the onerous environmental obligations to which it was subject, such as the ongoing requirement to invest heavily in environmental protection measures at its plant as well as the strictly imposed requirement to burn low-sulphur fuel oil and its involvement in the EU emissions trading scheme. Furthermore, the Commission should have taken account of the investment of approximately EUR 100 million which it had made in constructing a combined heat and power plant which, as from 2006, had enabled it to reduce its carbon emissions and to improve the environmental performance of its plant. The strict approach adopted by the Commission in the contested decision would eventually have put it in a less favourable situation than that of its competitors who were subject to far less onerous environmental obligations in other Member States. Moreover, in the context of the review of the Guidelines on State aid for environmental protection, after 2007, the Commission noted that it was desirable to refine the economic approach of the analysis of State aid and to balance the positive impact of the aid measure in reaching an objective of common interest against its potentially negative side effects, such as the distortion of trade and competition. In response to the Commission’s arguments, Aughinish claims that the judgment of 22 April 2016, Italy and Eurallumina v Commission (T‑60/06 RENV II and T‑62/06 RENV II, EU:T:2016:233), is not relevant in the present case in so far as it relates to the specific factual situation in Italy. 96 The Commission disputes the arguments put forward by Aughinish and claims that the second plea should be rejected as unfounded. 97 The second plea put forward by Aughinish concerns the application point 51 of the 2001 Environmental aid guidelines in the case of the exemption at issue. 98 The arguments put forward by Aughinish clearly refer to recitals 45 to 50 of the contested decision, in which the Commission states the following: ‘(45) The Commission has examined whether the aid granted by [the French Republic], Ireland and [the Italian Republic] as from 1 January 2004 qualifies for an exemption from the prohibition of State aid contained in Article 87(1) of the [EC] Treaty. The aid consists in an exemption from energy tax, and such taxes are not only meant to raise financing for the authorities, but also to reduce the consumption of energy and thereby protect the environment. The 2001 Environmental aid guidelines contain rules for exemptions from environmental taxes. For reasons of equal treatment, transparency and legal certainty, these rules are binding upon the Commission. (46) As regards the period from 1 January 2004, section E.3.2, recitals (47)-(52), of the 2001 Environmental aid guidelines lay down rules applicable to all operating aid in the form of tax reductions or exemptions. As explained in recitals (73) and (74) of [the Alumina I decision], the excise duties on mineral oils can be considered as environmental taxes, they must be considered as existing taxes within the meaning of point 51.2 of the guidelines, they have an appreciable positive impact in terms of environmental protection within the meaning of point 51.2(a) and they may be considered as if they had been decided at the time the excise tax was adopted. Consequently, in accordance with point 51.2 of the guidelines, the provisions in point 51.1 can be applied. … (49) As explained in recital (75) of [the Alumina I decision], the conditions for applying point 51.1(a) of the [2001] Environmental aid guidelines are not fulfilled and therefore only the provisions of point 51.1(b) can be applied in this case. (50) As from 1 January 2004, taxation of mineral oils intended for dual uses, non-fuel uses and mineralogical processes falls outside the scope of harmonised Community measures and therefore, since that date, the exemptions concern domestic taxes imposed in the absence of a Community tax within the meaning of point 51.1(b), second indent, of the [2001] Environmental aid guidelines. That provision requires companies benefiting from the exemptions to pay a “significant proportion” of the national tax. The reason for that is to leave them with an incentive to improve their environmental performance. This follows from the wording of point 51.1(b), first indent, of the guidelines, which allows for tax reductions from a harmonised tax if the beneficiaries pay more than the Community minimum rates “in order to provide firms with an incentive to improve environmental protection”. This also applies where the national tax is significantly higher than comparable taxes in (some) other Member States, as was the case in Italy. In the practice of the Commission …, it has become clear that in general 20% of the domestic tax or the Community minimum that applies to other energy uses … (EUR 15 per tonne) can be regarded as a significant proportion, even though the Community minimum does not apply to the energy use at hand. Therefore, the Commission considers that only the exemption above 20% of the domestic tax or above EUR 15 per tonne, whichever is the lowest of the two, can be considered [to be] compatible with the common market; the exemption up to the level of 20%, or up to EUR 15 per tonne, constitutes incompatible aid.’ 99 In the present case, as is apparent from paragraph 5.66 of the application, Aughinish does not dispute that, in accordance with point 51.2 of the 2001 Environmental aid guidelines, the provisions in point 51.1 thereof could be applied in the case of the exemption at issue, as noted by the Commission in recital 46 of the contested decision. 