Case C-194/09 P

Alcoa Trasformazioni Srl

v

European Commission

(Appeal – State aid – Preferential electricity tariff – Finding that there is no aid – Measure amended and extended – Decision to initiate the procedure under Article 88(2) EC – Existing or new aid – Regulation (EC) No 659/1999 – Article 1(b)(v) – Obligation to state reasons – Principles of legal certainty and the protection of legitimate expectations)

Summary of the Judgment

1. Appeals – Grounds – Review by the Court of Justice of the assessment of the facts and evidence – Possible only where the clear sense of the evidence has been distorted

(Art. 225 EC; Statute of the Court of Justice, Art. 58)

2. State aid – Examination by the Commission – Factors to be taken into consideration

(Arts. 87 EC and 88 EC)

3. State aid – Commission decision to initiate a formal procedure to investigate a State measure – Judicial review – Limits

(Art. 88(2) and (3), EC; Council Regulation No 659/1999, Art. 6)

4. European Union law – Principles – Protection of legitimate expectations – Commission decision on State aid which does not question its assessment in an earlier decision – Breach of the principle of the protection of legitimate expectations – No such breach

5. State aid – Commission decision to initiate a formal procedure to investigate a State measure which has been provisionally classified as new aid – Obligation to state reasons – Scope

(Arts. 88(2), EC and 253 EC)

6. State aid – Existing aid and new aid – Change affecting the substance of a measure which was not initially classified as aid

(Arts. 87 EC and 88 EC)

7. State aid – Existing aid and new aid – Distinction based on objective factors

(Arts. 87 EC and 88 EC)

1. In accordance with Article 225 EC and Article 58 of the Statute of the Court of Justice, in an appeal the Court of Justice does not have jurisdiction to establish and assess the relevant facts, save when it is alleged that those facts are distorted. If the facts are not distorted by the General Court, the latter has sole jurisdiction to assess the facts.

(see paras 39, 42)

2. The method by which aid is financed may render the entire aid scheme it is intended to fund incompatible with the common market. In such a case, the Commission is required to examine the aid by taking into account the effects of its method of financing.

(see para. 48)

3. The purpose of the preliminary stage of the procedure for reviewing aid under Article 88(3) EC, which is governed by Articles 4 and 5 of Regulation No 659/1999 laying down detailed rules for the application of Article 93 of the EC Treaty, is to allow the Commission to form a prima facie opinion as to whether the aid in question is compatible in whole or in part with the common market. That stage is separate from the investigation stage envisaged by Article 88(2) EC, which is governed by Articles 6 and 7 of that regulation and is designed to enable the Commission to be fully informed of all the facts of the case. As is apparent from Article 6 of Regulation No 659/1999, the decision to initiate the formal investigation procedure is to include a preliminary assessment by the Commission as to the aid character of the proposed measure and set out any doubts as to its compatibility with the common market.

The Commission is required to adopt a decision to initiate that procedure if an initial examination does not enable it to satisfy itself that the measure in question is compatible with the common market. Consequently, any review by the General Court of the legality of such a decision must necessarily be limited, in so far as, where the applicants challenge the Commission’s assessment classifying the disputed measure as State aid, review by the European Union judicature is limited to ascertaining whether or not the Commission has made a manifest error of assessment.

(see paras 57-58, 60-61)

4. The right to rely on the principle of the protection of legitimate expectations extends to any person in a situation in which a European Union institution has caused him to entertain expectations justified by precise assurances provided to him. However, if a prudent, alert economic operator could have foreseen the adoption of a Union measure likely to affect his interests, he cannot plead that principle if the measure is adopted.

As far as concerns State aid, the principle of the protection of legitimate expectations can be infringed when the Commission alters its appraisal of a measure on the basis only of a more rigorous application of the Treaty rules on State aid. In such a case, the applicants are entitled to expect that a Commission decision reversing its previous approach will give them the time necessary to address that change of approach.

Such a situation must be distinguished from that in which the Commission does not, in the contested decision, question its assessment of the measure examined in an earlier decision, but entertains doubts concerning the measure at issue on account of, first, the fact that its conclusions in the earlier decision were of limited duration and based on the circumstances prevailing at a given time and, second, the changes which the measure concerned by that decision underwent. In such a case, the earlier decision cannot give rise to a legitimate expectation that the Commission’s conclusions in that decision will be extended to a new method of financing.

(see paras 71-74)

5. The requirements to be satisfied by the statement of reasons, for the purpose of Article 253 EC, depend on the circumstances of each case, in particular the content of the measure in question, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may have in obtaining explanations.

With regard to the preliminary stage of investigating a measure that has not previously been examined, it is permissible for the Commission merely to summarise the relevant issues of fact and law, include a preliminary assessment as to the aid character of the State measure in question and set out its doubts as to the measure’s compatibility with the common market.

(see paras 96, 102)

6. The fact alone that a measure which has not been found to constitute aid continues to be implemented, in some cases following an extension of the legal act which introduced it, cannot convert it into State aid and, more specifically, new aid. On the other hand, if changes have been made to the very substance of such a measure, it can be examined only in the light of the rules applicable to new aid.

(see paras 110-112)

7. The concept of aid, whether existing or new, corresponds to an objective situation and cannot depend on the conduct or statements of the institutions.

(see para. 125)

JUDGMENT OF THE COURT (Second Chamber)

21 July 2011 ( )

(Appeal – State aid – Preferential electricity tariff – Finding that there is no aid – Measure amended and extended – Decision to initiate the procedure under Article 88(2) EC – Existing or new aid – Regulation (EC) No 659/1999 – Article 1(b)(v) – Obligation to state reasons – Principles of legal certainty and the protection of legitimate expectations)

In Case C‑194/09 P,

APPEAL under Article 56 of the Statute of the Court of Justice, brought on 29 May 2009,

Alcoa Trasformazioni Srl, established in Portoscuso (Italy), represented by M. Siragusa, avvocato, T. Müller-Ibold and T. Graf, Rechtsanwälte, and F. Salerno, avocat,

applicant,

the other party to the proceedings being:

European Commission, represented by N. Khan, acting as Agent, with an address for service in Luxembourg,

defendant at first instance,

THE COURT (Second Chamber),

composed of J.N. Cunha Rodrigues, President of the Chamber, A. Rosas, U. Lõhmus, A. Ó Caoimh and P. Lindh (Rapporteur), Judges,

Advocate General: N. Jääskinen,

Registrar: C. Strömholm, Administrator,

having regard to the written procedure and further to the hearing on 24 June 2010,

after hearing the Opinion of the Advocate General at the sitting on 23 September 2010,

gives the following

Judgment

1 The present appeal by Alcoa Trasformazioni Srl (‘Alcoa’) seeks to have set aside the judgment of the Court of First Instance of the European Communities (now ‘the General Court’) of 25 March 2009 in Case T‑332/06 Alcoa Trasformazioni v Commission (‘the judgment under appeal’), by which that court dismissed Alcoa’s action for the partial annulment of Commission Decision 2006/C 214/03, notified to the Italian Republic by letter of 19 July 2006, initiating the procedure laid down in Article 88(2) EC, concerning State aid C 36/06 (ex NN 38/06) – Preferential electricity tariff to energy-intensive industries in Italy (OJ 2006 C 214, p. 5) (‘the contested decision’), in so far as that decision relates to the electricity tariffs applicable to the two aluminium plants owned by Alcoa.

