State aid (SAM 020.500.035 Norway) — EFTA Surveillance Authority notice pursuant to Article 1(2) of Protocol 3 of the Surveillance and Court Agreement, to other EFTA States, EU Member States and interested parties concerning State aid in the form of compensation payments for express bus operators (State aid SAM 020.500.035)
Date: 2000-12-18
Institutions: EFTA Surveillance Authority
Subjects: EFTA, Norway, State aid, bus, control of State aid, transport company

26.4.2001

EN

Official Journal of the European Communities

C 125/9

EUROPEAN ECONOMIC AREA

EFTA SURVEILLANCE AUTHORITY

STATE AID

(SAM 020.500.035 Norway)

EFTA Surveillance Authority notice pursuant to Article 1(2) of Protocol 3 of the Surveillance and
Court Agreement, to other EFTA States, EU Member States and interested parties concerning State
aid in the form of compensation payments for express bus operators (State aid SAM 020.500.035)

(2001/C 125/06)

By means of Decision No 381/00/COL of 18 December 2000, the gist of which is reproduced below, the
EFTA Surveillance Authority initiated proceedings pursuant to Article 1(2) of Protocol 3 of the Surveillance
and Court Agreement. The Norwegian Government has been informed by means of a copy of the decision.

I. FACTS

A. Procedure

By letter of 20 September 1999, registered by the Authority on
23 September 1999 (Doc. 99-7028-A), the Authority received
a complaint alleging that express bus operators in Norway had
received illegal aid under the so-called (cid:145)kompensasjonsordning for
(hereinafter referred to as the (cid:145)compensation
autodieselavgift(cid:146)
scheme(cid:146)). By letter dated 3 May 2000 (Doc. 00-3440-D), the
Authority informed the Norwegian Government of the receipt
the complaint and asked the Norwegian authorities to
of
provide all such information as may help to assess the compati-
bility of the compensation scheme with the State aid rules
under the EEA Agreement.

By letter of 2 June 2000, registered by the Authority on 30
June 2000 (Doc. 00-4750-A),
the Norwegian authorities
the requested information. At a package
provided part of
the
meeting, which took place on 9 June 2000 in Oslo,
Authority emphasised that the Norwegian authorities had to
provide the Authority with a justification for the aid. This
request was reiterated in the letter of 27 July 2000 (Doc.
00-5307-D), in which the Authority asked the Norwegian auth-
orities to explain on which legal basis they considered the
compensation scheme to be exempted from the general
prohibition of aid.
response dated 22
September 2000, registered by the Authority on 3 October
2000
authorities
contended that Article 61(1) of the EEA Agreement was not
applicable to the present case and that, in any case, the aid
measure would have to be considered as existing aid. Again, no
explanations as to the possible justification were provided.

the Norwegian

00-6944-A),

letter of

In their

(Doc.

Acknowledging receipt of that letter, the Authority stated in its
letter of 6 October 2000 (Doc. 00-7060-D) the reasons why it
considered the conditions of Article 61(1) of
the EEA
Agreement to be fulfilled and why it considered the measures

to point 6.2(2) of

to constitute (cid:145)new aid(cid:146) within the meaning of Article 1(3) of
Protocol 3 to the Surveillance and Court Agreement. At the
same time, the Authority drew the Norwegian Government’s
attention to the fact
the
that, pursuant
Authority’s State aid guidelines, the Authority is empowered
to proceed and take a decision on the basis of the information
available, even in the absence of any submission to it from the
EFTA State concerned. Finally, the Competition and State Aid
Directorate of the Authority warned the Norwegian authorities
that if no satisfactory answer was provided within 15 working
days from receipt of that letter, it would be forced to propose
to the Authority to open a formal investigation procedure in
accordance with point 5.2(1) of
the Authority’s State aid
guidelines.

The issues of concern were thoroughly discussed with the
Norwegian authorities on the occasion of a meeting on 19
October 2000 in Oslo. After an extension of the deadline,
the Norwegian authorities informed the Authority by letter
dated 24 November 2000, registered by the Authority on 27
November 2000 (Doc. 00-8611-A), that the political parties
representing a majority of seats in the National Assembly
had agreed that no funds would be granted for the compen-
sation scheme in connection with the State budget for 2001. By
letter dated 4 December 2000 (Doc. 00-8851-D), the Authority
acknowledged receipt of this letter. The Authority observed
that a possible abolition of the compensation scheme for the
future was not sufficient
to remove the doubts as to the
compatibility of the scheme in the past. The Authority also
to the
informed the Norwegian Government
persisting doubts regarding the compatibility of the compen-
sation scheme, it was obliged to open a formal investigation
procedure.

