25. 4. 90 Official Journal of the European Communities No C 103/9 
STATE AID 
N 340/89 
(Netherlands) 
(Articles 92 to 94 of the Treaty establishing the European Economic Community) 
(90/C 103/03) 
Commission communication pursuant to Article 93 (2) of 
the EEC Treaty to the other Member States and 
interested parties concerning aid which the Netherlands 
Government has decided to grant to glasshouse growers 
in the form of a preferential tariff for natural gas. 
1. By letter of 13 November 1989, recorded as received 
on 16 November 1989, the Permanent Represen­
tation of the Netherlands to the European 
Communities sent the Commission additional infor­
mation concerning the rate of the abovementioned 
tariff relating to the price of natural gas supplied to 
glasshouse growers applicable when the price of 
heavy fuel oil is HF1 415/tonne or above (rate III). 
This information was supplied in reply to a letter 
from the Commission dated 19 October 1989 (No 
SG(89) D/13186), in which the Commission 
proposed to adopt a position regarding rate III of 
the said tariff at a later date on the basis of the 
information obtained from the bilateral discussions 
still to be held. 
By letter of 28 November 1989 (No SG(89) 
D/23381), the Commission informed the Dutch 
authorities that it had received notification of the 
proposed measure in question and indicated that the 
two-month period for examination of the measure 
would commence only once the Commission staff 
had received the additional information requested at 
the bilateral meeting held on 16 November 1989 
between the staff of the Commission and the Dutch 
Ministry of Agriculture in the presence of represen­
tatives of the Landbouwschap, Gasunie and Vegin. 
The Commission received the additional information 
on 13 December 1989; it acknowledged receipt 
thereof and notified the Dutch authorities that the 
two-month period for examining the proposed 
measure had commenced on that date. 
By letter of 22 December 1989, the Permanent 
Representation of the Netherlands informed the 
Commission that according to the Dutch authorities 
the two-month time limit for examining proposed 
aid measures that had been notified had commenced 
on 29 September 1989 and expired on 29 November 
1989, since the said authorities had, on 29 
September, informed the Commission that: 
— the tariff rates (I and II) to which the 
Commission would raise no objection would be 
applied from 1 October 1989 
application of the third rate (III) would be 
suspended pending the outcome of the bilateral 
meeting to be held shortly. In their letter of 22 December 1989, the Dutch auth­
orities stated that they could therefore apply 
forthwith the contract described in their letter of 
2 August 1989 (rates I, II and III), in its entirety. 
The tariff which was the subject of a contract 
between the supply companies (Gasunie and Vegin) 
and the horticultural representatives (Land­
bouwschap) consisted of three rates according to 
whether the price of heavy fuel oil to which the price 
of natural gas is tied was: 
I. HF1 295/tonne or less, 
II. between HF1 295/tonne and HF1 415/tonne, 
III. HF1 415/tonne or more. 
The Commission informed the Dutch Government, 
on 19 October 1989, that it had no objection to rates 
I and II, since they contained no aid component. In 
the same letter, it also noted that the Dutch auth­
orities had suspended application of tariff rate III 
and informed them that it would refrain from taking 
a position on that rate pending the outcome of the 
abovementioned bilateral discussion. 
After receiving the most recent information from the 
Dutch Ministry of Agriculture on 13 December 
1989, the Commission considered the notification 
concerning the tariff rate III to be complete and was 
able to adopt a position on the matter. 
This rate in the tariff for natural gas charged to 
consumers in the horticultural sector using more 
than 30 000 m3 of gas per year applies when the 
price for heavy fuel oil is HF1 415/tonne or above. 