Legal context

2 Article 1 of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article [88 EC] (OJ 1999 L 83, p. 1), entitled ‘Definitions’, provides as follows:

‘For the purposes of this Regulation:

(a) “aid” shall mean any measure fulfilling all the criteria laid down in Article [87(1) EC];

(b) “existing aid” shall mean:

(i) ... all aid which existed prior to the entry into force of the Treaty in the respective Member States, that is to say, aid schemes and individual aid which were put into effect before, and are still applicable after, the entry into force of the Treaty;

(ii) authorised aid, that is to say, aid schemes and individual aid which have been authorised by the Commission or by the Council;

…

(v) aid which is deemed to be an existing aid because it can be established that at the time it was put into effect it did not constitute an aid, and subsequently became an aid due to the evolution of the common market and without having been altered by the Member State. Where certain measures become aid following the liberalisation of an activity by Community law, such measures shall not be considered as existing aid after the date fixed for liberalisation;

(c) “new aid” shall mean all aid, that is to say, aid schemes and individual aid, which is not existing aid, including alterations to existing aid;

…

(f) “unlawful aid” shall mean new aid put into effect in contravention of Article [88(3) EC];

…’

3 Under Article 2(1) of Regulation No 659/1999, ‘any plans to grant new aid shall be notified to the Commission in sufficient time by the Member State concerned’. Article 3 of the regulation provides that new aid ‘shall not be put into effect before the Commission has taken, or is deemed to have taken, a decision authorising such aid’.

4 Article 4(1) to (4) of Regulation No 659/1999 provides as follows:

‘1. The Commission shall examine the notification as soon as it is received. Without prejudice to Article 8, the Commission shall take a decision pursuant to paragraphs 2, 3 or 4.

2. Where the Commission, after a preliminary examination, finds that the notified measure does not constitute aid, it shall record that finding by way of a decision.

3. Where the Commission, after a preliminary examination, finds that no doubts are raised as to the compatibility with the common market of a notified measure, in so far as it falls within the scope of Article [87](1) [EC], it shall decide that the measure is compatible with the common market ... . The decision shall specify which exception under the Treaty has been applied.

4. Where the Commission, after a preliminary examination, finds that doubts are raised as to the compatibility with the common market of a notified measure, it shall decide to initiate proceedings pursuant to Article [88] (2) [EC] (hereinafter referred to as a “decision to initiate the formal investigation procedure”).’

5 Article 6(1) of Regulation No 659/1999 provides as follows:

‘The decision to initiate the formal investigation procedure shall summarise the relevant issues of fact and law, shall include a preliminary assessment of the Commission as to the aid character of the proposed measure and shall set out the doubts as to its compatibility with the common market. The decision shall call upon the Member State concerned and upon other interested parties to submit comments within a prescribed period which shall normally not exceed one month. In duly justified cases, the Commission may extend the prescribed period.’

6 Article 7(1) of Regulation No 659/1999 provides that ‘the formal investigation procedure shall be closed by means of a decision as provided for in paragraphs 2 to 5 of this Article’. Those paragraphs provide that the Commission may decide that the notified measure does not constitute aid, that the notified aid is compatible with the common market, that the notified aid may be considered compatible with the common market if certain conditions are complied with, or that the notified aid is not compatible with the common market.

7 With regard to measures which are not notified, Article 10(1) of Regulation No 659/1999 provides that ‘[w]here the Commission has in its possession information from whatever source regarding alleged unlawful aid, it shall examine that information without delay’. Article 13(1) of the regulation provides that such examination is to result in a decision to initiate the formal investigation procedure, where appropriate.

8 The procedure for existing aid schemes is laid down in Articles 17 to 19 of Regulation No 659/1999. Under Article 18, where the Commission ‘concludes that the existing aid scheme is not, or is no longer, compatible with the common market, it shall issue a recommendation proposing appropriate measures to the Member State concerned’. Where the Member State concerned does not accept the proposed measures, the Commission may, under Article 19(2) of that regulation, initiate a formal investigation procedure.

Background to the dispute

9 The facts giving rise to the dispute, as set out in the judgment under appeal and in the observations submitted to the Court by the parties, may be summarised for the purpose of this judgment as follows.

10 The appellant, Alcoa, is a company governed by Italian law which owns two plants producing primary aluminium in Italy, located in Portovesme, in Sardinia, and Fusina, in the Veneto region. The plants were transferred to the appellant by Alumix SpA as part of the latter’s privatisation.

11 By Decision 96/C 288/04, notified to the Italian Republic and published on 1 October 1996 (OJ 1996 C 288, p. 4) (‘the Alumix decision’), the Commission closed the procedure which it had initiated on 23 December 1992, and extended on 16 November 1994, concerning, inter alia, the tariff for supplying electricity charged by ENEL, the long‑standing electricity supplier in Italy, to those two plants. The tariff had been set by Decision No 13 of 24 July 1992 of the Comitato interministeriale dei prezzi (the Joint Ministerial Committee for Prices) (‘IPC Decision No 13/92’). The Commission concluded that the tariff, which was applicable until 31 December 2005 in accordance with Article 2 of the Decree‑Law of 19 December 1995 (GURI No 39 of 16 February 1996, p. 8) (‘the 1995 Decree-Law’), did not constitute State aid within the meaning of Article 87(1) EC.

12 That electricity tariff was based on the marginal production costs and part of the costs set by ENEL.

13 The Commission concluded that, by applying that tariff for the production of aluminium to the Portovesme and Fusina plants, ENEL was behaving like an operator acting under normal market conditions because the tariff permitted the supply of electricity to undertakings which are its major consumers in areas where there is significant over‑capacity in terms of electricity production.

14 By Decision No 204/99 of the Autorità per l’energia elettrica e il gas (the Electricity and Gas Authority) of 29 December 1999, administration of the electricity tariff was transferred to local electricity distributors. ENEL, its local electricity distributor, then charged Alcoa for the supply of electricity at the standard tariff and no longer at the tariff laid down in the 1995 Decree-Law. ENEL granted Alcoa a reimbursement, referred to on its electricity bill, which was financed by means of a parafiscal levy on all electricity consumers in Italy and corresponded to the difference between the tariff charged and the tariff laid down in the 1995 Decree-Law.

15 By Decision No 148/04 of the Electricity and Gas Authority of 9 August 2004, the Cassa Conguaglio per il settore elettrico (Equalisation Fund for the Electricity Sector) (‘the Equalisation Fund’), a public body, was appointed to administer the electricity tariff in place of local distributors. In that capacity, the Equalisation Fund itself reimbursed Alcoa for the difference between the tariff charged to Alcoa by ENEL and the tariff laid down by the 1995 Decree-Law, by means of the same parafiscal levy.

16 In 2005, Decree-Law No 35 of 14 March 2005 (GURI No 111 of 14 May 2005, p. 4), converted into law, after amendment, by Law No 80 of 14 May 2005 (ordinary supplement to GURI No 91 of 14 May 2005) (‘the 2005 Decree-Law’) was adopted by the Italian authorities. Article 11(11) thereof provided that the preferential tariff applied to both Alcoa’s plants was to be extended until 31 December 2010. That provision was not notified to the Commission.

