Opinion of the Advocate-General



Opinion of the Advocate-General

1. This reference for a preliminary ruling from the Austrian Verwaltungsgerichtshof (Administrative Court) raises several issues in the field of State aid.

2. In 1996, Austria granted undertakings engaged in the production of goods a rebate of energy tax where the amount of that tax exceeded 0.35% of the net value of their production, but did not notify the measure to the Commission as aid. When in 2001 (2) the Court of Justice held that rebate to constitute aid because it was not available to service undertakings and was thus selective, the Commission examined the measure and decided in 2002 that, for the period from 1996 to 2001, it was compatible with the common market; at that stage, the Commission did not consider whether the 0.35% threshold might also give rise to selectivity. Subsequently, in 2004, it re-examined the aid, which had since been extended to service undertakings, but on that occasion decided that it was selective by reason of the 0.35% threshold, which favoured energy-intensive undertakings, and that it was not compatible with the common market for the years 2002 and 2003.

3. The main proceedings arise out of claims for a rebate submitted by a number of service undertakings in respect of the period from 1996 to 2001, during which the aid in its original form had not been notified.

4. In those circumstances the national court asks essentially whether, for that period, Article 88(3) EC precludes application of the provision limiting the rebate to producers of goods, even if the Commission has since found the aid to be compatible with the common market for that period; and, if so, whether Article 88(3) also requires the rebate to be granted to those who were excluded from it even where their claims were submitted after the Commission’s finding of compatibility.

5. The question of the Commission’s ability to approve aid retroactively is thus explicitly raised. In addition, it will be appropriate to consider the role of national courts in ensuring compliance with State aid rules, in particular whether they may render unlawful aid lawful by ordering that it be granted non-selectively and, if so, subject to what conditions or constraints. Finally, the question has been raised in the proceedings before the Court whether the Commission’s 2004 decision in any way affects its 2002 decision.

Community rules on State aid

6. Pursuant to Article 87(1) EC, (3) save as otherwise provided in the Treaty, ‘any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the common market.’

7. Certain types of aid are however automatically compatible under Article 87(2) and other types, identified in Article 87(3), may be considered compatible with the common market. Of the latter, Article 87(3)(c) lists ‘aid to facilitate the development of certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions to an extent contrary to the common interest’. (4)

8. Article 88(1) EC provides for the Commission to review all measures of State aid granted to undertakings. Under Article 88(2), after giving the parties concerned an opportunity to submit their comments, the Commission may, depending on the view it reaches, require a Member State to abolish or alter a particular aid.

9. Article 88(3) provides:

‘The Commission shall be informed, in sufficient time to enable it to submit its comments, of any plans to grant or alter aid. If it considers that any such plan is not compatible with the common market having regard to Article 87, it shall without delay initiate the procedure provided for in paragraph 2. The Member State concerned shall not put its proposed measures into effect until this procedure has resulted in a final decision.’

10. Council Regulation (EC) No 659/1999 (5) codifies practice for the application of Article 88 EC. It entered into force on 16 April 1999.

11. Articles 2 to 9 of that regulation concern the procedure regarding notified aid. Where the Commission has doubts as to the compatibility of an aid measure with the common market, it is to initiate a formal investigation procedure, governed by Articles 6 and 7. Where it finds that the aid is not compatible with the common market, it is to take a ‘negative decision’.

12. Articles 10 to 15 concern the procedure regarding unlawful aid – that is to say, in this context, aid put into effect in breach of Article 88(3) EC. Under Article 10(1) and (2) of the regulation, where the Commission has information from any source regarding alleged unlawful aid, it is to examine that information without delay. If necessary, it is to request information from the Member State concerned. Where appropriate, under Article 13(1) the examination is to give rise to the initiation of a formal investigation procedure governed by Articles 6 and 7.

13. If the Commission takes a negative decision in those circumstances, it is to require the Member State to recover the aid, in accordance with Article 14, unless recovery would be contrary to a general principle of Community law.

National proceedings and background

14. With effect from 1 June 1996, Austria introduced simultaneously (i) taxes on the supply and consumption of electricity and natural gas, and (ii) a procedure whereby consumer undertakings could claim a rebate of a portion of their tax burden which exceeded 0.35% of net production value. The right to claim a rebate was however limited to undertakings whose activity was primarily the production of goods. (6) I shall refer to that arrangement as ‘the original scheme’.

15. The Austrian authorities did not regard the original scheme as State aid, and therefore did not notify it to the Commission in accordance with Article 88(3) EC.

16. On 10 March 1999, the Austrian Verfassungsgerichtshof (Constitutional Court), called upon to decide on the legality of refusals to grant a rebate to a number of primarily service undertakings, referred two questions to the Court of Justice, asking whether the original scheme constituted State aid.