100 With regard to the application of point 51.1(a) and (b) of the 2001 Environmental aid guidelines, Aughinish itself stated, in paragraph 5.67 of the application ‘that it [wa]s true that following the Commission’s literal approach [concerning the application of point 51 of the 2001 Environmental aid guidelines] … mean[t] that the concerns [set out in that paragraph] [had to] be addressed in a way that would have to be recognised by the Commission’. Therefore, the second plea put forward by Aughinish, in essence, alleges that the Commission failed to examine whether the objective referred to in point 51 of the 2001 Environmental aid guidelines could not be achieved by other methods than those envisaged in that point, namely by way of the obligations incumbent upon Aughinish. 101 In that respect, it is important to recall that the compatibility with the common market of planned aid aimed at environmental protection is assessed in accordance with Article 6 EC in conjunction with Article 87 EC and by reference to the Community guidelines which the Commission has previously adopted for the purposes of such an examination. The Commission is indeed bound by the guidelines and notices that it issues in the area of supervision of State aid where they do not depart from the rules in the Treaty and are accepted by the Member States. The parties concerned are therefore entitled to rely on those guidelines and the Court will ascertain whether the Commission complied with the rules it has itself laid down when it adopted the contested decision (see judgment of 18 November 2004, Ferriere Nord v Commission, T‑176/01, EU:T:2004:336, paragraph 134 and the case-law cited). 102 Moreover, the Commission cannot be accused of incorrectly applying point 51.1(a) and (b) of the 2001 Environmental aid guidelines. 103 Point 51.1 of the 2001 Environmental aid guidelines is worded as follows: ‘[The] exemptions [to tax measures that make a significant contribution to protecting the environment] can constitute operating aid which may be authorised on the following conditions: 1. When, for environmental reasons, a Member State introduces a new tax in a sector of activity or on products in respect of which no Community tax harmonisation has been carried out or when the tax envisaged by the Member State exceeds that laid down by Community legislation, the Commission takes the view that exemption decisions covering a 10-year period with no degressivity may be justified in two cases: (a) these exemptions are conditional on the conclusion of agreements between the Member State concerned and the recipient firms whereby the firms or associations of firms undertake to achieve environmental protection objectives during the period for which the exemptions apply or when firms conclude voluntary agreements which have the same effect. Such agreements or undertakings may relate, among other things, to a reduction in energy consumption, a reduction in emissions or any other environmental measure. The substance of the agreements must be negotiated by each Member State and will be assessed by the Commission when the aid projects are notified to it. Member States must ensure strict monitoring of the commitments entered into by the firms or associations of firms. The agreements concluded between a Member State and the firms concerned must stipulate the penalty arrangements applicable if the commitments are not met. These provisions also apply where a Member State makes a tax reduction subject to conditions that have the same effect as the agreements or commitments referred to above; (b) these exemptions need not be conditional on the conclusion of agreements between the Member State concerned and the recipient firms if the following alternative conditions are satisfied: … – where the reduction concerns a domestic tax imposed in the absence of a Community tax, the firms eligible for the reduction must nevertheless pay a significant proportion of the national tax.’ 104 First, with regard to the application of point 51.1(a) of the 2001 Environmental aid guidelines in the contested decision, the Commission referred, in recital 49 thereof, to recital 75 of the Alumina I decision, in which it had stated the following: ‘In their comments, the beneficiaries submitted that they had undertaken significant environmental investments in return for the exemptions. However, there is no evidence that the beneficiaries concluded any agreements with the Member States concerned whereby they committed to achieve environmental protection objectives during the period for which the exemptions applied. Nor were the tax exemptions subject to conditions that would ensure the same effect as such agreements and commitments. Furthermore