17 The 2005 Decree-Law also provided that the Electricity and Gas Authority was to review the preferential tariff annually. In accordance with that authority’s Decision No 217/05 of 13 October 2005, that tariff was to be increased each year, with effect from 1 January 2006, by a maximum of 4% per year, in step with any increase in prices recorded on the European stock exchanges of Amsterdam (the Netherlands) and Frankfurt (Germany).

18 In the contested decision, the Commission was uncertain whether the tariff granted to Alcoa constituted State aid and was doubtful as to whether it was compatible with the common market, in accordance with Article 87(1) EC. It stated that it had become aware of Article 11(11) of the 2005 Decree-Law during other proceedings, namely those which led to the adoption of Decision 2005/C 30/06, notified to the Italian Republic by letter of 16 November 2004, initiating the procedure laid down in Article 88(2) EC, concerning State aid C 38/2004 (Ex NN 58/04) – Aid for Portovesme Srl (OJ 2005 C 30, p. 7) (‘the Portovesme Decision’).

19 In paragraphs 40 and 46 of the grounds of the contested decision, the Commission stated that it was necessary for it to establish whether the tariff at issue constituted State aid. According to the Commission, the reduction in the price of electricity constituted a considerable economic advantage for an undertaking manufacturing aluminium. That reduction was financed by State resources, namely by means of a parafiscal levy paid by all electricity consumers in Italy to the Equalisation Fund. The reduction threatened to distort competition and was capable of affecting trade between Member States. The Commission inferred from this that the reduction fell within Article 87(1) EC.

20 At paragraph 47 of the contested decision, the Commission observed that, as it was not notified of Article 11(11) of the 2005 Decree-Law, the measure at issue was to be deemed unlawful within the meaning of Article 1(f) of Regulation No 659/1999 and that its previous findings in the Alumix Decision, to the effect that the preferential tariff granted to Alcoa was not existing aid, prevented the measure at issue from being regarded as existing aid.

21 Next, the Commission expressed doubts as to whether the measure at issue was compatible with the common market at paragraphs 49 and 78 of the contested decision, concerning the aid granted to the Fusina plant and that granted to the Portovesme plant respectively.

22 Lastly, at paragraphs 80 and 81 of the contested decision, the Commission requested the Italian Republic to submit any observations and to provide any information relevant to the assessment of the measure at issue within one month of receipt of the contested decision. It pointed out that Article 88(3) EC has suspensory effect and that, under Article 14 of Regulation No 659/1999, it could require the Member State to recover unlawful aid from the beneficiary.

The action before the General Court and the judgment under appeal

23 On 29 November 2006, Alcoa brought an action before the General Court for annulment of the contested decision in so far as it concerns the tariff for supplying electricity charged to its plants in Fusina and Portovesme or, in the alternative, for annulment of the decision in so far as it classifies that tariff as unlawful new aid.

24 Alcoa raised three pleas in law in support of its action. With its first plea, it claimed that, in the contested decision, the Commission wrongly classified the electricity tariff payable by its plants as State aid, even though the tariff, which was equivalent to a market tariff, conferred no advantage on them. With its second plea, Alcoa complained that the Commission disregarded the principles of the protection of legitimate expectations and legal certainty, on the ground that the contested decision was inconsistent with the Alumix decision. Lastly, with its third plea, which it submitted in the alternative, Alcoa claimed that the Commission wrongly examined the measure at issue using the procedure applicable to new aid and not that applicable to existing aid.

25 In the judgment under appeal, the General Court dismissed the action.

26 With regard to the first plea, the General Court found, first of all, that the classification of a measure as State aid in a decision to initiate the formal investigation procedure is merely provisional and that a review by the General Court of the legality of such a decision is limited to ascertaining whether or not the Commission made a manifest error of assessment in forming the view that it was unable to resolve all the difficulties on that point during its initial examination of the measure concerned.

27 The General Court added, after noting that Alcoa did not challenge the Commission’s assessment that the resources used to finance the tariff at issue constitute State resources, that the Commission did not make a manifest error of assessment in taking the provisional view that the preferential tariff conferred an advantage on Alcoa’s plants. On that point, the General Court also dismissed as irrelevant Alcoa’s arguments that the Commission ought to have established whether the tariff at issue corresponded to a market tariff and whether the criteria on the basis of which the Commission found in the Alumix decision that no advantage had been conferred remained valid. The General Court rejected Alcoa’s argument that the Commission had failed in its duty to state reasons, inter alia by failing to examine those criteria, and observed that the question whether the tariff granted to the plants concerned was a market tariff required a complex economic assessment which it was for the Commission to carry out as part of the formal investigation procedure.

28 With regard to the second plea, the General Court considered whether the Commission, by classifying the preferential tariff as new aid, disregarded the principles of the protection of legitimate expectations and legal certainty, upon which Alcoa was entitled to rely following the Alumix decision.

29 The General Court stated that it is clear from the application and the Alumix decision that that decision related only to the 1995 Decree-Law, which was valid for only 10 years. It added that, in the contested decision, the Commission mentions that the extension, of which it was not notified, of the tariff until 2010 could constitute State aid. The General Court observed that the Commission did not question its assessment of the measure examined in the Alumix decision and concluded that Alcoa could not be certain that the Commission would decide that the tariff granted to it did not constitute State aid.

30 With regard to the third plea, the General Court observed that, according to established case-law, existing aid would have to be regarded as a new aid scheme if the actual substance of the scheme were altered or the aid extended. The Court concluded from this that, where a measure that the Commission considered not to constitute State aid is extended or altered with regard to its very substance, the Commission can examine it only under the procedural rules applicable to new aid.

31 The General Court held that, in the present case, the measure at issue cannot be regarded as existing aid not only because it covers a period that is different from that examined in the Alumix decision but also because the finance arrangements for the measure were altered from the measure examined in that decision.

Forms of order sought by the parties

32 By its appeal, Alcoa claims that the Court should:

– set aside the judgment under appeal;

– annul the contested decision in so far as it concerns the electricity tariffs applicable to the aluminium plants owned by Alcoa;

in the alternative,

– refer the case back to the General Court for re-examination in accordance with the judgment of the Court of Justice;

and, in either case,

– order the Commission to pay the costs.

33 The Commission contends that the appeal should be dismissed and Alcoa ordered to pay the costs.

The appeal

34 Alcoa puts forward two grounds in support of its appeal. With the first ground, it seeks a ruling from the Court that the General Court erred in law in finding that the Commission was entitled to initiate a formal investigation procedure without considering whether the conclusions of the Alumix decision had become invalid. The second ground of appeal alleges misapplication of the procedure for new aid.

35 The two grounds of appeal are closely linked to the temporal and material scope of the Alumix decision, to which, Alcoa claims, the General Court failed to have regard. Alcoa deals with the temporal scope of that decision in the fourth part of the first ground of appeal and in the second part of the second ground and with its material scope in an argument claiming that the electricity tariff was not substantially altered, which is put forward in the fourth part of the first ground of appeal and in the third part of the second ground.

36 It is appropriate to examine the appeal by beginning with an assessment of those parts of the grounds and that argument.