17. On 8 November 2001 this Court gave judgment in that case, ruling essentially that provision for a rebate of energy taxes does not constitute State aid if it applies to all undertakings, but must be regarded as such if it applies only to undertakings whose activity is shown to be primarily the manufacture of goods. (7)

18. That judgment gave rise to a number of developments.

19. First, on 13 December 2001, the Verfassungsgerichtshof annulled the refusals to grant a rebate for the period 1996 to 2001 to a number of parties, including the first two appellants in the proceedings underlying the present reference for a preliminary ruling. It concluded from the Court’s judgment in Adria-Wien that it was permissible to grant rebates to production businesses but not to refuse them to other businesses on the basis of the provision excluding them, which was to be set aside as the sole part of the scheme whose implementation was prohibited by Article 88(3) EC as a result of the failure to notify.

20. Second, by letters of 15 January and 1 March 2002 in response to an official request, Austria provided the Commission with details of the original scheme. Following examination, the Commission adopted a decision on 22 May 2002 (‘the 2002 decision’). (8) It noted that the scheme was clearly selective, and thus constituted aid, because it applied only to production businesses; (9) the Commission therefore expressly did not examine whether it was also selective by reason of the 0.35% threshold. The Commission then examined the substance of the aid in the light of the 1994 Community guidelines on State aid for environmental protection, (10) and concluded in particular that the original scheme was compatible with point 3.4 of those guidelines, (11) to the effect that temporary relief from new environmental taxes may be authorised where it is necessary to offset losses in competitiveness, particularly at international level. The Commission therefore – while ‘regretting’ that the aid had been granted in breach of Article 88(3) EC – found the original scheme compatible with Article 87(3)(c) EC. That assessment was expressly stated to cover the period from 1 June 1996 to 31 December 2001.

21. Third, on 8 October 2002 but with effect from 1 January 2002 the Austrian authorities amended the original scheme so that the limitation of the right to claim a rebate to production businesses was removed (‘the amended scheme’). (12) The amendment was notified to the Commission, which on 30 April 2003 informed Austria of its decision to initiate an investigation procedure.

22. The appellants in the proceedings underlying the present reference for a preliminary ruling are all undertakings whose primary activity is the supply of services.

23. The first two, Transalpine Ölleitung in Österreich GmbH (‘TAL’) and Planai-Hochwurzen-Bahnen GmbH (‘Planai’) were parties to the previous proceedings before the Verfassungsgerichtshof. The refusals to grant them energy tax rebates for the periods 1996 to 1998 and 1996 to 1997 respectively were thus annulled by that court in its judgment of 13 December 2001. They consequently lodged new claims for a rebate with their respective tax authorities, but these were rejected on the basis of the 2002 decision. The tax authorities essentially considered that decision to have modified, retroactively and with binding force, the legal context underlying the Verfassungsgerichtshof’s judgment, which was therefore no longer relevant to that extent.

24. The third appellant, Gerlitzen-Kanzelbahn-Touristik GmbH & Co. KG (‘Gerlitzen’), applied in September 2002 for a rebate in respect of the years 1999 to 2001; its claim was similarly rejected.

25. Planai and Gerlitzen challenged those refusals before the Verfassungsgerichtshof, which considered that there was no longer any manifest illegality on which it could rule, but which at the appellants’ request referred the cases to the Verwaltungsgerichtshof. (13) TAL for its part appealed directly to the Verwaltungsgerichtshof, which on 12 August 2004 referred the following questions to the Court for a preliminary ruling:

‘(1) Does the prohibition on putting measures into effect under Article 88(3) EC preclude the application of a national legal provision which excludes businesses whose activity is not shown to consist primarily in the manufacture of goods from energy tax rebates and which must therefore be classified as aid within the meaning of Article 87 EC, but which was not notified to the Commission prior to the national entry into force of the rules, even where the Commission has found the measure to be compatible with the common market under Article 87(3) EC for a period in the past and the application for reimbursement relates to taxes payable for that period?

(2) If so, in such a case does the prohibition on putting measures into effect require a rebate even in cases where the applications were made by service businesses after the adoption of the Commission’s decision for assessment periods prior to that date?’

