2000/733/EC: Commission Decision of 12 July 2000 on the State aid 'Measures to improve the indoor environment' which Sweden is planning to implement (notified under document number C(2000) 2239) (Text with EEA relevance) (Only the Swedish text is authentic)
Date: 2000-07-12
Institutions: European Commission
Subjects: State aid, Sweden, application of EU law, control of State aid, housing, quality of the environment

L 295/30

EN

Official Journal of the European Communities

23.11.2000

COMMISSION DECISION

of 12 July 2000

on the State aid ‘Measures to improve the indoor environment’ which Sweden is planning to
implement

(notified under document number C(2000) 2239)

(Only the Swedish text is authentic)

(Text with EEA relevance)

(2000/733/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European
Community, and in particular the first subparagraph of Article
88(2) thereof,

Having regard to Council Regulation (EC) No 659/1999 of 22
March 1999 laying down detailed rules for the application of
Article 93 of the EC Treaty (1),

Having regard to the Agreement on the European Economic
Area, and in particular Article 62(1)(a) thereof,

Having regard to Commission decision of 18 January 2000 (2),
by which the Commission initiated proceedings in accordance
with Article 88(2) concerning aid C 2/2000,

Having called on interested parties to submit their comments
pursuant to those provisions (3) and having regard to their
comments,

Whereas:

(1)

(2)

(3)

(4)

(5)

(7)

(8)

1. PROCEDURE

By letter dated 19 November 1999, registered on 22
November 1999, Sweden notified the Commission of
the proposed aid in favour of private and municipal
housing companies and real estate owners.

By letter dated 29 February 2000,
the Commission
informed Sweden that it had decided to initiate the
procedure laid down in Article 88(2) of the EC Treaty in
respect of the aid.

The Commission decision to initiate the procedure was
published in the Official Journal of the European Communi-
ties (4). The Commission called on interested parties to
submit their comments.

The Commission received comments from the Swedish
authorities by letter dated 19 May 2000, registered on
25 May 2000. No other comments were received.

2. DETAILED DESCRIPTION OF THE AID

(9)

The notified measure is a modification of an environ-
mental investment aid scheme last approved on 20 July
1999 based on the Community guidelines on State aid

for environmental protection (5). The overall objective of
the scheme is to encourage municipalities and enter-
prises to carry out projects which improve the ecological
sustainability of Swedish society. The scheme lasts until
2001 and the number of beneficiaries is between 101
and 500.

(6)

The aid is given in the form of grants. Grants can be
given for:

— projects carried out by municipalities directly,

— proejcts that a municipality administers through a
in accordance with

public procurement procedure,
the applicable rules,

— projects that support economic activity in general,

and

— projects that are carried out by individual enterprises.

In the original scheme, six objectives were defined.
Eligible projects should aim at reducing impact on the
environment, increasing efficiency when using energy or
natural resources, supporting the use of renewable raw
materials, increasing recycling, supporting and strength-
ening biological diversity, encouraging education in
environmental matters or,
improving the
circulation of plant nutrients.

finally, at

Eligible projects have to lead to a significant improve-
ment on mandatory environmental standards, and the
eligible costs are costs for investments in land, buildings
and equipment, which can be expected to bring a signifi-
cant
the evironment.
They are strictly confined to the extra investment costs
necessary to meet environmental objectives. The aid
intensity is 30 % gross of the eligible costs. Projects also
have to have a likely, positive effect on employment.

in the quality of

improvement

for

The overall budget amounts to SEK 6,8 billion (about
EUR 791 million)
the period 1998 to 2001.
According to the Swedish authorities about SEK 1
billion remains. The budget will not be increased when
the new objective described below is introduced. The
grants for indoor environment are expected to amount
to about 5 % of
i.e. SEK 50
million (about EUR 6 million).

the remaining budget,

(1) OJ L 83, 27.3.1999, p. 1.
(2) Letter to Sweden dated 29 February 2000, published in OJ C 110,

15.4.2000, p. 9.

(3) OJ C 110, 15.4.2000, p. 9.
(4) See footnote 3.

(5) OJ C 72, 10.3.1994, p. 3.