The fourth part of the first ground of appeal and the second part of the second ground of appeal, relating to the temporal scope of the Alumix decision

Arguments of the parties

37 With the fourth part of the first ground of appeal and the second part of the second ground, Alcoa criticises the General Court for finding, at paragraphs 105 to 107 of the judgment under appeal, that the Alumix decision was for a limited period. By so doing, the General Court misconstrued that decision and erred in law. Alcoa maintains, first, that the Alumix decision does not expressly refer to the 1995 Decree-Law, which provided that the electricity tariff referred to in that measure was to apply for a period of 10 years, and does not impose any express or implied limitation as regards the duration of its validity. Second, Alcoa adds that, even if the Alumix decision had been for a limited period, the finding in that decision that there was no aid is of general validity, which goes beyond the confines of any limitation in time.

38 The Commission contends that the General Court correctly examined the Alumix decision in the light of the 1995 Decree-Law, which expressly limited the tariff at issue to 10 years.

Findings of the Court

39 In accordance with Article 225 EC and Article 58 of the Statute of the Court of Justice, in an appeal, the Court of Justice does not have jurisdiction to establish and assess the relevant facts, save where it is alleged that those facts are distorted (see, to that effect, Case C‑136/92 P Commission v Brazzelli Lualdi and Others [1994] ECR I‑1981, paragraphs 49 and 66, and Joined Cases C‑24/01 P and C‑25/01 P Glencore and Compagine Continentale v Commission [2002] ECR I‑10119, paragraph 65).

40 The assessment of the General Court at paragraph 107 of the judgment under appeal that the Alumix decision was for a limited period is based on certain findings. First, at paragraph 105 of that judgment, the General Court found that, in the Alumix decision, the Commission had taken a view on the tariff for supplying electricity which ENEL was to charge Alcoa’s plants from 1996 to 2005. Next, in the same paragraph, the General Court observed that, even though the Alumix decision did not refer to the 1995 Decree-Law, Article 2 of which set the duration of the tariff laid down in IPC Decision No 13/92, Alcoa nevertheless expressly referred to that Decree-Law in its application, the General Court deeming it appropriate to cite a passage from it which reflected Alcoa’s observations. According to that passage, the privatisation of Alumix SpA required the support of the Italian Government in order to establish an energy tariff for the two plants in question with ENEL, possibly by agreeing on a future long‑term contract (10 years) at prices that were competitive at European level. The General Court cites further from that passage, adding that the arrangements for handling the excess charges set out in IPC Decision No 13/92 were to be abolished from 31 December 2005 and that, after that date, the arrangements would be brought into line with those established for all users. Lastly, the General Court observed, at paragraphs 14 and 65 of the judgment under appeal, that the electricity tariff charged to Alcoa’s two plants was extended by the 2005 Decree-Law until 31 December 2010.

41 Alcoa does not challenge those findings or claim that the General Court distorted the facts.

42 If the facts are not distorted by the General Court, it has sole jurisdiction to assess the facts. It was therefore entitled, without erring in law, to find, at paragraph 106 of the judgment under appeal, that the Commission’s assessment of the electricity tariff at issue for the period from 1996 to 2005 had been carried out by taking into consideration the market conditions as foreseeable by the Commission for that period. The General Court was also entitled, without erring in law, at paragraph 107 of that judgment, to endorse the Commission’s point of view by reproducing the words it used in the contested decision, to the effect that its approval of that tariff in the Alumix decision was of limited duration precisely because it was based on an economic assessment of the circumstances prevailing at a given time and that, consequently, that approval could not be relied on to cover the extension of the measure provided for in the 2005 Decree-Law.

43 It follows that the fourth part of the first ground of appeal and the second part of the second ground of appeal must be rejected.

The argument claiming that the electricity tariff examined in the Alumix decision was not substantially altered, put forward in the fourth part of the first ground of appeal and in the third part of the second ground

Arguments of the parties

44 Alcoa submits that the General Court incorrectly rejected as unfounded its argument that the changes in the administration of the electricity tariff in 1999 and 2004 were not substantive but purely technical. Alcoa states that the reimbursement made by ENEL and the transfer of the administration of the tariff to the Equalisation Fund did not alter the analysis in the Alumix decision to the effect that the tariff in question did not constitute aid. Those changes related solely to the manner in which the tariff is granted and by whom, whereas the level of the tariff, which is the key issue, never changed.

45 The Commission replies that the shift from a situation in which Alcoa paid its supplier in accordance with the preferential tariff approved by the Alumix decision to a situation in which Alcoa pays a price freely set by its supplier before being reimbursed by the Equalisation Fund in order to reduce its net costs to the level of the preferential tariff cannot be classified simply as technical changes.

Findings of the Court

46 The General Court stated, at paragraphs 64 and 65 of the judgment under appeal, that in arriving at the provisional view that an advantage was conferred on Alcoa, the Commission had relied, first, on the extension until 2010 of the tariff laid down in the 1995 Decree-Law, subject to a maximum possible increase of 4%, and, second, on the transfer of the administration of that tariff to the Equalisation Fund, which reimbursed Alcoa directly with the difference between the electricity tariff charged to its plants and the tariff laid down in that Decree-Law. Those two factual findings, relating to the changes introduced by Article 11(11) of the 2005 Decree-Law and by Decision No 148/04 of 9 August 2004 and Decision No 217/05 of 13 October 2005 of the Electricity and Gas Authority, are not disputed by Alcoa.

47 At paragraph 68 of the judgment under appeal, the General Court found that that reimbursement mechanism was an intrinsic part of the preferential tariff enjoyed by Alcoa and that the Commission was therefore entitled not to rule out the possibility that it conferred an advantage, one of the conditions for classifying a measure as aid within the meaning of Article 87(1) EC.

48 That assessment of the General Court reflects the approach adopted by the Court of Justice that the method by which aid is financed may render the entire aid scheme incompatible with the common market, necessitating, in such a case, an examination of the aid which takes into account the method of its financing (see Joined Cases C‑261/01 and C‑262/01 van Calster and Others [2003] ECR I‑12249, paragraph 49).

49 In the present case, the General Court pointed out, at paragraphs 107 and 131 of the judgment under appeal, that it is clear from the contested decision that the mechanism for financing the tariff laid down in the 2005 Decree-Law, as compared with the tariff laid down by the 1995 Decree-Law, entailed a shift from a market tariff to a tariff that was reduced by means of State resources.

50 In the light of the rules on State aid, given the potential consequences highlighted in the contested decision of the changes in the method of financing, it must be held that the General Court did not err in law in finding, at paragraph 130 of the judgment under appeal, that the measure examined in the contested decision was distinct from that examined in the Alumix decision and in rejecting as unfounded, at paragraph 134 of that judgment, Alcoa’s argument that those changes were not substantive.

51 The argument put forward by Alcoa in the fourth part of the first ground of appeal and the third part of the second ground of appeal to the effect that the changes in question were not substantive must therefore be rejected as unfounded.

52 It is necessary to examine the first and second grounds of appeal in the light of those findings.

The first ground of appeal, alleging that insufficient account was taken of the Alumix decision

53 With the first ground of appeal, Alcoa seeks a ruling that the General Court erred in law in finding that the Commission was entitled to initiate a formal investigation procedure without considering whether the conclusions of the Alumix decision had become invalid. This ground of appeal is divided into six parts. In the first part, Alcoa claims that the General Court confined its review to manifest error, as regards the classification of the measure at issue as State aid. The second part alleges failure to have regard to the case‑law and the principles of legal certainty and the protection of legitimate expectations. The third part seeks a ruling that the two main factors on which the General Court relied in finding that the Commission was entitled to initiate the formal investigation procedure are insufficient. The fourth part, relating to the temporal scope of the Alumix decision, was rejected as unfounded at paragraph 43 above. The fifth part alleges infringement of the principles of sound administration and the right to be heard. Lastly, the sixth part alleges failure to take proper account of the scope of the duty to state reasons.