26. Meanwhile however, on 9 March 2004, the Commission had adopted a further decision concerning the compatibility of the amended scheme for the years 2002 and 2003 (‘the 2004 decision).’ (14)

27. It considered that the scheme was selective, and thus constituted aid, because although in theory applicable to all undertakings reaching the threshold of 0.35% of net production value, it was de facto tailored to energy intensive users; nor was it consistent with the internal logic of the energy tax. (15)

28. The Commission assessed the aid in the light of the 2001 Community guidelines on State aid for environmental protection, (16) in particular points 45, 46 (17) and 51 to 53, (18) and considered that the aid did not meet the guidelines. There was no evidence that the tax had an appreciable positive impact in terms of environmental protection or that the rebate had become necessary as a result of a significant change in economic conditions that placed the undertakings concerned in a particularly difficult competitive situation; the tax had not been significantly increased; the rebate was neither limited to 50% of the extra costs nor degressive; finally, there was no evidence that undertakings paid a significant proportion of the tax. (19)

29. The Commission thus found the amended scheme incompatible with the common market, and required Austria to abolish it.

30. Nevertheless, in accordance with Article 14(1) of Regulation No 659/1999, it did not require the aid to be recovered in so far as recovery might infringe legitimate expectations. In particular, it stated that ‘it is conceivable that … the wording of the Court’s answer … in Adria-Wien may have led some beneficiaries to believe in good faith that the national measures at issue before the national court would cease to be selective, and therefore cease to constitute State aid, if their benefit were extended to sectors other than the manufacture of goods’. (20)

31. In their written and oral observations TAL, Planai, Austria and the Commission have discussed not only the national court’s questions as referred (or as the parties consider they should have been referred) but also the significance of the Commission’s 2004 decision concerning the amended scheme.

Assessment

32. It may be appreciated from that outline that the issues explicitly raised in this case are conditioned to some extent by other underlying questions.

33. It seems to me important to bear in mind the basic question to which the Verwaltungsgerichtshof needs an answer in the context of the proceedings before it: as a matter of Community law, to what extent is it authorised and/or required to disapply the national provision limiting entitlement to a rebate to undertakings producing goods?

34. I propose to examine that question in several steps.

The position before the 2002 decision

35. The first step is to consider what the position was during the period from the introduction of the original scheme to the adoption of the 2002 decision.

36. During the whole of that period, the rebates granted under the original scheme constituted unnotified aid.

37. Consequently, the Austrian authorities were precluded by Article 88(3) EC from putting the aid into effect.

38. They none the less did so, in the belief that it constituted a general measure.

39. Once the Court’s judgment in Adria-Wien had established that the rebate was indeed selective and thus constituted aid, the normal course of action incumbent on the Austrian authorities should have been to recover it.

40. They did not do so, but proceedings were brought in the Austrian courts before the Commission had examined the compatibility of the aid with the common market.

41. In those circumstances, as the Court recalled in Adria-Wien , (21) national courts are involved in the system for the review of State aid through the direct effect attributed to the prohibition on implementation of planned aid laid down in the last sentence of Article 88(3) EC. They must offer to individuals the certain prospect that all appropriate conclusions will be drawn from an infringement of that provision, in accordance with their national law, as regards the validity of measures giving effect to the aid, the recovery of financial support granted in disregard of that provision and possible interim measures.

42. Or, as the Court expressed it more recently in Streekgewest Westelijk Noord-Brabant : (22)

‘It is for the national courts to uphold the rights of the persons concerned in the event of a possible breach by the national authorities of the prohibition on putting aid into effect. Where such a breach is invoked by individuals who may rely on it and is established by the national courts, the latter must take all the consequential measures under national law.’

43. Those statements are based on the very clear position that the final sentence of Article 88(3) EC is ‘the safeguard of the review machinery established by that article which, in turn, is essential for protecting the proper functioning of the common market.’ (23)

44. Thus in the period before the adoption of the 2002 decision it was incumbent on the Austrian courts to protect the rights of those concerned by drawing all appropriate conclusions from the fact that the original scheme was put into effect in breach of Article 88(3) EC, and by taking all consequential measures under national law.

45. But the question in the present case is how those courts should act now, and in that connection it must be considered what effects the Commission’s 2002 and 2004 decisions may have had.

Effect of the 2002 decision

46. The next question is thus whether, as the Austrian tax authorities apparently believe, the Commission’s 2002 decision finding the original scheme compatible with the common market, by virtue of Article 87(3)(c) EC, for the period from 1 June 1996 to 31 December 2001, affected the legal situation deriving from the fact that the scheme was put into effect in breach of Article 88(3) EC.