that, due

By fax dated 11 December 2000, sent by the Ministry of Trade
and Industry directly to the Authority,
registered by the
Authority on the same day (Doc. 00-9089-A), the Norwegian
authorities submitted their views on the justification of the
compensation scheme (enclosures, to which the letter makes

C 125/10

EN

Official Journal of the European Communities

26.4.2001

the Authority was

reference, did not reach the Authority within the prescribed
deadline). Furthermore,
informed that,
contrary to what had been said in the letter of 24 November
2000, the political parties representing the majority of the seats
in the National Assembly had agreed to grant NOK 50 million
under the compensation scheme in 2001. A final decision
would be adopted on 13 December 2000.

B. Description of aid measure

levy

((cid:145)autodieselavgift(cid:146)) which was

On the basis of the information presently available, it appears
that, until 1999, bus operators had been exempted from the
autodiesel
originally
introduced as of 1 October 1993. In the Parliamentary Bill
on green taxes (St. prp. nr. 54 (1997-1998) (cid:145)Grłnne Skatter(cid:146)),
the Norwegian Government
previous
exemption for buses not
to be justified on environmental
grounds since it relieved buses of external costs arising from
the use of roads, accidents and pollution and did not give these
operators an economic incentive to reduce these costs.
Consequently,
to
abolish the exemption from the autodiesel
levy for bus
operators in order to give these undertakings an incentive to
increase efficiency and to make environmentally oriented
investment decisions.

the Norwegian Government proposed

considered

the

However, in order to avoid a weakening of the competitiveness
of public transport, it was proposed to compensate so-called
(cid:145)subsidised(cid:146) bus operators for the costs resulting from the
to the so-called
abolition of
the exemption. With respect
(cid:145)non-subsidised(cid:146) bus operators, who are
to the
subject
impending investigation procedure, no such compensation
was considered appropriate. In this context, the Parliamentary
Bill on green taxes stated that no compensation would be
granted since
(cid:145)non-subsidised(cid:146) bus operators were
considered to be able to cover the increased costs either
through an increase in ticket prices or through a reduction
in profits. It was further maintained that the abolition of the
tax exemption would give the bus companies an incentive to
enhance efficiency and make their operations more environ-
mentally friendly. Therefore, it was argued that the actual rise
in costs would be less than the rise in the levy.

these

so-called

Following this proposal, all bus operators were, as of 1 January
1999, subject to the autodiesel levy. However, with respect to
((cid:145)tilskuddberettiget
(cid:145)subsidised(cid:146) bus operators
the
bussdrift(cid:146)) full compensation for the costs resulting from the
abolition of
levy was
provided according to the Norwegian Parliament’s Decision
on the State budget for 1999 in December 1998. This compen-
sation scheme, which is administered by the county munici-
palities ((cid:145)Fylkeskommunene(cid:146)),
to the impending
investigation procedure.

the exemption from the autodiesel

is not subject

initially foreseen under

the Government’s
Although not
proposal regarding the green tax reform, a second compen-
sation scheme for so-called (cid:145)non-subsidised(cid:146) bus operators ((cid:145)ikke-
tilskuddberettiget bussdrift(cid:146)) was adopted by the Norwegian
for
Parliament
1999 in spring 1999 (St. prp. nr. 67 (1998-1999)). The
this purpose was NOK 45 million.
amount allocated for
Apparently,
increased to NOK 71
million. However, it would appear that the actual payment of
(the State
compensation remained well below that amount

in its Decision on the revised State budget

this amount was

later

budget for 2001 refers to an amount of NOK 54,4 million for
the year 1999). In the State budget for 2000 the corresponding
budget line was further increased to NOK 75,4 million. The
budgetary proposal
an allocation of
for 2001 foresees
NOK 50 million for the compensation scheme. This scheme
is under the Ministry of Transport’s responsibility (see St. prp.
nr. 1 (1999-2000), chapter 1330, post 71 (cid:145)Tilskudd til ekspress-
busser(cid:146)).
for
compensation have to be submitted to the county munici-
them to the responsible
palities, which will
ministry.