The first part of the first ground of appeal, alleging that the General Court’s review was confined, incorrectly, to manifest error

– Arguments of the parties

54 In the first part of the first ground of appeal, Alcoa claims that the General Court erred in law, in particular at paragraph 61 of the judgment under appeal, by confining its review of the contested decision to manifest error, as regards the classification of the measure in question as State aid. According to Alcoa, in so doing, the General Court refrained from carrying out a judicial review in a situation where judicial protection is essential for protecting companies against unwarranted formal investigation procedures.

55 Alcoa draws attention to the difference between the opening of a formal investigation procedure concerning measures which, it has been specifically concluded, do not constitute State aid, and the procedure relating to measures in respect of which no such conclusion has been reached. It claims that, in the former case, the Commission has heightened obligations of preliminary investigation and reasoning in order to justify the opening of a formal investigation procedure.

56 The Commission replies that, in its view, the level of the General Court’s review, namely that which applies to a provisional decision, was adequate.

– Findings of the Court

57 The preliminary stage of the procedure for reviewing aid under Article 88(3) EC, which is governed by Articles 4 and 5 of Regulation No 659/1999, is intended to allow the Commission to form a prima facie opinion as to whether the aid in question is compatible in whole or in part with the common market. That stage is separate from the investigation stage envisaged by Article 88(2) EC, which is governed by Articles 6 and 7 of that regulation and is designed to enable the Commission to be fully informed of all the facts of the case (see Case C‑390/06 Nouva Agricast [2008] ECR I‑2577, paragraph 57).

58 As is apparent from Article 6 of Regulation No 659/1999, the decision to initiate the formal investigation procedure is to include a preliminary assessment of the Commission as to the aid character of the proposed measure and set out any doubts as to its compatibility with the common market.

59 The General Court correctly referred to the function of the preliminary stage, at paragraphs 58 to 60 of the judgment under appeal, pointing out that it is distinct from the formal investigation procedure.

60 The General Court correctly observed in particular, at paragraph 58 of the judgment under appeal, that the Commission is required to open the formal investigation procedure if an initial examination does not enable it to satisfy itself that the measure in question is compatible with the common market.

61 The General Court correctly inferred from this, at paragraph 61 of the judgment under appeal, that any review by that Court of the legality of a decision to initiate the formal investigation procedure must necessarily be limited and rightly concluded, at paragraph 62 of that judgment, that in an action against such a decision, where the applicants challenge the Commission’s assessment classifying the disputed measure as State aid, review by the European Union judicature is limited to ascertaining whether or not the Commission has made a manifest error of assessment.

62 Alcoa’s argument that the General Court should have carried out a more detailed analysis and not confined its review to manifest error of assessment in the present case because of the Commission’s earlier decision relating to Alcoa, namely the Alumix decision, cannot succeed because, as stated at paragraph 50 above, the General Court correctly found that the measure at issue in the contested decision was distinct from the measure examined in the Alumix decision.

63 It follows that the first part of the first ground of appeal must be rejected as unfounded.

The second part of the first ground of appeal, alleging failure to have regard to the case‑law and the principles of legal certainty and the protection of legitimate expectations

– Arguments of the parties

64 Irrespective of the standard of review applicable, Alcoa argues, with the second part of the first ground of appeal, that the General Court erred in law by failing to take account of the case‑law and the principles of legal certainty and the protection of legitimate expectations, which require account to be taken of earlier decisions in the same case.

65 According to Alcoa, it is apparent from Case C‑47/91 Italy v Commission [1994] ECR I‑4635 that the Commission was required to take account of the Alumix decision and to reconsider whether the factors on which that decision was based had changed. The General Court erred in law, at paragraph 70 of the judgment under appeal, by finding that the Commission was not required to establish ‘whether the criteria on the basis of which [it] found in the Alumix decision that no advantage had been conferred remained valid’. Referring to Joined Cases C‑182/03 and C‑217/03 Belgium and Forum 187 v Commission [2006] ECR I‑5479, Alcoa adds that it was entitled to rely on the assumption that the Commission’s conclusions in the Alumix decision would not change, as long as the facts on which that decision was based remained valid.

66 The Commission contends that it was not under any obligation to take account of the Alumix decision.

– Findings of the Court

67 The General Court found, at paragraph 24 of the judgment in Italy v Commission, that when the Commission has before it a specific grant of aid alleged to be made in pursuance of a previously authorised scheme, it cannot at the outset examine it directly in relation to the Treaty. Prior to the initiation of any procedure, it must first examine whether the aid is covered by the general scheme and satisfies the conditions laid down in the decision approving it. If it did not do so, the Commission could, whenever it examined an individual grant of aid, go back on its decision approving the aid scheme and jeopardise the principles of the protection of legitimate expectations and legal certainty.

68 However, it should be noted that in the present case, unlike the measure concerned in Italy v Commission, the measure at issue is not individual aid forming part of a general aid scheme. As stated at paragraph 50 above, the measure at issue is distinct from that examined in the Commission’s earlier decision, namely the Alumix decision.

69 It follows that the considerations set out in Italy v Commission relating to individual aid measures adopted in the context of a general aid scheme are irrelevant here.

70 Alcoa then relies on Belgium and Forum 187 v Commission in support of its argument that, in accordance with the principles of legal certainty and the protection of legitimate expectations, it could have expected the Commission to adhere to its conclusions in the Alumix decision.

71 It is established case‑law that the principle of legal certainty requires that European Union legislation must be certain and its application foreseeable by those subject to it (see, in particular, Belgium and Forum 187 v Commission, paragraph 69, and Case C‑67/09 P Nuova Agricast and Cofra v Commission [2010] ECR I‑0000, paragraph 77). The right to rely on the principle of the protection of legitimate expectations extends to any person in a situation in which a European Union institution has caused him to entertain expectations which are justified by precise assurances provided to him. However, if a prudent and alert economic operator could have foreseen the adoption of a European Union measure likely to affect his interests, he cannot plead that principle if the measure is adopted (see Belgium and Forum 187 v Commission, paragraph 147; Case C‑519/07 P Commission v Koninklijke FrieslandCampina [2009] ECR I‑8495, paragraph 84; and Case C‑537/08 P Kahla Thüringen Porzellan v Commission [2010] ECR I‑0000, paragraph 63).

72 It is apparent from paragraph 71 of Belgium and Forum 187 v Commission that the Commission altered its appraisal of the measure in question in that case on the basis only of a more rigorous application of the Treaty rules on State aid. At paragraphs 161 and 167 of that judgment, the Court found that the appellants were entitled to expect that a Commission decision reversing its previous approach would give them the time necessary to address that change in approach and concluded that the plea alleging infringement of the principle of the protection of legitimate expectations was well founded.