In these circumstances, the price of gas is only 
partially linked to the price of heavy fuel oil, i.e. it is 
derived chiefly by adding: 
— 80 % of the result obtained by applying the 
following formula: 
P/500 x 38,2 + 0,8 ct/m3 
— 20 % of the result obtained by applying the 
following formula: 
415/500 x 38,2 + 0,8 ct/m3 
In the abovementioned price formulas, P is the 
arithmetic mean, over the twelve months 
immediately prior to the three-month period for 
which the value of P (in HFl/tonne) is being 
NoC 103/10 Official Journal of the European Communities 25. 4. 90 
determined, of the monthly averages of the 
minimum and maximum monthly price quotations 
for heavy fuel oil with a sulphur content of 1 % by 
weight, as published in Piatt's Oilgram Price Report 
under 'Barges fob Rotterdam'. 
When the price of heavy fuel oil is HF1 415/tonne or 
more, therefore, the price of natural gas is subject, in 
part, i.e. 20 %, to a ceiling. 
The price of heavy fuel oil in the Netherlands is 
currently less than HF1 295/tonne; since the gas 
price is subject to a lower limit when the heavy fuel 
oil falls below this level, growers are paying a higher 
price than they would have done if the new tariff 
had not come into effect on 1 October 1989. 
4. Having studied rate III of the tariff in question, the 
Commission takes the view that the partial ceiling 
applied to the indexing of the price of natural gas 
constitutes a new factor which was not present in the 
tariff applied before 1 October 1989 and which 
limits increases in the price of gas. Once the price 
reaches this level, horticultural producers using 
natural gas enjoy a financial advantage. This 
advantage is to be considered as an operating aid. 
Limiting the cost of natural gas for glasshouse horti­
culture encourages growers to produce more at 
intermediate consumption costs which are lower, in 
similar conditions, to the costs borne by growers 
using heavy fuel oil for heating. By enabling Dutch 
glasshouse growers to produce at a lower price than 
growers using fuel oil or growers in other Member 
States, the Dutch measure could distort competition 
and affect trade between Member States. It fulfils 
the criteria set out in Article 92 (1) of the Treaty. 
In the past, with regard to similar measures applied 
to certain categories of consumers, the Commission 
has taken the view that the measures constitute aids 
within the meaning of Article 92 of the Treaty. 
The Court of Justice has reached the same 
conclusion ('); it also found that 'in that sector, 
heating costs account for a large part of production 
costs. If, in such circumstances, the tariff applied to 
those undertakings displays a downward trend which 
is not reflected by the tariffs applicable to under­
takings in other sectors, that is prima facie evidence 
for the conclusion that the preferential tariff 
constitutes aid'. 
(') Decision of the Court of 2 February 1990 in Joined Cases 
67, 68 and 70/85 (paragraphs 28 and 30 of the grounds of 
judgment). 5. At the bilateral meeting held on 16 November 1989, 
the Commission staff proposed the following 
possible solution to the representatives of the Dutch 
ministry, who claimed that the tariff in question was 
a normal commercial tariff: in order for the tariff 
applied to horticultural producers to be considered a 
normal commercial tariff, it would be necessary 
effectively to charge each of the other sectors using 
natural gas a tariff identical or similar to the one 
agreed with the Landbouwschap. 
In the information received on 13 December 1989 
from the Dutch authorities (see point II.2), the latter 
were unable to guarantee that a tariff identical or 
similar to that agreed with the Landbouwschap for 
application in the horticulture sector would be 
offered to all natural gas users for immediate 
application to all those accepting it. It must therefore 
be concluded that the Dutch authorities are unable 
to accept the solution of applying the tariff in 
question across the board. 
6. Since the aid measure is an operating aid, it does not 
fulfil the criteria to qualify for the sole exception 
which might be applicable, under in Article 93 (3) (c) 
of the EEC Treaty; it can provide no lasting 
improvement to the conditions in which the under­
takings in question operate; in addition, as soon as 
the aid measure comes to an end, those undertakings 
will be in the same structural situation as before the 
Dutch measure was applied. The aid cannot 
therefore be considered a measure to facilitate the 
development of the sector concerned within the 
meaning of Article 92 (3) (c) of the Treaty. 