47. It follows from the Court’s consistent case-law that the answer must be no.

48. When the Commission is aware of State aid which has not been notified, it must examine the compatibility of that aid with the common market and is not entitled to find it incompatible solely on the ground that the obligation to notify was not complied with. (24)

49. However, the decision which the Commission takes in those circumstances ‘does not have the effect of regularising ex post facto implementing measures which were invalid because they had been taken in breach of the prohibition laid down by the last sentence of Article [88(3) EC], since otherwise the direct effect of that prohibition would be impaired and the interests of individuals, which are to be protected by national courts, would be disregarded. Any other interpretation would have the effect of according a favourable outcome to the non-observance of that provision by the Member State concerned and would deprive it of its effectiveness’. (25)

50. Indeed, if, for any particular aid plan, whether compatible with the common market or not, failure to comply with Article 88(3) EC carried no greater risk or penalty than compliance, the incentive for Member States to notify and await a decision on compatibility would be greatly diminished – as would, consequently, the scope of the Commission’s control.

51. That necessary conclusion from the system of the State aid rules in the Treaty is not in my view called into question by the statement of the Court of First Instance in RJB Mining (26) that the obligation on the Commission to make an ex post facto assessment necessarily means that it has the power to give ex post facto approval to aid paid prior to authorisation. That statement, although it referred to the situation under what is now Article 88(3) EC, did so by way of illustration only, since the issue which the Court of First Instance had to deal with concerned the different rules under the ECSC Treaty and the code of aid to the coal industry adopted thereunder. I do not think that it can prevail over the very clear statements of the law by the Court of Justice, which are a necessary corollary to the effectiveness of the prohibition contained in Article 88(3) EC.

52. It might none the less be wondered what purpose is served by the requirement on the Commission to reach a decision on the compatibility of unnotified aid, if that decision cannot cure the initial unlawfulness entailed by the failure to notify.

53. First, if the aid is of a continuing nature the decision, whatever its content, will produce full effects for the future. In the present case, if the Austrian authorities had not decided to amend the scheme as from 1 January 2002, the Commission’s findings with regard to the period up to 31 December 2001 could presumably have been valid for the following period also – a somewhat ironic hypothesis, in the light of the 2004 decision.

54. Second, an assessment by the Commission of a particular type of aid, even if that aid is no longer current, will assist Member States in determining whether future planned aid of the same type is permissible.

55. Third, the procedural consequences could still change as a result of the Commission’s decision, even with regard to the period before it was adopted. Where aid has been put into effect in breach of Article 88(3) EC, national courts must draw the appropriate conclusions from that illegality, as stated above. What those conclusions may be is a point which I shall address in greater detail below. (27) Any options available will however be limited to recovery of the aid if that is what the Commission requires in its final decision. (28)

56. There is therefore no reason to consider that, in the present case, the Commission’s 2002 decision, which found the disputed aid compatible with the common market and thus did not require its recovery, affected the powers or duties of the Austrian courts in drawing the appropriate conclusions from the fact that, prior to the decision, the original scheme was put into effect in breach of Article 88(3) EC.

The effect of the 2004 decision

57. A further question which has been mooted in the course of the proceedings is whether the Commission’s 2004 decision finding the amended scheme incompatible with the common market has any repercussions on the validity of its 2002 decision finding the original scheme compatible, given that the aspects on which the Commission based its second assessment do not appear to differ materially as between the two versions of the scheme.

58. I consider that there are no such repercussions.

59. The 2002 decision was adopted on the basis of the 1994 guidelines on State aid for environmental protection, while the 2004 decision was adopted on the basis of the 2001 guidelines. (29) The latter were adopted in particular to take account of increasingly frequent and increasingly varied grants of aid in the energy sector, especially in the form of tax reductions and exemptions. (30) The content of the two sets of guidelines differs considerably. In particular, the section on operating aid in the 1994 guidelines comprises three paragraphs occupying less than half a page of the Official Journal , whereas the equivalent section in the 2001 guidelines includes points 42 to 67, some three and a half pages of the Official Journal . The criteria on which the Commission based its finding of incompatibility in its 2004 decision are to a large extent absent from the 1994 guidelines. In those circumstances, it does not seem to me possible to consider that the assessment in the 2004 decision casts any doubt on that in the 2002 decision.

60. That does not however mean that the findings in the 2004 decision can be of no relevance to the assessment of the situation in the period 1996 to 2001 and must be disregarded even when they relate to aspects which did not change as between the original and amended schemes. In particular, I consider that the finding that the scheme was selective also by reason of the threshold of 0.35% of net production value may be of some importance. (31)

Appropriate consequences

61. The appropriate consequential measures to be taken by the national courts are not in principle dictated by Community law but depend on the kinds of remedy available in domestic law. (32)

62. The appropriate course of action may depend on the nature of the aid – whether it takes the form of, for example, a subsidy or an exemption from a levy. It may depend in part also on national procedural constraints, and on the type of remedy actually sought in a particular case. Furthermore, the granting of one type of remedy in one case is likely to preclude the subsequent granting of another type of remedy in other proceedings if a coherent result is to be achieved.