It would, however, appear

that applications

then transmit

In two letters dated 21 February 2000,
(cid:145)non-subsidised(cid:146) bus
regarding
operators were
compensation payments for the years 1999 and 2000. Apart
from these letters, no further information was furnished by the
Norwegian Government to the Authority.

informed about

further details

According to these letters, compensation is paid in four
instalments during the year under a so-called (cid:145)on account
arrangement(cid:146).
In addition, a certain amount of money is
reserved for the final accounts ((cid:145)sluttavregning(cid:146)) which have to
be presented at the end of the respective year. The payments
made under the (cid:145)on account arrangement(cid:146) are based on historic
figures, whereas payments following the submission of the final
account are based on so-called (cid:145)actual production(cid:146) (the above-
the Authority
mentioned
understands
to mean distance-related services
operated by the bus operator under the licence according to
a (cid:145)route plan(cid:146)). These final accounts have to be complemented
by several forms containing the required detailed data on the
production actually carried out during the respective year.
in the respective year and
Route production carried out
which was not
(cid:145)on account
arrangement(cid:146), will be taken into consideration in the context
of the final accounts.

refer
letters
(cid:145)production(cid:146)

included in the

(cid:145)produksjon(cid:146);

already

to

The amount of compensation per company is calculated
according to the distances operated under the (cid:145)route plan(cid:146),
applying a certain rate per kilometre. This rate is not fixed
in advance but will be determined once the total distances of
all
licensees have been established (this rate is apparently
calculated by dividing the total amount earmarked for the
purpose by the total kilometres for which applications for
reimbursement have been submitted). The figures regarding
route production are revised by an auditor. Where a particular
route extends beyond the borders of one county municipality,
the county municipality in which the bus operator is registered
will have to coordinate claims regarding route production in
other municipalities. All relevant claims should then be sent to
the Ministry of Transport.

transport

Domestic transport services provided in the course of inter-
national
((cid:145)cabotage services(cid:146)) are also included in
the compensation scheme. In this respect, it is assumed that
foreign operators providing such cabotage services are doing so
in a pool with Norwegian operators. It is further assumed that
the Norwegian operators act on behalf of the foreign operators
when claiming compensation. When submitting claims the
Norwegian operators would have to declare the share of total
production carried out by the Norwegian and the foreign
the compensation payment
operators. The distribution of

26.4.2001

EN

Official Journal of the European Communities

C 125/11

between the Norwegian and the foreign operators is considered
to be a matter between them.

C. Beneficiaries

of

and

that

regular

purpose

transport

operating

(cid:145)subsidised(cid:146)

in contrast

both (cid:145)non-subsidised(cid:146)

(cid:145)non-subsidised(cid:146) bus operators,

the compensation scheme under scrutiny.

So-called (cid:145)non-subsidised(cid:146) bus operators are eligible for aid
It would
under
bus
appear
operators are providing regular passenger transport services.
However,
to
(cid:145)subsidised(cid:146) bus operators, do not receive State subsidy for
the
services.
(cid:145)non-subsidised(cid:146)
According to the Norwegian authorities,
regular bus operators may apply for a licence to run regular
services on specified routes, where
about
commercial transport possibilities are good. In addition, the
same bus operators may also offer (cid:145)subsidised(cid:146) regular as well
as occasional transport services. According to the complainant,
(cid:145)non-subsidised(cid:146) bus operators are in competition with tourist
coaches. This view is confirmed by the Norwegian authorities
which acknowledged that
(cid:145)both regular services and occasional
services . . . compete to some extent on the same market(cid:146). This
according to the
may be
complainant, express bus operators are allowed to reschedule
their destinations in the wintertime, and to provide transport
services to tourist sites. In addition, these express bus operators
may reschedule their transport routes if a group of people so
requires.

explained by the

expectations

that,

fact

II. APPRECIATION

A. Notification requirement and standstill obligation

Pursuant to Article 1(3) of Protocol 3 to the Surveillance and
(cid:145)[t]he EFTA Surveillance Authority shall be
Court Agreement,
informed, in sufficient time to enable it to submit its comments, of
any plans to grant or alter aid . . . The State concerned shall not put
its proposed measures into effect until the procedure has resulted in a
final decision(cid:146).

The notification obligations have been partly modified in the
transport sector. According to Article 17(2) of the legal act
referred to in point 4 of Annex XIII (1) to the EEA Agreement,
(cid:145)[c]ompensation paid pursuant to this Regulation shall be exempt
from the preliminary information procedure laid down in Article
1(3) of Protocol 3 of the Surveillance and Court Agreement . . .(cid:146).
In all other cases not covered by Regulation (EEC) 1191/69 of
the Council, the notification requirement under Article 1(3) of
Protocol 3 of the Surveillance and Court Agreement remains
unaffected.