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Official Journal of the European Communities

L 295/31

2.1. The modification subject
under Article 88(2)EC

to the procedure

(10)

The Swedish authorities propose to add a seventh objec-
tive to the scheme. It wants to give grants to individuals,
to municipalities directly and to municipal and private
housing companies and real estate owners, which under-
take renovation of buildings with a view to reducing the
presence of allergenic substances or other substances or
materials which constitute health hazards. The objective
is to prevent diseases caused by the poor quality of the
indoor environement. Buildings may be damaging to the
health of their occupiers if they for example contain
radon, have insufficient ventilation or are humid.

(11) A grant will only be given on condition that the renova-
tion project on its own, or in combination with other
measures, also contributes to achieving at least one of
the original six environmental objectives. The project
must also be likely to have a positive effect on employ-
ment. As for the rest of the scheme, the eligible costs are
strictly confined to the extra investment costs necessary
to meet the environmental objectives, and the aid inten-
sity is 30 % gross of the eligible cost.

(12)

Examples of measures for which grants may be given
under the new objective:

— conversion of insufficient ventilation systems, e.g. in

housing,

— elimination of humidity and mould in buildings,

(16)

— elimination of excessive radon in buildings (grants

already available for private housing).

(13)

Examples of how a measure carried out under the new
objective at the same time can fulfil one of the environ-
mental objectives already covered by the scheme:

— when converting a ventilation system the presence of
hazardous substances can be reduced at the same
time as the energy efficiency is increased,

— when eliminating damage caused by humidity and
mould, building materials and working methods can
be chosen in a way which fosters the use of renew-
able materials or increases recycling and reutilisation.

(14) Grants under this objective may not cover the following:

in

are

not

specifically mentioned

— investments improving the evironment within build-
ings
the
Community guidelines on State aid for environ-
mental protection. The guidelines are based on ‘the
polluter pays’ principle, and are aimed at the effects
of production processes on the external environ-
ment. This is demonstrated by the examples of
eligible kinds of
investments mentioned in point
1.5.1 of the guidelines, namely reduction of emis-
sions, waste disposal and recycling,

— grants to housing companies and real estate owners
with a view to financing renovation work may
constitue operating aid, rather than investment aid.
Operating aid is aid that relieves companies of
typical general operating costs that
they would
normally have to bear in order to carry out their
activity (6), In this case it may be considered part of
the activities of housing companies and other real
estate owners to keep their buildings in a condition
in which they do not constitute health hazards.

3. COMMENTS FROM SWEDEN

3.1. The environmental guidelines

The Swedish authorities agree that indoor environment
is not specifically mentioned in the environmental guide-
lines. They also admit the guidelines were introduced for
a transitonal period — until the polluter pays principle
has been fully implemented — in order to enable
Member States to give environmental
investment aid.
However, the fact that the guidelines do not explicitly
mention indoor environment must not be interpreted as
meaning that aid for that purpose is excluded. They
point out
the polluter pays principle does not
include personal injuries, which are covered by the prin-
ciples of compensation for damages. However, the envir-
onmental protection covered by the guidelines aims at
reducing the release of substances which are damaging
to human health. The notified measure has the same
objective, namely to protect human health by reducing
and other hazardous
the presence of
substances in indoor environments.

allergenic

that

— costs for construction of new buildings,

3.2. Operating aid or investment aid

— current operating expenses or routine maintenance

measures, such as cleaning of air ducts,

(17)

— conversions that do not have health or environ-
mental effects, such as changing the plan of the
building,

— measures carried out due to requirements in laws or

regulations.

For some hazardous substances, such as radon, there are
mandatory standards, which means that aid may only be
granted for investments leading to concentrations below
the mandatory standards. For other substances, such as
mould and other organic emissions, there are no clear
standards. Therefore,
in these cases the owner of the
building is not under an obligation to remedy the
problem. In spite of this, high concentrations of such
substances are a problem for people with asthma or
allergies.

(15)

The Commission had doubts as to the compatibility
with the EC Treaty of
the notified measure for the
following reasons:

(6) Case C-278/95 P Siemens SA v Commission of

the European

Communities [1997] ECR I-2507.

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Official Journal of the European Communities

23.11.2000

(18)

The grants would constitute operating aid if they were
granted for routine maintenance and for measures which
owners are under a legal obligation to carry out. No aid
may be granted for routine maintenance. As aid may
only be granted for measures for which there are no
mandatory standards, or which go beyond mandatory
standards,

it is not a question of operating aid.