63. In so far as possible, however, whatever action is taken should be such as to achieve the aim of negating the unlawfully granted aid or at least its effects, of guaranteeing the effectiveness of Article 88(3) EC and protecting the rights of affected third parties.

64. Thus, in the case of a selective tax rebate such as the one in issue, an obvious option might be to set aside the whole measure or set of measures establishing the rebate, which would presumably entail repayment of such rebates as had already been granted, and thus recovery of the aid.

65. In that regard, I disagree with the Commission’s position that following the 2002 decision the aid was no longer to be recovered. That position is at odds with the case-law on the effectiveness of Article 88(3) EC, in particular Van Calster , as I have explained above. (33)

66. Another possibility could be an award of damages to those to whom the rebate was not available under the rules put into effect.

67. The type of remedy envisaged in the present case is that of setting aside the provisions which render the energy tax rebate selective, thus making it possible for other economic operators to claim a rebate.

68. The rationale for that course of action is clearly that, as confirmed in Adria-Wien , a rebate does not constitute State aid if it applies to all undertakings in national territory. By removing the selectivity condition and making rebates available to all undertakings, the Austrian courts aim to negate the aid.

69. However, that course of action is open to two types of objection.

70. First, it seems that the Austrian courts have only envisaged setting aside that part of the legislation which confines the right to claim a rebate to production undertakings, although another provision also renders the rebate selective on different grounds: the threshold of 0.35% of net production costs.

71. If the courts have not envisaged setting aside the latter provision also, that may be simply because no appropriate claims have been brought before them. It may also be relevant that the effect of the 0.35% threshold was not examined by the Court of Justice in Adria-Wien or by the Commission in its 2002 decision.

72. Yet it seems likely that the original scheme was selective in that regard too. The Commission’s reasoning in its 2004 decision is convincing as regards the selective nature of the 0.35% threshold in the amended scheme, and there is nothing in that decision or in the case-file to suggest that the differences between the original scheme and the amended scheme are such that only the latter was selective on that ground.

73. Thus, as the Commission points out, to grant rebates only to service undertakings (in addition to production undertakings) not excluded by the 0.35% threshold would be simply to enlarge the circle of beneficiaries of the aid. It would not however deprive the aid of its effects as such, since a criterion of selectivity would remain.

74. Care must therefore be taken by the national courts to ensure that whatever remedies they grant are such as in fact to negate the effects of the aid granted in breach of Article 88(3) EC (34) and not merely to extend it to a further, but still limited, class of beneficiaries.

75. Second, a more general objection can be made. The Commission refers to the Court’s statement in Banks (35) to the effect that the impossibility of recovering aid in the form of an exemption from a levy cannot lead to other operators being retrospectively exonerated from that levy: ‘Persons liable to pay an obligatory contribution cannot rely on the argument that the exemption enjoyed by other persons constitutes State aid in order to avoid payment of that contribution.’ It cites also the judgments in EKW , Idéal Tourisme , and Sea-Land Service (36) in support of that proposition, and concludes from it that allowing all undertakings to claim a rebate may not be an appropriate solution under Community law.

76. It does indeed seem to me open to doubt, on a number of grounds, whether the principle which requires national courts to ensure recovery of unnotified aid regardless of any subsequent authorisation can also justify allowing other undertakings to claim the benefit of the same aid.

77. First, the last sentence of Article 88(3) EC lays down what is essentially a negative, or standstill, obligation. The aim is to ensure that aid is not granted until the Commission has judged it compatible with the common market, not to require national authorities and courts to eliminate such features as in their judgment confer the character of aid on a measure.

78. Second, the powers conferred on the Commission itself in the case of unlawful (that is to say, unnotified) aid are limited, by Article 14 of Regulation No 659/1999, to requiring recovery. The possibility of requiring the Member State to alter the aid, pursuant to Article 88(2) EC, is thus explicitly excluded by the regulation in such cases, and may be thought to be already implicitly excluded by the scheme of Article 88 EC. It would seem strange if the powers of national courts in the essentially preventive context of Article 88(3) EC were to exceed those conferred on the Commission following a substantive assessment.

79. Third, the aim of Articles 87 and 88 EC is to prevent distortions of competition affecting trade between Member States. An extension of the circle of beneficiaries to all undertakings in a Member State does not remove such distortion but on the contrary widens its scope.

80. Fourth, even if such an extension were otherwise justifiable, a judicial route does not seem the most suitable for achieving it effectively. It may easily be the case that not all possible ‘extended beneficiaries’ will seek, or obtain, judicial or administrative redress, or be affected by whatever measures are taken in that context. Indeed, as will be seen from the subsequent discussion, (37) it may be difficult to establish who will have standing to make a claim. If any such extension were envisaged, then legislation, rather than judicial action, would seem a more appropriate option.