On the basis of the information supplied by the Norwegian
compensation for
authorities,

it would appear

that

the

(cid:145)non-subsidised(cid:146) bus operators does not fall within the scope of
Regulation (EEC) No 1191/69, since the eligible operators do
not seem to be subject to public service obligations within the
meaning of Article 2 of that Regulation. The Norwegian auth-
orities have not contested the Authority’s conclusion in this
respect. Furthermore, on the basis of
the rules regarding
compensation payments, as laid down in the two letters of
21 February 2000,
the compensation
is apparent
awarded to the bus operators in question has not been
determined in accordance with the procedure laid down in
Regulation (EEC) No 1191/69 (in particular Article 9 et seq.).
Consequently, on the basis of the information available to it,
the Authority considers that Article 17(2) of the Regulation
(EEC) No 1191/69 is not applicable in the present case and
that the compensation scheme should have been notified as
new aid.

that

it

compensation scheme

the
their obligation to notify the aid pursuant

The Norwegian authorities have initially contested the qualifi-
as new aid and,
cation of
accordingly,
to
Article 1(3) of Protocol 3 of
the Surveillance and Court
Agreement. They have argued that the compensation scheme,
which was adopted in order to offset the costs resulting from
the abolition of the exemption from the autodiesel levy, repre-
sented a continuation of
the
original exemption from the autodiesel levy.

the existing tax system,

i.e.

the time of

the entry into force of

In the Authority’s view, the compensation scheme cannot be
regarded as (cid:145)existing aid(cid:146) within the meaning of point 7.2(1)
first bullet point, of the Authority’s State aid guidelines, since
the payment foreseen is not based on a legal act which was in
the EEA
operation at
Agreement. The exemption from the autodiesel
levy for bus
operators was abolished as of 1 January 1999. The existing
tax concession was terminated with effect from that date. A
compensation scheme for so-called (cid:145)subsidised(cid:146) bus operators
was established to offset the effects of the abolition. Later, in
the context of the revised budget, presented on 10 May 1999,
the Parliament decided to establish an additional compensation
scheme for
so-called (cid:145)non-subsidised(cid:146) bus operators. The
compensation is determined according to specific rules, part
of which were communicated to the bus operators concerned
in two letters dated 21 February 2000. These rules constitute a
new legal framework for the provision of aid to certain regular
bus operators. Therefore,
compensation cannot be
the
considered to be a continuation of a tax concession which
was laid down in a different
it
must also be observed that the compensation is different in
nature from the tax exemption under the previous act.
In
addition, it would appear that the bodies responsible for the
administration and implementation of
compensation
scheme are different from the authorities responsible for the
collection of the autodiesel levy.

In this context,

legal act.

the

(1) Regulation (EEC) No 1191/69 of the Council of 26 June 1969 on
action by Member States concerning the obligations inherent in the
concept of a public service in transport by rail, road and inland
waterway, as last amended by Council Regulation (EEC) No 1893/91
of 20 June 1991; hereinafter referred to as (cid:145)Regulation (EEC) No
1191/69(cid:146).

the

foregoing considerations,

the Authority
In light of
concludes that the compensation scheme constitutes new aid
the
within the meaning of Article 1(3) of Protocol 3 of
Surveillance
the
and Court Agreement. Consequently,
Norwegian authorities were under an obligation to notify the
compensation scheme in advance. Furthermore, the Norwegian

C 125/12

EN

Official Journal of the European Communities

26.4.2001

authorities have confirmed, in the course of the meeting on 19
October 2000, that payments have been made for the years
1999 and 2000. The Authority observes that these payments
are contrary to the standstill obligation laid down in Article
1(3) of Protocol 3 of the Surveillance and Court Agreement.
The compensation scheme is therefore unlawful on procedural
grounds, according to point 6.1 of the Authority’s State aid
guidelines. In this respect, the Authority draws the Norwegian
Government’s attention to the fact
to point
6.2.3. of Chapter 6 of the Authority’s State aid guidelines,
the aid may have to be recovered from the recipients, should
the Authority find the aid to be incompatible with the EEA
Agreement. In addition, and in relation to the continuation of
the compensation scheme in 2001, the Authority reminds the
Norwegian authorities of their obligation not to put the aid
into effect. This means that no payments shall be made under
the compensation scheme before the Authority has adopted a
final decision in this respect.

that, pursuant

B. State aid within the meaning of Article 61(1) of the

EEA Agreement

Article 61(1) of the EEA Agreement stipulates: (cid:145)Save as otherwise
provided in this Agreement, any aid granted by EC Member States,
EFTA States or through State resources in any form whatsoever which
distorts or threatens to distort competition by favouring certain under-
takings or the production of certain goods shall, in so far as it affects
trade between the contracting parties, be incompatible with the func-
tioning of the Agreement.(cid:146).