3.3. Public health

(19) A good and sanitary indoor environment is important
for preventing disease and other illnesses related to the
environment. Allergies, asthma and other respiratory
problems are on the increase. It is clear that the indoor
environment affects people with asthma or allergies and
hypersensitive people, and there is an ongoing debate
about whether deficient indoor environments could be
one of the possible causes of the increase in allergies.
There are certain indications that it is particularly impor-
i. e.
tant
houses, schools and kindergartens, are of good quality.
Indoor pollution like radon and smoke also lead to
cancer. Good ventilation reduces the exposure to those
carcinogens. Against this background,
investments in
improved ventilation mainly in houses, schools and
kindergartens are important to public health.

the indoor environments for children,

that

protection of workers' health and safety and environ-
mental policy, which are Community objectives of
common interest (see Articles 137, 152 and 174 of the
EC Treaty).

4.2.1. Applicability of the environmental guidelines

(22)

(23)

The Commission had doubts as to whether the scope of
the Community guidelines on State aid for environ-
mental protection (7) was limited to the external environ-
ment, or whether they could form the basis of an
approval, under Article 87(3)(c) of the EC Treaty, of aid
to improve the indoor environment.

The Swedish authorities in their comments recognise
that the environmental guidelines were introduced in
order to allow Member States to give aid for environ-
mental protection during a transitional period until the
polluter pays principle has been fully implemented.
However, they argue that the ultimate objective of the
guidelines is the same as the objective of the aid in
question, namely to protect human health.

(24) After having examined the aid and having taken its
justification as presented by the Swedish authorities into
account, the Commission has come to the conclusion
that the main objective of the aid is to improve public
improving the external
first
health directly, without
environment. The Community guidelines on State aid
for
not
protection
applicable.

environmental

therefore

are

4. ASSESSMENT OF THE AID

4.2.2. Operating aid for investment aid

4.1. Applicability of Article 87(1) of the EC Treaty

(20)

In so far as grants under the new objective are granted
for projects carried out directly by municipalities, or
given directly by municipalties, or given directly to indi-
viduals, without any connection to any economic
activity, they are not covered by Article 87(1) of the EC
Treaty. Grants given to housing companies and real
estate owners in order to carry out renovation projects
fall within the scope of Article 87(1) of the EC Treaty, as
they constitute an economic advantage for recipients
which can affect trade between Member States.

4.2. Compatibility of the aid under Article 87(3)(c)

of the EC Treaty

(21)

The Commission maintains that the Community guide-
lines on State aid for environmental protection cannot
be applied to aid aimed at the indoor environment. It
nevertheless concludes that the notified investment aid
can be approved on the basis of Article 87(3)(c) of the
EC Treaty, given its contribution to public health, the

(25)

(26)

The Commission questioned whether grants to housing
companies and real estate owners with a view to
financing renovation work did not constitute operating
aid, rather than investment aid as claimed in the noti-
fication.

The Swedish authorities claim that the aid is to be seen
as investment aid, since the investments are carried out
in the absence of mandatory environmental standards or
in order to go beyond such standards. Aid for invest-
ments aimed at attaining mandatory standards would be
operating aid. This method for distinguishing between
the two forms of aid is not accepted by the Commission.
Under
is
possible to give investment aid to help firms adapt to
new mandatory standards under certain circumstances.

environmental guidelines,

current

the

it

(27) According to the definition established by the Court of
Justice (8), operating aid is aid that relieves companies of
typical general operating costs that they would normally
have to bear in order to carry out their activity, such as
salary and financial payments that are made on a contin-
uous basis. Although the owners of the buildings are
obliged to keep them in a safe state in order to be
allowed to continue their activity, the aid is granted for
investments. The Commission therefore con-
one-off
cludes that it does not constitute operating aid.