81. Fifth, a feature of the notification and standstill obligation in Article 88(3) EC, in conjunction with the obligation of recovery pursuant to Article 14 of Regulation No 659/1999, is that the threat of such recovery gives beneficiary undertakings an incentive to verify that the aid which they receive is notified to the Commission. If the most they could fear were that competitors in their own Member State might also benefit from the aid, that incentive, and with it the system of monitoring aid, would be weakened.

82. Sixth, whilst it may therefore appear sensible that recovery of unnotified aid be ordered even following a finding that the aid is compatible as it stands, it is difficult to see what purpose would be served by extending the aid, either in those circumstances or pending a decision as to compatibility.

83. Finally, although on a rather different level, a practical consideration in the present case may be that an extension of the rebate to all undertakings in Austria would be likely to have considerable consequences for the system of energy taxes and even perhaps for State finances, so that other remedies might be more appropriate on that ground.

84. Admittedly, other arguments can be marshalled against limiting the role of the national courts to ordering recovery of the aid granted in this case rather than allowing other undertakings also to claim a rebate.

85. First, it might be thought from the Court’s statements on the role of national courts in the event of a breach of Article 88(3) EC that the remedies to be granted are those determined by national law; by stating that those courts must take ‘all appropriate measures’, the Court might be taken to imply that such measures cannot be limited to one kind. However, the measure must be appropriate; and, for the reasons given above, extension of the rebate does not seem appropriate as a remedy under Article 88(3) EC.

86. Second, in some circumstances – if aid cannot in fact be recovered, for example – the most appropriate measure might be thought to be an award of damages in favour of a competitor adversely affected by the aid, and it might seem difficult to distinguish in economic terms between such an award and an extension of the right to receive the aid. Yet there is an economic difference, since the amount of compensation required to make good any damage incurred is unlikely to be equal to the amount of the rebate not received, and the two remedies are manifestly different in legal terms – an award of damages has no connection with the direct effect of Article 88(3) EC.

87. Third, in the present case, the judgment in Adria-Wien might be taken to approve – albeit tacitly – the course which the Verfassungsgerichtshof was envisaging and of which the Court of Justice was fully aware. That seems in any event to have been the conclusion drawn and acted upon not only by the appellants in the main proceedings (and no doubt by others in a similar situation), but also by both the Verfassungsgerichtshof and the Verwaltungsgerichtshof. None the less, it is difficult to draw any conclusion from that, since the issue was not even raised in Adria-Wien .

88. Accordingly, I find the reasons for ruling out an extension of the circle of beneficiaries of unnotified aid by judicial remedy considerably more compelling than those for allowing such extension. The latter course of action seems at odds with the scheme of the Community State aid rules, in particular with the fundamental aims of ensuring that aid is not granted until it has been declared compatible with the common market, and that it is not granted at all if it may lead to distortion of competition in trade between Member States.

89. At this stage I thus reach the view that, in respect of the period covered by the original scheme, the Austrian courts remain required to grant in appropriate cases such remedies as may achieve the aim of negating the aid put into effect in breach of Article 88(3) EC, or at least its effects; and that neither the extent of their duties in that regard nor the range of remedies which they may grant is affected by the Commission’s 2002 or 2004 decision. However, that range of remedies does not include allowing undertakings excluded from the original scheme to claim a rebate.

90. If on the other hand the Court should consider such a remedy permissible, it must be open to all economic operators concerned and not merely to those qualifying on the basis of the 0.35% threshold. Moreover, when reaching their decision the national courts should take account of the very considerable economic consequences likely to ensue from such a course of action.

Individual standing to claim a rebate

91. It remains in any event to be considered which parties might be entitled to bring proceedings in order to protect their rights.

92. The Austrian Government and the Commission submit that the appellants in the main proceedings and other comparable claimants are not concerned by the rebates granted to production undertakings, and that no rights under Community law have been infringed. As service undertakings, they were not in competition with production undertakings which received a rebate; they did not have to pay any charge or contribution levied specifically for the purpose of financing the rebates; (38) and the energy tax which they had to pay was not itself contrary to Community law.

93. In that regard, it is in principle for national law to determine an individual’s standing and legal interest in bringing proceedings; Community law merely requires that the national legislation does not undermine the right to effective judicial protection. (39)

94. The question of standing, in particular in so far as it is based on the existence of a competitive relationship, is thus a matter for the national court to determine, in principle on a case-by-case basis.

95. However, it does not seem to me at all obvious that, as Austria and the Commission argue, undertakings excluded from the benefit of the rebate cannot be in competition with those able to claim it.