Support measures under
are
the
financed through the State budget. Bus operators eligible
under the compensation scheme receive a financial benefit
they would not have obtained in the normal course of
business.

compensation scheme

The Norwegian authorities have argued that the compensation
scheme did not distort
trade since regular
cabotage services provided by foreign operators were also
eligible for aid.

international

In general, measures of support will affect competition and
trade between the contracting parties, provided that
the
recipient firm carries on an activity involving trade between
the contracting parties and that the aid strengthens the firm’s
position compared with that of competing firms. Therefore, aid
favouring enterprises providing
in a
liberalised market is susceptible to affecting competition and
trade. The legal act referred to in point 33a of Annex XIII to
the EEA Agreement (2)) has fully liberalised special regular

transport

services

(2) Council Regulation (EEC) No 2454/92 of 23 July 1992 laying down
the conditions under which non-resident carriers may operate
national road passenger transport services within a Member State,
as amended by Regulation (EC) No 12/98 of 11 December 1997;
incorporated into Annex XIII to the EEA Agreement by Decision
No 121/98 (OJ L 297, 18.11.1999, p. 50, and EEA Supplement);
entry into force 1.8.1999; hereinafter referred to as (cid:145)Regulation (EC)
No 12/98(cid:146).

transport. Furthermore,

services, occasional services and regular transport services, to
the extent they are provided in the course of international
regular
should be added that
public procurement rules to a certain extent and, in particular
national legislation in several States within the EEA, enhance
EEA-wide market access. Foreign companies show increasing
interest in entering domestic markets and have, to a certain
extent, already acquired shares in national operators or operate
public service transport outside their home markets (3).

it

the

under

scheme

(domestic

Undertakings benefiting from the compensation scheme may,
according to the Norwegian authorities, provide both regular
and occasional services within the meaning of Council Regu-
lation (EC) No 12/98. It cannot, therefore, be excluded that
compensation
payments made
are
transport services. Even in
employed to provide occasional
cases where bus operators
regular
exclusively provide
effects on competition may not be
services, distortive
excluded since, according to both the complainant and the
Norwegian authorities,
(cid:145)non-subsidised(cid:146) bus operators are (cid:151)
if only to a certain extent (cid:151) in competition with occasional
bus services. With respect to international regular transport
the Norwegian authorities have maintained that
services,
carriers with permission to temporarily provide (cid:145)cabotage
services(cid:146)
services
regular passenger
provided in the course of regular international services) are
also entitled to receive compensation payments under the
is, however, doubtful
scheme.
whether
actually open to foreign
operators on a non-discriminatory and transparent basis.
Considering that the rules for compensation payments were
to the
apparently only distributed by way of a letter
(cid:145)non-subsidised(cid:146) bus operators, which appear to include only
Norwegian operators, there are doubts as to whether foreign
operators have been sufficiently informed about the possibility
to claim compensation. Furthermore, under the same rules, it is
not clear whether foreign operators not acting in a pool with
for
Norwegian operators are entitled to file applications
compensation on their own behalf. The wording of
the
provisions submitted to the Authority seems to indicate that
foreign operators would have to act
through Norwegian
the Authority is not convinced that
companies. Therefore,
foreign operators are treated in an equal manner.

In the Authority’s view it
compensation is
the

transport

In addition, it should be stressed that the mere fact that the aid
scheme is applied without discrimination on grounds of
from the
nationality or establishment does not exclude it
scope of Article 61(1) of
Such
non-discriminatory treatment of
foreign operators on the
Norwegian market would not exclude effects on trade since
Norwegian bus operators benefiting from the compensation
payments may compete outside Norway for both occasional
and regular transport services.

the EEA Agreement.

(3) See in this context the Commission decisions regarding State aid N
575/A/1999, Germany, and State aid N 694/99, Spain, regarding aid
for the modernisation of urban and regional transport:
http://europa.eu.int/comm/secretariat_general/sgb/state_aids/
transport/n694-99.pdf (in Spanish only); see also the explanatory
memorandum regarding the Commission’s Proposal
for a Regu-
lation on action by Member States concerning public service
requirements and the award of public
in
contracts
passenger
inland waterway,
road
COM(2000) 7 final, Brussels, 26.7.2000:
http://europa.eu.int/eur-lex/en/com/pdf/2000/en_500PC0007.pdf.

transport

service

rail,

and

by

26.4.2001

EN

Official Journal of the European Communities

C 125/13

Based on all the foregoing considerations, it cannot be excluded
that the compensation scheme has as its effects to reinforce the
competitive position of companies
that operate passenger
transport
services both inside and outside Norway and
therefore distorts competition and affects trade between the
contracting parties.