it appears that the environmental investments did not go beyond what was necessary to comply with relevant legislation or beyond what was feasible and economical from a commercial point of view. As a consequence, the conditions for applying point 51.1(a) of the 2001 [Environmental aid guidelines] are not fulfilled and only the provisions of point 51.1(b) are applicable in this case.’ 105 It is common ground that, in the procedure in Case T‑130/07, although it claims that it had ‘accepted’ environmental obligations, Aughinish neither alleged nor, a fortiori, demonstrated that it had provided the Commission with evidence of agreements concluded with the Irish authorities whereby it undertook to achieve environmental protection objectives during the period for which the exemption at issue applied, or evidence that the latter was subject to conditions that would ensure the same effect as such agreements and undertakings, or even evidence that the environmental investments made by its plant in the Shannon region went beyond what was necessary to comply with Irish legislation or beyond what was feasible and economical from a commercial point of view. 106 Therefore, the Commission was right to conclude, in recital 49 of the contested decision, that the conditions for applying point 51.1(a) of the 2001 Environmental aid guidelines were not fulfilled. 107 Secondly, with regard to the application of point 51.1(b) of the 2001 Environmental aid guidelines in the contested decision, Aughinish simply criticises the Commission for putting it in a less favourable situation than that of its competitors who were subject to far less onerous environmental obligations in other Member States, by requiring it to repay at least a rate of 20% of the national excise tax. 108 In that respect, it is important to recall that point 51 of the 2001 Environmental aid guidelines forms part of the objective set out in point 50 of those guidelines that ‘in general, the tax measures [for environmental protection] should make a significant contribution to protecting the environment’, specifying that the exemptions do not, by their very nature, undermine the general objectives pursued. It is in that context that under the second indent of point 51.1(b) of the 2001 Environmental aid guidelines the Commission must ensure that the undertakings eligible for exemption pay a ‘significant proportion’ of the national tax, without ruling out that that ‘significant proportion’ may be expressed, as in the contested decision, as a percentage of the applicable national tax. Moreover, that same point of the 2001 Environmental aid guidelines does not imply that the Commission must, in the context of the review that it is required to carry out, also seek to rectify all the discriminatory effects resulting from the differences between the various national taxes applicable. 109 Lastly, in so far as Aughinish refers to the Guidelines on State aid for environmental protection (OJ 2008 C 82, p. 1), suffice it to note that, in accordance with paragraph 202 thereof, the 2001 Environmental aid guidelines remained in force until 1 April 2008, with the result that the exemption at issue could not be examined, as suggested by Aughinish, in the light of principles and rules introduced in the latter guidelines. 110 Consequently, the Commission was right to find in recital 50 of the contested decision that, in accordance with the second indent of point 51.1(b) of the 2001 Environmental aid guidelines, the requirement to pay a ‘significant proportion’ of the national tax meant that Aughinish must pay at least 20% of the normal Irish rate of excise tax, without taking account of the alleged anticompetitive effect that application would have had in practice, given the differences between the various national taxes applicable. 111 Since the complaints put forward by Aughinish have all thus been rejected as unfounded, the second plea in law must be rejected and, therefore, the action in Case T‑130/07 must be dismissed. Costs 112 Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. 113 Since Ireland has been unsuccessful in Case T‑129/07, it must be ordered to pay the costs in that case, in accordance with the form of order sought by the Commission. 114 Since Aughinish has been unsuccessful in Case T‑130/07, it must be ordered to pay the costs in that case, in accordance with the form of order sought by the Commission. On those grounds, THE GENERAL COURT (First Chamber) hereby: 1. Dismisses the actions; 2. Orders Ireland to pay the costs in Case T‑129/07; 3. Orders Aughinish Alumina Ltd to pay the costs in Case T‑130/07. Pelikánová Nihoul Svenningsen Delivered in open court in Luxembourg on 17 September 2019. E. Coulon I. Pelikánová Registrar President Table of contents Events prior to the bringing of the action Events subsequent to the bringing of the action Procedure and forms of order sought Law Single plea in law raised by Ireland in support of its action in Case T 129/07 Pleas in law raised by Aughinish in support of its action in Case T 130/07 The first plea raised by Aughinish The second plea raised by Aughinish Costs * Language of the case: English.