(7) See footnote 5.
(8) Case C-278/95 P Siemens SA v Commission of

Communities [1997] ECR I-2507.

the European

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4.2.3. Other relevant provisions of the EC Treaty

A r t i c l e 1 3 7

(28)

This Article provides that the Community shall support
and complement the activities of the Member States with
regard to improving the working environment to protect
workers' health and safety. It may be of relevance in this
case in so far as investment aid is granted for the build-
ings of
constitute work places.
According to the notification, aid may only be granted
for renovation works that have a health as well as an
environmental effect and companies are only eligible for
aid if their projects bring a significant improvement.

enterprises

that

A r t i c l e 1 5 2

(29) Article 152 states that Community action shall comple-
ment national policies and that it should be directed
towards improving human health, preventing human
illness and diseases and obviating sources of danger to
human health. In the Commission's 1993 Communi-
cation on the framework for action in the field of public
health (9), eight action programmes were adopted. Pollu-
tion-related diseases were identified as a priority area for
Community action. Diseases arising from environmental
changes and workplace environments were mentioned
among the challenges facing the Member States in the
field of public health. A number of health problems are
being produced by changes in the environment resulting
from economic and technological developments. The
increased levels of respiratory illnesses and certain forms
of cancer can for example be linked to such changes.

(30) On 8 June 1999 and 18 November 1999 the Council
adopted Resolutions in the field of public health (10), in
which environmental determinants of health were
mentioned as one of the key health challenges faced by
the Member States, and which urged Member States to
take the health impact into account in the coordination
of their own policies.

(31) On 29 April 1999 the European Parliament and the
Council aodpted Decision No 1296/1999/EC adopting a
programme for Community action on pollution-related
diseases in the context of the framework for action in
the field of public health (1999 to 2001) (11). The
general objective of the programme is to act against
diseases which are caused, triggered or aggravated by
environmental pollution. In the sixth recital it is stated
that the prevention of pollution-related diseases has to
include measures aimed at the sources and concentra-
tions of pollutants and at limiting exposure.

(9) COM(93) 559 final.
(10) Council Resolution of 8 June 1999 on the future Community
action in the field of public health, OJ C 200, 15.7.1999, p. 1.
Council Resolution of 18 November 1999 on ensuring health
protection in all Community policies and activities, OJ C 86,
24.3.2000, p. 3.

(11) OJ L 155, 22.6.1999, p. 7.

the European Parliament,

(32) On 16 May 2000 the Commission adopted a Communi-
cation to the Council,
the
Economic and Social Committee and the Committee of
the Regions on the health strategy of the European
Community, and a proposal for a Decision of the Euro-
adopting a
pean Parliament
programme Community action in the field of public
health (2001 to 2006) (12). The programme will help to
improve the health status of the population and reduce
premature deaths in the EU by tackling the underlying
causes of ill health, through effective health promotion
and disease prevention measures. The importance of the
link between public health and the environment was
underlined.

the Council

and of

(33)

The implementation of Article 152 shows that
the
prevention of disease, and in particular disease related to
pollution, whether external or internal, is a Community
priority. In this case it is national environmental policy
which is contributing to the protection of human health,
in line with the subsidiarity principle and with the
Council Resolution of 18 November 1999.

A r t i c l e 1 7 4

(34) Article 174 provides that Community policy on the
shall contribute to protecting human

environment
health.

5. CONCLUSIONS

(35)

The measure will promote the development of public
health in line with the Community policy in this field.
Given, in addition, the very low budget of the scheme,
and the eligible costs and the aid intensity of the grant
are the same as those of the already approved measures
of the scheme,
it can be concluded that the aid will
facilitate the development of certain economic activities
without adversely affecting trading conditions to an
extent contrary to the common interest. The Commis-
sion therefore closes the formal investigation procedure
with a positive decision based on Article 87(3)(c) EC,

HAS ADOPTED THIS DECISION:

Article 1

The State aid which Sweden is planning to implement for the
improvement of the indoor environment in buildings, based on
‘Förordning om ändring i förordningen (1998:23) om statliga
bidrag till lokala investeringsprogram som ökar den ekologiska
is compatible with the common
hållbarheten i samhållet’
market within the meaning of Article 87(3)(c) of the EC Treaty.

Implementation of the aid is accordingly authorised.

(12) COM(2000)285 final.

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Official Journal of the European Communities

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This Decision is addressed to the Kingdom of Sweden.

Article 2

Done at Brussels, 12 July 2000.

For the Commission

Mario MONTI

Member of the Commission