Therefore, the Authority regards the compensation scheme to
contain aid within the meaning of Article 61(1) of the EEA
Agreement.

C. Compatibility of aid measures

of the (cid:145)route plan(cid:146) (according to the distances they operate) and
who reduce their consumption of autodiesel on these routes
could benefit from compensation exceeding their actual costs
resulting from the autodiesel levy.

In light of the foregoing, the Authority is of the opinion that
the conditions for granting compensation, as contained in the
letters dated 21 February 2000, do not guarantee that bus
operators will not benefit from compensation exceeding their
actual costs resulting from the autodiesel levy. In the absence of
clear rules or guidelines laying down the maximum level of
compensation under the scheme,
it is doubtful whether the
compensation scheme is designed in such a way as to ensure
that compensation is limited to the extra production costs.

The Authority takes the view that the compensation scheme
relieves the eligible bus operators from costs related to their
day-to-day business. Therefore, aid granted under this scheme
constitutes operating aid (4) not normally allowed under the
EEA Agreement. Nevertheless,
the Authority has examined,
on the basis of
the information available, whether the aid
may benefit from an exemption under Article 61(3)(c) of the
EEA Agreement in connection with Chapter 15 of the Auth-
ority’s State aid guidelines regarding aid for environmental
protection. Pursuant to point 15.4.3 of the Authority’s State
aid guidelines, operating aid may be acceptable in the fields of
waste management and relief
taxes.
Application of the strict conditions laid down in the Auth-
ority’s State aid guidelines implies that, in principle, compen-
sation should be limited to extra production costs and the aid
should be temporary and in principle degressive, so as to
provide an incentive for reducing pollution or introducing
more
Such
temporary relief from new environmental taxes may be auth-
orised where it is necessary to offset losses in competitiveness,
particularly at international level. A further factor to be taken
into account is what the firms concerned have to do in return
to reduce their pollution.

from environmental

resources more

uses of

efficient

quickly.

Compensation limited to extra production costs

that

In this context, the Norwegian authorities have referred to the
fact
the (cid:145)compensation scheme is based on the company’s
scheduled traffic (cid:147)en route(cid:148) and that it therefore only compensates
for higher fuel costs linked to certain ordinary scheduled traffic(cid:146).
This implies, according to the Norwegian authorities, that (cid:145)the
new compensation system encourages the operators to economise on
their use of autodiesel, inter alia by shifting to less fuel-consuming
engines and buses, and consequently to reduce the global pollution at
implying
the
payments distributed according to inter alia fuel
consumption
would, on the other hand, award companies using more fuel per
kilometre than the average.(cid:146).

time. An alternative

compensation scheme

same

The Authority cannot see how this approach ensures that no
operator receives more in compensation payments than his
is not
costs resulting from the autodiesel
excluded that operators who receive payments on the basis

In fact,

levy.

it

The Norwegian authorities have further maintained that the
to limit compensation to the extra production
requirement
costs would be satisfied if the compensation scheme would
(cid:145)not exceed the higher amount of autodiesel
levies compared to the
previous tax scheme(cid:146). In this respect, the Norwegian Government
stated that
in
the magnitude of
less extensive than the increase of autodiesel
2000, was
revenues after 1 January 1999. As to the situation in 2001,
the Norwegian authorities referred to a reduction in the
amounts allocated for
the compensation
scheme of 33 % compared to the situation in 2000.

the compensation scheme,

the purpose of

levy might

levy. However,

The Authority acknowledges that a decrease in compensation
as compared to the relief previously granted under
the
indicate that
exemption from the autodiesel
compensation remains below costs resulting from the auto-
diesel
alone does not
provide the required proof that express bus operators are not
Norwegian
over-compensated.
Government’s
and
reduced amounts allocated for the purpose of the compen-
sation scheme, as compared to the situation in the past, does
not show that the above requirement is satisfied.

this
regarding a

For
statement

reduced scope

circumstance

reason,

this

the

As regards the situation in the years 1999 and 2000,
the
Authority observes that, despite its letter of 4 December
2000, in which it had expressed its doubts as to the compati-
bility of the compensation scheme in the past, no information
was submitted by the Norwegian authorities which would have
shown that express bus operators have not received more
compensation than required to cover costs resulting from the
to the
levy.
autodiesel
continuation of
the
Authority observes that
the compensation scheme has not
established a control mechanism which would allow the aid
awarding body to verify that the benefits stemming from the
compensation scheme do not exceed the additional costs
resulting from the autodiesel
levy in the respective year.
Without such control it cannot be excluded that express bus
operators might be over-compensated.