73 However, that case‑law is not applicable in the present case, since, as the General Court correctly held at paragraph 107 of the judgment under appeal, in the contested decision the Commission does not question its assessment of the measure examined in the Alumix decision. The General Court clearly indicated, correctly, in that paragraph that the Commission entertained doubts concerning the electricity tariff laid down in the 2005 Decree-Law on account of, first, the fact that its conclusions in the Alumix decision were of limited duration and based on the circumstances prevailing at a given time and, second, the changes which the tariff laid down in that decision underwent.

74 Consequently, the Alumix decision cannot have given rise to a legitimate expectation that the Commission’s conclusions in that decision would be extended to the tariff laid down in the 2005 Decree-Law.

75 It follows that the General Court did not undermine Alcoa’s legitimate expectations by finding, at paragraph 70 of the judgment under appeal, that the Commission was not required to establish whether the criteria on the basis of which it found in the Alumix decision that no advantage had been conferred remained valid.

76 As regards the claim alleging infringement of the principle of legal certainty, it must be noted that Alcoa has simply pleaded that principle without identifying any grounds in the judgment under appeal or any analysis carried out by the General Court that are in breach of that principle. That claim must therefore be rejected.

77 The second part of the first ground of appeal must therefore be rejected.

The third part of the first ground of appeal, alleging that the factors relied on to justify the opening of a formal investigation procedure were insufficient

– Arguments of the parties

78 With the third part of the first ground of appeal, Alcoa submits that the General Court erred in law, at paragraphs 67 and 68 of the judgment under appeal, by relying essentially on two factors in concluding that the Commission was entitled to initiate a formal investigation procedure in connection with the tariffs granted to it for supplying electricity. The first of those factors is the funding of the tariffs by State resources and the second the fact that Alcoa obtains reimbursement via a mechanism applied by the Equalisation Fund which leads to a reduction in the final tariff for supplying electricity that Alcoa would have to pay but for that mechanism. Alcoa maintains that those two factors are insufficient because they were already present at the time of the Alumix decision and did not prevent the Commission from concluding that the measures in question did not constitute aid. It points out in that regard, first, that the preferential tariffs which it enjoyed at the time were imposed on ENEL by the State, which wholly owned ENEL, and were therefore financed by the State, and, second, that those tariffs led, in purely formal terms, to a ‘reduction’ in the tariffs generally applicable.

79 The Commission considers that, by the third part of the first ground of appeal, Alcoa simply repeats other arguments.

– Findings of the Court

80 It should be noted that, in its presentation of what it regards as the common features of the tariffs based on the 1995 Decree-Law and those based on the 2005 Decree-Law, Alcoa fails to mention the changes made to the former in 1999 and 2004, which are not disputed.

81 It thus omits to point out that, as is apparent from paragraphs 15, 65 and 66 above, the tariff which it was charged under the 1995 Decree-Law was replaced by a tariff which was reduced by means of a refund financed by a parafiscal levy administered by the Equalisation Fund.

82 In view of the relevance of those characteristics for the purpose of classifying a measure as aid, the General Court did not err in law in drawing attention to those characteristics, as indicated at paragraph 50 above.

83 Thus, the General Court was correct in finding, at paragraph 68 of the judgment under appeal, that, on its own, the finding concerning the reimbursement method in question explains why the Commission could not rule out, during the preliminary phase, that Alcoa enjoyed an advantage for the purpose of Article 87(1) EC.

84 Moreover, the General Court was entitled to state, at paragraph 58 of the judgment under appeal, that if an initial examination does not enable the Commission to overcome all the difficulties raised by the question whether the measure examined constitutes aid for the purposes of Article 87(1) EC, it is required to open the formal investigation procedure, unless, in the course of that initial examination, the Commission is able to satisfy itself that the measure at issue would in any event be compatible with the common market, even if it were aid (see also, by analogy, Case C‑367/95 P Commission v Sytraval and Brink’s France [1998] ECR I‑1719, paragraph 39 and the case‑law cited, and Case C‑431/07 P Bouygues and Bouygues Télécom v Commission [2009] ECR I‑2665, paragraph 61). In those circumstances, the General Court was in a position properly to conclude, in essence, at paragraph 70 of the judgment under appeal, by reference in particular to paragraph 58, that the question whether the tariff granted to the plants was a market tariff called for a complex economic assessment giving rise to doubts which could be more effectively addressed under the formal investigation procedure.

85 Consequently, the third part of the first ground of appeal must be rejected as unfounded.

The fifth part of the first ground of appeal, alleging infringement of the principle of sound administration and the right to be heard

– Arguments of the parties

86 Alcoa submits that the Italian Republic was not given the opportunity to submit its observations on the classification of the measure at issue as new aid during the preliminary investigation phase and that the General Court erred in law by failing to recognise that the Commission had thus infringed the principle of sound administration and the right to be heard.

87 The Commission contends that Alcoa is thereby raising a new plea which it did not put forward before the General Court and that it is therefore inadmissible. It also states that, in any event, the Italian Republic was heard on the classification of the measure at issue as new aid, as is apparent from paragraph 40 the judgment under appeal.

– Findings of the Court

88 In an appeal the jurisdiction of the Court of Justice is in principle confined to review of the findings of law on the pleas argued before the General Court (see, in particular, Case C‑266/05 P Sison v Council [2007] ECR I‑1233, paragraph 95 and the case‑law cited). Therefore, a party cannot in principle put forward for the first time before the Court of Justice a plea in law which it has not raised before the General Court because that would amount to allowing the Court of Justice to review the legality of the findings of the General Court, in the light of pleas of which the latter did not take cognisance.

89 It is clear from the judgment under appeal that the issue raised by Alcoa in the fifth part of the first ground of appeal was not considered by the General Court after a complaint was raised before it by Alcoa.

90 It is clear that, at paragraphs 39 and 40 of the judgment under appeal, the General Court considered whether the Italian Republic had adopted a position on the classification of the measure at issue as new aid, albeit in the context of its analysis of an argument raised by the Commission seeking to establish that the application at first instance was inadmissible on the ground that the Italian Republic had not objected with sufficient clarity to that classification.

91 The Court therefore finds that the fifth part of the first ground of appeal is inadmissible.

The sixth part of the first ground of appeal, alleging failure to take proper account of the scope of the duty to state reasons

– Arguments of the parties

92 With the sixth part of its first ground of appeal, Alcoa argues that the General Cour failed to take proper account of the Commission’s duty to state reasons. In view of the irreversible consequences of initiating the formal investigation procedure and the existence in the present case of an earlier Commission decision, namely the Alumix decision, the General Court was wrong to state that there was no need to give the reasons for the difference between that decision and the decision at issue. That failure to give adequate reasons rendered any legal analysis and review of the contested decision difficult. Alcoa submits that the contested decision should have contained a thorough preliminary assessment of any possible economic changes in relation to the Alumix decision.

93 The Commission contends that this part of the ground of appeal must be rejected as unfounded.

– Findings of the Court

94 Contrary to what is claimed by Alcoa, the General Court did not state in the judgment under appeal that there was no need to give reasons for the difference between the Alumix decision and the contested decision.

95 In the complaint alleging failure to take proper account of the scope of the duty to state reasons, Alcoa appears to be referring to paragraphs 78 to 89 of the judgment under appeal. As the Advocate General observed at point 127 of his Opinion, of those paragraphs, Alcoa appears to be referring more particularly to paragraph 88 of the judgment, in which the General Court rejected its argument that the Commission failed to fulfil its obligation to provide a statement of reasons in the contested decision in the light of the criteria applied in the Alumix decision.

