Keywords

Summary



Keywords

1. ECSC – Aid to the steel industry – Not allowed – Derogation – Aid falling under the Sixth Steel Aid Code

(Arts 4(c) CS and 95 CS; General Decision No 2496/96)

2. ECSC – Aid to the steel industry – Not allowed – Derogation – Aid falling under the Sixth Steel Aid Code

(General Decision No 2496/96, Art. 3)

3. ECSC – Aid to the steel industry – Not allowed – Derogation – Aid falling under the Sixth Steel Aid Code

(General Decision No 2496/96, Art. 3)

4. ECSC – Aid to the steel industry – Aid plans for investments contributing to environmental protection

(Arts 4(c) CS and 95 CS; General Decision No 2496/96)

5. ECSC – Aid to the steel industry – Not allowed – Derogation – Aid falling under the Sixth Steel Aid Code

(General Decision No 2496/96)

6. Acts of the institutions – Statement of reasons – Obligation – Scope

(Arts 15 CS and 33 CS)

Summary

1. By derogation from the principle laid down under Article 4(c) CS, in terms of which subsidies or aids in any form whatsoever to the steel industry are prohibited, and in implementation of Article 95 CS, the Sixth Steel Aid Code sets out the conditions under which aid to the steel industry financed by way of State resources may be considered to be compatible with the proper functioning of the common market.

Aid which is not covered by the Code thus remains subject to Article 4(c) CS. Similarly, the Code must be strictly interpreted, since it constitutes a derogation from a principle that something is prohibited.

(see paras 49-50)

2. It follows from Article 3 of the Sixth Steel Aid Code, which provides that aid for environmental protection granted to the steel industry may be deemed compatible with the common market ‘if it is in compliance with the rules laid down in [the Guidelines], in conformity with the criteria for their application to the ECSC steel industry outlined in the Annex to [the Code]’, that the provisions of the Community guidelines on State aid for environmental protection, which apply under the EC Treaty, may be transposed to the steel industry, which falls under the ECSC Treaty, when those provisions satisfy the criteria for their application set out in the Annex to the Code. It is thus particularly significant that the heading to that Annex states that it establishes the ‘criteria for the application of Community guidelines on State aid to the steel industry for environmental protection’. The Code accordingly does not provide for the automatic application of the Guidelines to the steel industry, but specifies in its Annex the conditions which govern that application.

(see paras 51-53)

3. Article 3 of the Sixth Steel Aid Code provides for the Annex to the Code and the Community guidelines on State aid for environmental protection to apply cumulatively, without making any distinction at that stage between different types of investment. The reference made by Article 3 of the Code to the Annex to the Code and the guidelines is accordingly cumulative and not alternative.

That also applies to investment which is purely environmental. The introduction to the Annex to the Code, which provides that ‘the Commission will, as appropriate, impose strict conditions and safeguards so as to avoid general investment aid for new plants or equipment being granted under cover of environmental protection’, obliges the Commission to investigate, should the need arise, whether investment which is notified as being purely environmental in nature does not in truth permit other objectives prohibited by the relevant provisions to be achieved.

(see paras 61-62)

4. As regards planned aid to the steel industry, when the Commission decides to initiate the formal investigation procedure, it is for the Member State and the potential recipient of the aid to put forward arguments to demonstrate that the planned aid meets the exceptions specified in accordance with the Treaty, since the object of the procedure is precisely to ensure that the Commission is fully informed of all the facts of the case.

Although the Commission is required to express its doubts clearly as to the compatibility of the aid when it initiates a formal procedure in order to allow the Member State and other parties concerned to respond as fully as possible, the fact remains that it is for the provider of the aid and, where relevant, the recipient of it to dispel those doubts and to establish that its investment satisfies the condition which allows it to be granted. It follows that, as regards planned investments put forward as having an environmental basis, it is for the authorities of the Member State concerned and for the recipient of the aid to establish that those investments are eligible for aid for environmental protection and, in particular, that they have the environmental objective required by the Community guidelines on State aid for environmental protection and the Annex to the Sixth Steel Aid Code.

(see paras 83-84)

5. Although the Annex to the Sixth Steel Aid Code prohibits investment aid which would have been necessary in any event on economic grounds or which is due to the age of an undertaking’s existing plant, that Annex does not prohibit investment aid which is capable of having an effect on the production process. In such a case, the Annex to the Code requires only that any advantage in regard to lower production costs be deducted. Thus, in order to be eligible for environmental aid, it is not necessary for the notified investments to serve purposes that relate only to environmental protection, to the exclusion of all others, nor is it necessary for the investments to have no impact on production capacity. Investment made for environmental purposes cannot be declared ineligible by reason only of the fact that it may have an impact on production.

(see para. 92)

6. The statement of reasons required by Article 15 CS, an insufficiency or a lack of reasoning in which constitutes an infringement of essential procedural requirements within the meaning of Article 33 CS and is a matter of public policy which the Community judicature must raise of its own motion must be appropriate to the measure at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in question in such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the Community judicature to exercise its power of review. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons meets the requirements of Article 15 CS must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question.

Since the second part of the Annex to the Sixth Steel Aid Code excludes investment made for economic reasons from aid to encourage firms to contribute to significantly improved environmental protection, and since, in order for investment made in an undertaking’s plant to be eligible as aid for environmental protection, the onus is on the authorities of the Member State concerned to establish that it was made for reasons of environmental protection and was the consequence of the voluntary decision of the undertaking to improve on environmental protection, the Commission will, in the absence of evidence put forward by those authorities in that regard, satisfy its duty to state reasons if it merely records that there has been a failure to provide such evidence.

(see paras 130-134, 144-145)