In addition, and in particular as
the compensation scheme in 2001,

(4) As defined in the judgment of the European Court of Justice of 8
June 1995, Case T-459/93, Siemens SA v Commission, ECR 1995,
II-1675, paragraph 48.

this background,

Against
the
Norwegian authorities have not demonstrated that payments
under
the compensation scheme are limited to the extra
production costs.

the Authority concludes that

C 125/14

EN

Official Journal of the European Communities

26.4.2001

Incentive effect for reducing fuel consumption

In this respect,

The Norwegian authorities have maintained that, since the
compensation scheme was less extensive than the previous
tax exemption, it would represent a more efficient system to
protect the environment and to promote the environmental
objectives.
the Norwegian authorities stated
that, when stipulating the compensation payments for inter
alia 2000, a 6 % deduction was made according to efficiency
potential regarding reduced fuel consumption. They further
claim that the exemption of occasional services from compen-
sation and this 6 % deduction made the magnitude of
the
compensation scheme less extensive than the increase of auto-
diesel revenues after 1 January 1999. As to the continuation of
the compensation scheme in 2001, the Norwegian authorities
have claimed that the amount of NOK 50 million allocated for
this purpose constituted a reduction of 33 % compared to
2000.

The Authority observes, however, that the Norwegian auth-
orities have not submitted the relevant
information, which
would have enabled the Authority to ascertain that compen-
sation awarded under the scheme decreased continuously since
its introduction and compared to the situation before the
abolition of the tax exemption in 1999.

levy prior

to the abolition of

to the situation in 2000,

in particular, not provided figures regarding tax
They have,
losses resulting from the exemption of express bus operators
from the autodiesel
the
exemption as
from 1 January 1999, which would have
enabled the Authority to verify the Norwegian authorities’
statements regarding the scope of the compensation scheme
in 1999, as compared to the previous tax regime. Furthermore,
and with respect
the Authority
observes that the amount of money allocated for the compen-
sation scheme was increased in the State budget for 2000 as
compared to 1999. This would seem to be in contradiction to
the statement from the Norwegian Government, referring to a
deduction of 6 % due to efficiency potential. The increased
amount allocated in the State budget for 2000 could be inter-
preted as indicating that the actual consumption of autodiesel
has increased rather than decreased after the abolition of the
levy. Without further expla-
exemption from the autodiesel
nations as to the reasons for this increase,
it is difficult to
establish possible effects on the incentive to express bus
operators to reduce their consumption of autodiesel.

In addition, even assuming that the amount of compensation
decreased since the introduction of the compensation scheme
in 1999, such a decrease is not inherent to the compensation
scheme. The amounts allocated for the purpose of the compen-
sation scheme depend entirely upon the discretion of
the
Norwegian Parliament when adopting the annual budget. The
scheme as such contains no guidelines as to the calculation of
the future compensation payments. Thus, there is no clear
signal as to the future reduction of State support which
would oblige bus operators to reduce their fuel consumption.

The Authority also lacks detailed information regarding the
calculation of the amounts allocated for the purpose of the
compensation scheme (in particular,
the
amounts were determined with the aim of
significantly
reducing consumption of autodiesel) and information about

to what extent

services eligible
regarding scheduled bus
possible changes
under the compensation scheme. Without such information,
it cannot be ascertained whether a possible overall decrease
of money allocated to the compensation scheme actually
results in reduced compensation per express bus operator
and thus gives these bus operators an incentive to reduce
their
the
reduction of 33 % for the compensation scheme in 2001,
referred to by the Norwegian authorities,
in itself
to verify whether and to what extent
sufficient
express bus operators received less compensation under the
scheme.

consumption. Against

background,

in order

is not

fuel

this

information on the level of compensation
Finally, without
granted under the scheme, it is difficult to ascertain whether
and to what extent the scheme has a sufficient incentive effect.
The Authority considers that,
in principle, only a level of
compensation which is lower than the costs (resulting from
the autodiesel levy), bus operators would incur without under-
to reduce fuel consumption, would give
taking any effort
express bus operators a sufficient
incentive to reduce fuel-
related costs. In this context, the Authority observes that no
information was submitted which would have enabled the
Authority to determine the level of compensation granted to
express buses in the respective years since the introduction of
the compensation scheme.