96 It is settled case-law that the statement of reasons required by Article 253 EC 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 competent Court to exercise its power of review. The requirements to be satisfied by the statement of reasons depend on the circumstances of each case, in particular the content of the measure in question, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may have in obtaining explanations (see, inter alia, Case C‑89/08 P Commission v Ireland [2009] ECR I‑11245, paragraph 77 and the case-law cited).

97 It must be noted, as Alcoa itself recognised, that at paragraph 78 of the judgment under appeal the General Court correctly referred to the duty to state reasons laid down in Article 253 EC and the requirements which that entails.

98 Alcoa nevertheless claims that the General Court failed to recognise the inadequacy of the reasons given in the contested decision in the light of the Alumix decision. In its view, the Commission should have explained in what way the contested decision differed from the Alumix decision.

99 That criticism is based on the premiss that the contested decision concerned the same tariff as that examined in the Alumix decision, thus necessitating a detailed examination of the factors which led to a different conclusion.

100 However, as held at paragraph 50 above, the General Court did not err in finding, at paragraph 130 of the judgment under appeal, that the measure examined in the contested decision was distinct from that examined in the Alumix decision.

101 It follows that, as is apparent from paragraph 88 of the judgment under appeal, there was no need to carry out a detailed examination of the Commission’s economic assessment in the Alumix decision or the reasons why that decision was no longer applicable.

102 With regard to the preliminary phase of investigating a measure that has not been examined previously, the General Court correctly held, at paragraph 79 of the judgment under appeal, that it is permissible for the Commission merely to summarise the relevant issues of fact and law, include a preliminary assessment as to the aid character of the State measure in question and set out its doubts as to the measure’s compatibility with the common market.

103 Consequently, the General Court did not err in law in finding, at paragraphs 81 and 82 of the judgment under appeal, that the Commission had given adequate reasons for the contested decision by explaining clearly the grounds which led it to conclude provisionally that the measure at issue constituted aid and stating that it had serious doubts as to whether it was compatible with the common market.

104 The sixth part of the first ground of appeal must therefore be rejected as unfounded.

105 Since none of the arguments raised by Alcoa in its first ground of appeal has been upheld, it must be rejected in its entirety.

The second ground of appeal, alleging misapplication of the procedure for new aid

106 That second plea is divided into four parts. The first part alleges that the case‑law concerning the extension of aid compatible with the common market for a further period was incorrectly applied. By the second part, considered at paragraphs 37 to 43 above, Alcoa claims that the General Court misinterpreted the temporal scope of the Alumix decision. The third part seeks a declaration that the General Court erred in law by taking as its basis the technical alterations that occurred in 1999 and 2004 in confirming the use of the procedure for new aid. The fourth part alleges infringement of the principles of legal certainty and the protection of legitimate expectations.

The first part of the second ground of appeal, alleging that the case‑law concerning the extension of aid compatible with the common market for a further period was incorrectly applied

– Arguments of the parties

107 Alcoa claims that the General Court erred in law by finding, at paragraph 128 of the judgment under appeal, that its judgment in Joined Cases T‑127/99, T‑129/99 and T‑148/99 Diputación Foral De Álava and Others v Commission [2002] ECR II‑1275 was applicable and constituted grounds for considering that a time extension alone may convert a measure into new aid. Alcoa states that that judgment concerned aid that was considered compatible with the common market. However, there is a fundamental difference between a measure which has been classified as aid compatible with the common market and a measure regarded as not constituting aid. In the case of aid that is compatible with the common market, the fact that the measure is of limited duration is one of the reasons for which it is possible to find that such aid is compatible. Its extension can therefore only convert the measure in question into new aid. On the other hand, where there has been a finding that there is no aid, a change in market conditions may convert the measure into aid, but an extension of the measure as such cannot have that effect. In such circumstances, Article 1(b)(v) of Regulation No 659/1999 requires the measure to be treated as existing aid rather than new aid.

108 The Commission replies that the General Court did not err in recognising that the extension of the tariff laid down in the 1995 Decree-Law justified the conclusion that the measure at issue was new aid.

– Findings of the Court

109 It should be noted that Diputación Foral de Álava and Others v Commission concerned aid introduced before the Member State concerned entered the common market and was therefore existing aid. The General Court found in that judgment that, because of the amendment to the duration of the aid in question, which had been extended, it should be regarded as new aid.

110 However, it does not follow from that case‑law of the General Court, which concerns the extension of a measure which constitutes new aid, that it may be applied to a measure which, by contrast, has been found not to constitute aid. The fact alone that such a measure continues to be implemented, in some cases following an extension of the legal act which introduced it, cannot convert it into State aid.

111 However, the General Court does not state that the mere extension of a measure regarded by the Commission as not constituting aid converts that measure into new aid. It simply states, at paragraph 129 of the judgment under appeal, that the Commission can examine the extended measure only under the rules applicable to new aid.

112 The Court finds that, in the present case, the General Court did not rely simply on the extension by the 2005 Decree-Law of the preferential tariff granted to Alcoa in finding, at paragraph 133 of the judgment under appeal, that the Commission had not made a manifest error of assessment by examining the measure at issue in the light of the rules applicable to new aid, but also drew attention, at paragraphs 131 and 132 of that judgment, to the changes made to the very substance of that measure by the Italian Republic.

113 It follows that Article 1(b)(v) of Regulation No 659/1999, which provides that existing aid is aid which is deemed to be existing aid because it can be established that at the time it was put into effect it did not constitute aid, and subsequently became aid due to the evolution of the common market without having been altered by the Member State, is not applicable.

114 In those circumstances and in accordance with Article 1(c) of Regulation No 659/1999, since the Commission suspected that the tariff laid down in the 2005 Decree-Law constituted aid, it was required to examine it under the procedural rules applicable to new aid.

115 It must therefore be held that the General Court was correct in finding, at paragraph 133 of the judgment under appeal, that the Commission had not made a manifest error of assessment by examining the measure at issue under the rules of procedure applicable to new aid and not under those applicable to existing aid.

116 The first part of the second ground of appeal must therefore be dismissed as unfounded.

The third part of the second ground of appeal, seeking a ruling that the General Court erred in law by taking as its basis the technical alterations that occurred in 1999 and 2004 in confirming the use of the procedure for new aid

– Arguments of the parties

117 Alcoa submits that the General Court incorrectly confirmed that the Commission was entitled to use the procedure for new aid on the ground that the tariffs granted to Alcoa no longer consisted in the application by ENEL of the tariff laid down by the 1995 Decree-Law but in the grant of a reimbursement by the Equalisation Fund. By so doing, the General Court extended the ambit of the contested decision, which was directed solely against the extension of the duration of the tariffs granted to Alcoa under the 2005 Decree-Law, not against those purely technical changes which occurred in 1999 and 2004.

118 Alcoa adds that the Commission was notified of those changes and raised no objection to them. The Commission refrained from mentioning in the contested decision that the technical changes of 1999 and 2004 called for a fresh investigation. Nor did it mention that fact in another decision dealing with the preferential tariff granted to Alcoa, namely the Portovesme decision. Moreover, in Decision N/490/2000 of 1 December 2004 concerning State aid – Italy, stranded costs in the electricity sector (OJ 2005 C 250, p. 9) (‘the stranded costs decision’), the Commission took the view that tariffs such as those granted to Alcoa are general charges already covered by an existing aid scheme. Alcoa therefore complains that the General Court rejected the stranded costs decision as irrelevant and relied on the technical changes in question to endorse the Commission’s use of the procedure for new aid.