96. In the original scheme the criterion distinguishing production from service undertakings is that of activity consisting primarily in the production of goods. Therefore, two undertakings which both produce the same goods and both provide the same services may be in direct competition over the whole range of their activities, yet receive a rebate or not depending on their primary activity. Other cases of partial competition will be considerably more frequent, and distortion will arise even if entitlement to a rebate is not determined by activity in the sector in which the undertakings are in competition. In any event, there may be areas in which certain services are a substitute for, and thus in competition with, certain goods. And clearly undertakings disqualified by the 0.35% threshold are likely to be in competition with others not so disqualified. Furthermore, to the extent that some beneficiaries are in (even partial) competition with some non-beneficiaries, the latter will be in (even partial) competition with other non-beneficiaries, generating a ‘ripple effect’ reaching all economic operators.

97. If it can be established that, as a result of aid put into effect in breach of Article 88(3) EC, an undertaking has suffered a disadvantage in comparison with another undertaking – and that will always be the case where one has benefited from a rebate and the other has not – and that the two are in competition – a situation which is likely to be general as a result of the ripple effect just mentioned – then it seems to me that the first undertaking must enjoy rights under Community law which national courts must protect.

98. If it follows from those considerations that all undertakings in national territory have standing to challenge refusals to grant them a rebate, that is consistent with the condition expressed above that the courts should not, by a limited extension of the right to claim a rebate, merely enlarge the circle of beneficiaries rather than negate the effects of the aid.

99. However, the significance of that conclusion depends on whether annulment of provisions limiting the circle of those entitled to a rebate is considered a permissible remedy, and I have expressed my view that it is not.

Time-limits

100. The Verwaltungsgerichtshof in its second question raises the issue of whether a claim for a rebate brought by an undertaking excluded from the original scheme should be treated differently depending on whether it was lodged before or after the 2002 decision.

101. That issue arises only if it follows from Article 88(3) EC that a rebate must be granted to those excluded from the original scheme.

102. I have in any event made it clear that the 2002 decision has in my view no effect on the powers and duties of the national courts, and thus on the situation of individual claimants before them, with regard to claims concerning the period during which the aid had not been notified or finally approved and the Austrian authorities were thus prohibited from putting it into effect.

103. However, the question of time-limits for bringing proceedings – whatever their nature – might none the less arise, particularly since nearly 10 years have now elapsed since the introduction of the energy taxes and the rebate scheme.

104. It may be noted that uncertainty as to the nature of the scheme and as to the rights that could be invoked in relation to it was broadly dispelled by the Court’s judgment in Adria-Wien and the Verfassungsgerichtshof’s subsequent judgments in December 2001, only to gather again as a result of the Commission’s 2002 decision and the Austrian tax authorities’ second round of refusals to grant rebates.

105. Moreover, the selective nature of the 0.35% threshold, which the Court might have been believed to have ruled out in the Adria-Wien judgment, (40) was not established by the Commission until its 2004 decision.

106. The rights of many claimants or potential claimants will thus not be certain until the Court of Justice has given its ruling in the present case and the Verwaltungsgerichtshof has delivered judgment in the main proceedings.

107. In those circumstances, it might be appropriate to consider that one or more of the events just listed should cause time to start running again for the purpose of bringing proceedings. Indeed, it appears from what was said at the hearing by counsel for TAL and Planai that, following the Verfassungsgerichtshof’s judgments in 2001, the Austrian authorities extended the deadline for applying for a rebate.

108. The decision on that point is a matter for the national courts in accordance with national law. However, they must bear in mind that national rules may not render the exercise of rights conferred by Community law in practice impossible or excessively difficult, nor may they be less favourable than those relating to comparable claims based on domestic law.

Conclusion

109. In view of all the foregoing considerations, I am of the view that the Court should answer the questions raised by the Verwaltungsgerichtshof as follows:

Where a national measure providing for a tax rebate is selective in that it benefits only certain undertakings and must therefore be classified as aid within the meaning of Article 87 EC, and where, in breach of Article 88(3) EC, that measure was not notified to the Commission prior to its entry into force, national courts are required to grant such remedies as will negate the unlawfully granted aid, or at least its effects, and protect the rights of affected third parties.

Neither the extent of their duties in that regard nor the range of remedies which they may grant is affected, in respect of the period during which the aid was unlawfully put into effect in breach of Article 88(3) EC, by a subsequent Commission decision finding the aid compatible with the common market.

However, that range of remedies does not include allowing undertakings excluded from the original scheme to claim a rebate.

(1) .

(2) – Case C-143/99 Adria-Wien Pipeline [2001] ECR I-8365.