Due to the lack of information regarding a possible decrease of
the compensation payments since the introduction of
the
compensation scheme and regarding the level of compensation
for the eligible bus operators, the Authority has doubts as to
whether the compensation scheme gives the beneficiaries a
sufficient
in equipment and reorganise
business processes so as to keep the consumption of fuel as
low as possible.

incentive to invest

Temporary relief
losses in competitiveness

from new environmental taxes necessary to offset

to the environmental objectives of

the compensation
As
scheme,
the Norwegian authorities have referred to the
government’s proposal on green taxes ((cid:145)Grłnne Skatter(cid:146), St.
prp. nr. 54 (1997-98)). The Norwegian authorities have
further claimed that the compensation scheme was necessary
to maintain the
the bus operators
competitiveness of
concerned, without however elaborating further on this point.

However, the Authority observes that, according to the above-
mentioned proposal from the government, (cid:145)non-subsidised(cid:146) bus
operators were considered to be able to cover the additional
costs due to the abolition of the exemption from the autodiesel
levy with revenues from the operation of regular transport
services. Therefore, the Norwegian Government did apparently
not consider compensation for (cid:145)non-subsidised(cid:146) bus operators
to be necessary.
In their submissions, the Norwegian auth-
orities have not provided a satisfactory explanation why,
contrary to the conclusions in the government’s proposal to
parliament, compensation for (cid:145)non-subsidised(cid:146) bus operators
was necessary. Furthermore, the Authority observes that the
Norwegian authorities have not submitted any background
document which could have illustrated the reasons for intro-
ducing a compensation scheme also for these bus operators.

26.4.2001

EN

Official Journal of the European Communities

C 125/15

In addition, the Authority observes that express bus operators
were relieved from the autodiesel levy since its introduction in
October 1993. This means that, at the time the exemption was
abolished and the compensation scheme adopted, bus operators
had already had five years to adapt their businesses in order to
reduce tax-related costs. Without further explanations on the
part of the Norwegian authorities as to why this period of time
was not sufficient for bus operators to adapt themselves to the
new economic framework conditions, the Authority is not in a
the aid measure is necessary and
position to verify that
proportional. In this respect,
it would also be interesting to
receive information showing whether and to what extent
levy
express bus operators exempted from the autodiesel
during
fuel
their
consumption.

this period made

to reduce

efforts

As to the temporary nature of the scheme, the Norwegian
authorities have not submitted any comments or information.
The Authority observes in this respect, that the scheme as such
contains no limitation in time. Therefore, the Authority has
doubts whether such a scheme of unlimited duration may
give the eligible operators an incentive to adapt to the new
tax environment.

Therefore, the Norwegian authorities have not demonstrated, in
the Authority’s view, that the compensation scheme is only
temporary and degressive, pursues environmental objectives
and that compensation is necessary to offset losses in competi-
tiveness.

D. Conclusions

For the above reasons, the Authority has doubts as to the
compatibility of aid contained in the compensation scheme
information,
for express bus operators. Due to the lack of
these doubts could not be removed in the course of
the
preliminary investigation pursuant to point 6.2 of Chapter 6
of the Authority’s State aid guidelines. Consequently, and in
accordance with point 5.2 of Chapter 5 of the Authority’s
State aid guidelines,
the Authority is obliged to open the
procedure provided for in Article 1(2) of Protocol 3 of the

Surveillance and Court Agreement. The decision to open
proceedings is without prejudice to the final decision of the
Authority, which may conclude that the aid is compatible with
the functioning of the EEA Agreement.

In light of the foregoing considerations, the Authority requests
the Norwegian authorities to provide all necessary information
to assess the compatibility of the compensation scheme with
the State aid rules under the EEA Agreement. If the Norwegian
Government fails to provide the requested information within
the time limit specified below,
take a
decision under Article 1(2) of Protocol 3 of the Surveillance
and Court Agreement on the basis of the information available.

the Authority will

aid guidelines,

the Authority’s State

the Authority draws the Norwegian Government’s
Finally,
that, according to point 6.2.1. of
attention to the fact
Chapter 6 of
the
Authority (cid:145)may request by an interim decision the EFTA State to
suspend payment of the aid pending the outcome of the investigation(cid:146).
Since, the Authority has concluded in the present decision that
the aid was granted unlawfully, it may take a decision, pursuant
to point 6.2.1(2) of
the Authority’s State aid guidelines,
requiring the Norwegian Government to suspend immediately
the payment of the aid, should the Norwegian authorities not
provide a satisfactory guarantee that the compensation scheme
will not be applied until the Authority has reached a final
decision.

The EFTA Surveillance Authority hereby gives the EFTA States,
EU Member States and interested parties notice to submit their
comments on the measures in question within one month from
the publication of this notice to:

EFTA Surveillance Authority
Rue de TrŁves/Trierstraat 74
B-1040 Brussels.

The comments will be communicated to the Norwegian
Government.