119 The Commission contends that Alcoa denies the very content of the contested decision in asserting that it relates solely to the extension of the tariff laid down in the 1995 Decree-Law. The General Court did not extend the ambit of the contested decision by holding that the shift from a real tariff, namely that on which the Alumix decision was based, to a purely notional tariff, which was examined in the contested decision, constituted a substantive change. Moreover, contrary to what is claimed by Alcoa, the Commission states that it had already objected to the technical alterations of 1999 and 2004 in the Portovesme decision, specifically by initiating a formal investigation procedure in the case on which that decision was based. As regards the stranded costs decision, the Commission submits that it relates to the stranded costs borne by ENEL and is irrelevant to the advantages conferred on Alcoa in terms of electricity tariffs.

– Findings of the Court

120 The facts of the case and the presentation of the contested decision in the judgment under appeal are not disputed by Alcoa in its appeal. It simply clarifies a point, not disputed by the Commission and referred to at paragraph 14 above, to the effect that the changes to the tariff laid down in the 1995 Decree-Law occurred in 1999, that is before the 2005 Decree-Law was adopted.

121 It is apparent from the presentation of the contested decision in the judgment under appeal that it refers not only to the extension of the tariff laid down in the 1995 Decree-Law but also to the changes which occurred in the administration of that tariff, namely the fact that the tariff charged was partially reimbursed by means of a parafiscal levy and was administered by the Equalisation Fund.

122 The General Court stated, at paragraph 17 of the judgment under appeal, that those changes led the Commission to take the view, set out at paragraphs 45 to 46 of the contested decision, that it needed to establish whether the preferential tariff granted to Alcoa constituted State aid, in view of the reduction of the tariff which it entailed, the economic advantage which it represented for Alcoa, the fact that the reduction was funded through State resources and the effects of the tariff on competition and trade between Member States.

123 It follows that by carrying out an assessment, at paragraph 68 of the judgment under appeal, of the inferences drawn by the Commission, in terms of advantage, from the reimbursement of the difference between the tariff charged to ENEL and the tariff extended by the 2005 Decree-Law, the General Court did not extend the ambit of the contested decision.

124 Nor did it extend the ambit of that decision by finding, at paragraph 132 of the judgment under appeal, that the measure at issue consisted no longer in ENEL applying the tariff laid down in the 1995 Decree-Law, which was equivalent to a market tariff, but in the grant of a reimbursement by the Equalisation Fund from public resources, in order to offset the difference between the tariff charged by ENEL and that laid down in the 1995 Decree-Law, as extended by the 2005 Decree-Law.

125 Alcoa’s arguments to the effect that, first, those changes occurred before the 2005 Decree-Law and, second, the Commission was aware of the changes and had raised no objection, cannot preclude that institution from examining them as new aid, as defined in Article 1(c) of Regulation No 659/1999. Indeed, the Court has previously held that the concept of aid, whether existing or new, corresponds to an objective situation and cannot depend on the conduct or statements of the institutions (see Commission v Ireland, paragraph 72).

126 With regard to the relevance of the stranded costs decision, it should be noted that the General Court correctly pointed out, at paragraph 113 of the judgment under appeal, that that decision concerned not the reimbursement in favour of Alcoa’s plants but the scheme under which ENEL was reimbursed for the stranded costs resulting from the liberalisation of the electricity market.

127 Moreover, the General Court was also correct in adding, in essence, at paragraph 114 of the judgment under appeal, that even if the Commission had been informed, as part of the procedure relating to the stranded costs decision, of the scheme from which Alcoa’s plants benefited, the latter would not have been entitled, in the absence of any precise assurances given to it by the Commission, to believe with any certainty that the extension of the preferential tariff did not constitute new aid.

128 It follows that the General Court did not err in its assessment at paragraphs 112 to 114 of the judgment under appeal of the impact of the stranded costs decision on the contested decision by holding, at paragraph 112, that Alcoa’s argument was irrelevant.

129 The third part of the second ground of appeal must therefore be rejected as unfounded.

The fourth part of the second ground of appeal, alleging infringement of the principles of legal certainty and the protection of legitimate expectations

– Arguments of the parties

130 With the fourth part of the second ground of appeal, Alcoa submits that, by upholding the Commission’s use of the procedure for new aid, the General Court failed to have proper regard for the principles of legal certainty and the protection of legitimate expectations. In view of the Commission’s earlier finding that the tariff granted to Alcoa did not constitute aid, the Commission should at the very least have used the procedure for existing aid. Alcoa refers in that connection to a number of Commission decisions and relies on the case‑law established by Belgium and Forum 187 v Commission.

131 The Commission replies that the General Court did not disregard the general principles of law and that Alcoa bases its arguments once again on the erroneous assumption that Article 11(11) of the 2005 Decree-Law is simply an extension of the measure approved in the Alumix decision. The Commission decisions to which Alcoa refers are irrelevant, either because they concern cases in which it was not possible to recover the aid – an issue which has not arisen in the present case – or because they relate to the continuation of schemes on the same terms as when they were first approved, which is not the case here.

– Findings of the Court

132 By the fourth part of the second ground of appeal, Alcoa essentially repeats the arguments which it put forward in the second part of the first ground of appeal, albeit applying them to the procedure for new aid.

133 It should be noted, first, that the General Court correctly cited, at paragraphs 102 and 103 of the judgment under appeal, the relevant case‑law referred to at paragraph 71 above.

134 Second, for the reasons set out at paragraphs 71 to 75 above, the Commission’s findings in the Alumix decision could not have led Alcoa legitimately to believe that the conclusions of that decision could be extended to the tariff examined in the contested decision.

135 Consequently, the General Court was entitled to find, at paragraph 108 of the judgment under appeal, that the Alumix decision could not have given rise to any legitimate expectation on the part of Alcoa that the conclusions in the Alumix decision would continue to be valid. The General Court correctly inferred from this, at paragraph 109 of that judgment, that the Commission did not infringe the principle of the protection of legitimate expectations when it adopted the contested decision, which was based on the procedure for new aid.

136 The claim alleging infringement of the principle of legal certainty must be rejected for the same reason as that set out at paragraph 76 above.

137 In the light of the foregoing considerations, the fourth part of the second ground of appeal must be rejected, as must the second ground of appeal in its entirety.

138 Since neither of the grounds raised in the appeal has been successful, the appeal must be dismissed.

Costs

139 According to the first paragraph of Article 122 of the Rules of Procedure, where the appeal is unfounded, the Court is to make a decision as to costs. Under Article 69(2) of the Rules of Procedure, which applies to appeal proceedings by virtue of Article 118 of those rules, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Commission has applied for costs to be awarded against Alcoa and Alcoa has been unsuccessful, Alcoa must be ordered to pay the costs of the appeal proceedings.

On those grounds, the Court (Second Chamber) hereby:

1. Dismisses the appeal;

2. Orders Alcoa Trasformazioni Srl to pay the costs.

[Signatures]