7. In the light of the above, the Commission has 
therefore decided to initiate the procedure provided 
for in Article 93 (2) of the EEC Treaty in respect of 
the aid measure referred to in point 4, and requests 
that the Dutch Government refrain from applying 
rate III of the abovementioned tariff. 
8. As regards the procedure, the Dutch authorities, in 
their letter of 22 December 1989, stated that in their 
view the two-month period for examination of rate 
III of the abovementioned tariff had commenced on 
29 September 1989 (see point 1) and expired on 29 
November 1989 and that, therefore, '... the 
Netherlands may apply the measure in question 
forthwith . . .'. 
It should be emphasized that in its letter No SG(89) 
D/13186 of 19 October 1989 the Commission 
proposed to take a decision concerning rate III of 
the contract at a later date, since the Dutch auth­
orities had announced in their letter of 29 September 
1989 that tariff rate III had been suspended pending 
the outcome of the bilateral meeting, eventually held 
on 16 November 1989. 
25. 4. 90 Official Journal of the European Communities NoC 103/11 
The claim of the Dutch authorities in their letter of 
22 December 1989 that the two-month period (') 
commenced on the date of the letter of 29 
September 1989, which contained the proposal to 
hold a bilateral meeting between the staff of the 
Dutch ministry and the Commission for the purpose 
of obtaining additional information, is unfounded. 
Contrary to the claim of the Dutch authorities in 
their letter of 22 December 1989, the conclusions of 
that meeting were not that the Commission had 
received all the necessary information, but that the 
Commission staff had suggested a possible solution 
to the staff of the Dutch Ministry of Agriculture. 
That solution required the approval of the competent 
authorities of both parties. A definitive answer was 
not given until 13 December 1989, when the 
Ministry of Agriculture forwarded a copy of the 
letter from Gasunie to the Ministry of Economic 
Affairs. The Commission staff maintain that the date 
on which this communication was received 
constitutes the end of the exchange between the 
respective departments regarding rate III of the tariff 
in question and the commencement of the 
two-month period for examination of the measure. 
Notification of rate III of the tariff for the horti­
culture sector could be deemed to be completed at 
that date. 
Under the initiated procedure, the Commission 
therefore informs the Netherlands Government that 
notification of rate III of the abovementioned tariff 
could not be deemed complete until 13 December 
1989 and that it cannot therefore accept that 
Government's claim that that tariff rate could be 
applied from 29 November 1989. In addition, the 
Commission was given no prior notice at that time 
of the Netherlands Government's decision (2). 9. Under the said procedure, the Commission hereby 
gives notice to the Netherlands Government to 
submit its comments on its position within four 
weeks from the date of this letter. 
(In addition, the Commission informs the 
Netherlands Government that it will be giving notice 
to the other Member States and to the other parties 
concerned, by publishing a communication in the 
Official Journal of the European Communities, to 
submit their comments.) 
10. The Commission draws the attention of the 
Netherlands Government to the letter which it sent 
to all Member States on 3 November 1983 
concerning their obligations under Article 93 (3) of 
the EEC Treaty and to the communication published 
in the Official Journal of the European Communities 
No C 318 of 24 November 1983, p. 3, in which it is 
stated that any aid granted illegally, i.e. without a 
final decision having been reached under the 
procedure laid down in Article 93 (2) of the EEC 
Treaty, may be the subject of a request for reimbur­
sement and/or of a refusal to make EAGGF advance 
payments or to charge expenditure relating to 
national measures that directly affect Community 
measures to the EAGGF budget. 
11. The Commission hereby gives the other Member 
States and interested parties notice to submit their 
comments on the measures in question within four 
weeks from the date of publication of this notice to: 
Commission of the European Communities, 
rue de la Loi 200, 
B-1049 Brussels. 
The comments will be communicated to the Netherlands 
Government. 
(') Case 120/73 (Lorentz v. Federal Republic of Germany), 
ECR 1973, p. 1471 et seq. 
(2) Case 120/73 ECR 1973, p. 1471 et seq.