(3) – Articles 87 and 88 EC were, prior to the entry into force of the Amsterdam Treaty on 1 May 1999 and thus during a large part of the material period in the present case, Articles 92 and 93 of the EC Treaty. I shall however use the new numbering throughout; although some changes were made when Article 92 became Article 87, there is no difference material to the present case between the two versions.

(4) – As Article 93(3) of the EC Treaty, it also covered other types of aid not relevant to the present case.

(5) – Of 22 March 1999 laying down detailed rules for the application of Article 93 of the EC Treaty (OJ 1999 L 83, p. 1).

(6) – For a slightly more detailed account, see Adria-Wien, cited in footnote 2, at paragraphs 3 to 8 of the judgment and points 2 to 7 of the Opinion of Advocate General Mischo.

(7) – Adria-Wien , cited in footnote 2.

(8) – C (2002) 1890 final; State aid NN 165/2001 – Austria.

(9) – The Commission’s assumption that it extended to producers in the primary sectors of agriculture, forestry and fisheries does not appear entirely consistent with the use in Adria-Wien of the term ‘manufacture of goods’ (‘fabrication de biens corporels’ in French; for ‘Herstellung von körperlichen Gütern’ in the Austrian legislation), but does not affect the fact that service businesses were excluded.

(10) – OJ 1994 C 72, p. 3.

(11) – Namely, the section entitled ‘Operating aid’.

(12) – Bundesgetsetz Nr 158/2002, BGBl. I 1643.

(13) – For an explanation of the national procedural situation, see Adria-Wien , cited in footnote 2, paragraph 15.

(14) – Commission Decision of 9 March 2004 on an aid scheme implemented by Austria for a refund from the energy taxes on natural gas and electricity in 2002 and 2003 (notified under document number C(2004) 325) (OJ 2005 L 190, p. 13).

(15) – Points 45 to 55 of the decision, in particular points 46 and 53.

(16) – OJ 2001 C 37, p. 3.

(17) – In the section on ‘all operating aid to promote … energy saving’.

(18) – In the section on ‘all operating aid in the form of tax reductions or exemptions’.

(19) – Points 56 to 59 of the decision, in particular points 57 and 58.

(20) – Point 66 of the decision.

(21) – At paragraphs 26 and 27, citing Case C-354/90 Fédération Nationale du Commerce Extérieur des Produits Alimentaires and Syndicat National des Négociants et Transformateurs de Saumon ( ‘FNCE’ ) [1991] ECR I-5505, paragraph 12.

(22) – Case C-174/02 [2005] ECR I-0000, paragraph 17.

(23) – Adria-Wien , paragraph 25.

(24) – See for example Case C-301/87 France v Commission ( ‘Boussac’ ) [1990] ECR I-307, paragraphs 21 to 23, and FNCE , cited in footnote 21, paragraphs 13 and 14.

(25) – FNCE , paragraph 16; Joined Cases C-261/01 and C-262/01 Van Calster and Others [2003] ECR I-12249, paragraph 63.

(26) – Case T-110/98 RJB Mining v Commission [1999] ECR II-2585, paragraph 78.

(27) – At point 61 et seq. below.

(28) – Without prejudice, of course, to possible interim measures preventing the granting of aid not yet put into effect, which is a different situation.

(29) – The 2001 guidelines were already in force at the time of the 2002 decision but, pursuant to point 82 thereof, were not to be applied to unnotified aid granted prior to their publication.

(30) – See point 2 of the 2001 guidelines, cited above in footnote 16.

(31) – See point 69 et seq. below.

(32) – See, for example, point 4 of the operative part in Case 120/73 Lorenz [1973] ECR 1471 (and in the three subsequent cases decided by the Court on the same day).

(33) – Point 46 et seq.

(34) – Bearing in mind that this case concerns only the aid granted up to the end of 2001, and not the notified aid covered by the 2004 decision.

(35) – Case C-390/98 [2001] ECR I-6117, paragraph 80.

(36) – Case C-437/97 EKW and Wein & Co. [2000] ECR I-1157, paragraphs 51 to 53, Case C-36/99 Idéal Tourisme [2000] ECR I-6049, paragraphs 26 to 29 (both cases cited also in Banks ) and Joined Cases C-430/99 and C-431/99 Sea-Land Service and Nedlloyd Lijnen [2002] ECR I-5235, paragraphs 45 to 48 (which itself cites Banks as authority).

(37) – See point 91 et seq.

(38) – See Van Calster , cited in footnote 25, paragraph 54.

(39) – Joined Cases C-87/90 to C-89/90 Verholen and Others [1991] ECR I-3757, paragraph 24; Case C-13/01 Safalero [2003] ECR I-8679, paragraph 50; Streekgewest , cited in footnote 22, paragraph 18.

(40) – See point 30 above.