Commission Decision of 25 April 2001 on the State aid which Austria is planning to implement in favour of Voest Alpine Stahl Linz GmbH (Text with EEA relevance) (notified under document number C(2001) 1130)
Date: 2001-04-25
Institutions: European Commission
Subjects: Austria, State aid, aid to industry, application of EU law, control of State aid, water treatment

4.9.2001

EN

Official Journal of the European Communities

L 235/13

II

(Acts whose publication is not obligatory)

COMMISSION

COMMISSION DECISION

of 25 April 2001

on the State aid which Austria is planning to implement in favour of Voest Alpine Stahl Linz
GmbH

(notified under document number C(2001) 1130)

(Only the German text is authentic)

(Text with EEA relevance)

(2001/669/ECSC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Coal and
Steel Community, and in particular Article 4(c) thereof,

Having regard to the Agreement on the European Economic
Area, and in particular Article 62(1)(a) thereof read in conjunc-
tion with Protocol 14,

Having regard to Commission Decision No 2496/96/ECSC of
18 December 1996 establishing Community rules for State aid
to the steel

industry (1),

Having called on interested parties to submit their comments
pursuant to the provisions cited above (2),

Whereas:

I. PROCEDURE

(1)

(2)

By letter dated 15 April 1999 Austria notified the
Commission of aid for environmental protection to
Voest Alpine Stahl Linz GmbH concerning an extension
of its wastewater treatment installations.

By letter dated 17 May 2000 the Commission informed
Austria that it had decided to initiate the procedure laid
down in Article 6(5) of Decision No 2496/96/ECSC of
18 December 1996 establishing Community rules for
State aid to the steel industry (hereinafter referred to as
the ‘steel aid code’),

in respect of the aid.

(3)

The Commission decision to initiate the procedure was
published in the Official Journal of the European Communi-

(4)

(5)

(6)

ties (3).The Commission called on interested parties to
submit their comments.

The Commission has received no comments from inter-
ested parties. Austria presented its comments by letter
dated 20 June 2000 and a change to its initial noti-
fication, reducing the aid to 15 % of the eligible invest-
ment costs, by letter dated 28 February 2001.

II. DETAILED DESCRIPTION OF THE AID

Voest Alpine Stahl Linz GmbH is an integrated steel
company producing crude steel and hot- rolled sheets. It
operates a hot rolling mill with an annual production of
3 to 3,7 million tonnes. The rolling mill comprises a
reheating furnace and a strip-cooling installation. The
entire rolling process involves the use of water, which
the company gets from the Danube. This water is
contaminated with solids and machine oil before it is
discharged back into the river.

On 27 November 1998 new standards for pollution in
wastewater by steel companies entered into force in
Austria. Existing installations such as those of Voest
Alpine Stahl Linz GmbH qualified for a transition period
of seven years,
i.e. until 27 November 2005. The
company decided, however, to bring its installations into
line with the new standards before the deadline. In 1997
it applied to the Austrian authorities for aid with a view
to a significant extension of its water purification system
in 1997 and 1998.

(1) OJ L 338, 28.12.1996, p. 42.
(2) OJ C 190, 8.7.2000, p. 9.

(3) See footnote 2.

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Official Journal of the European Communities

4.9.2001

(7)

(8)

(9)

In its decision to open the procedure, the Commission
expressed doubts as to whether the project was eligible
for environmental aid in view of the age of the former
installations, which dated from 1958. It was not clear at
the time whether the investments had been carried out
purely in order to meet higher environmental standards
or whether they would have been necessary in any case
because the old equipment had become obsolete. This
situation was clarified in the context of the procedure.

The existing water treatment was rather rudimentary and
consisted mainly of three sedimentation basins, which
filtered the water before it was dumped into the Danube.
These installations remain in place but significant addi-
tions have been made to them. Five separators have been
installed which receive the water from the existing sedi-
mentation basins and in which water is separated from
then proceeds to newly
oil and solids. The water
installed filters,
is reused for
from where part of
cooling purposes in the rolling-mill process, and the
other part is discharged, undergoing further treatment
via a sand and gravel bed before reaching the Danube.
Solids and oil are disposed of by incineration in the
company's blast furnace.

it

The Austrian authorities propose to grant aid of
ATS 22,4 million (EUR 1,6 million), equivalent to 15 %
of
to
ATS 149,1 million (EUR 10,9 million) in total.

costs, which amount

the project's

eligible

III. COMMENTS FROM AUSTRIA

(10)

In its comments, Austria explained the nature of the
investments and what they represented in comparison
with the initial water treatment facilities. Those facilities
could have remained unchanged if
it had not been
deemed necessary to limit wastewater pollutants. Indeed,
the most important component of the original facilities,
namely the three sedimentation basins, remains in place
and has been integrated into the new water purification
installations. Austria has also amended its notification
concerning the level of aid and reduced it to 15 % of
investment costs as opposed to the 20 % originally indi-
cated.

IV. ASSESSMENT OF THE AID

(11)

Voest Alpine Stahl Linz GmbH is an undertaking within
the meaning of Article 80 of
the ECSC Treaty and
therefore it is subject to the rules of the steel aid code.
The measure notified by Austria constitutes aid within
the meaning of Article 1 thereof. Article 3 provides for

the possibility of environmental aid to be deemed
compatible with the common market in so far as it
complies with the Community guidelines on State aid
for environmental protection (4) (hereinafter referred to
as the ‘Guidelines’) and with the criteria for their applica-
tion to the ECSC steel industry outlined in the annex to
the steel aid code.

The guidelines provide as a general rule that the eligible
costs must be strictly confined to the additional invest-
ments necessary if environmental
targets are to be
met (5). Aid for investments to comply with new manda-
tory standards which involve adapting plant and equip-
to meet new environmental standards can be
ment
authorised up to the level of 15 % gross of the eligible
costs. Aid may be granted only in respect of installations
that have been in operation for at least two years when
the new standards enter into force (6).

The annex to the steel aid code, while reaffirming the
above rules, also requires the reason for the investments
to be assessed. Essentially, investments carried out on
economic grounds or as a result of
the
existing plant or equipment, are not eligible for aid. The
existing plant must have significant useful
life left (at
least 25 %) for the new investments to be eligible.

the age of

(12)

(13)

(14) New environmental standards for wastewater from steel
companies in Austria were published on 28 November
1997 and entered into force on 27 November 1998.
However, existing installations such as those of Voest
Alpine Stahl Linz GmbH qualified for a transition period
of seven years, ending on 27 November 2005.

(15)

In order to comply with the new standards, Voest
Alpine Stahl Linz GmbH carried out the notified invest-
ments, which entail important benefits for the environ-
ment: discharge of solids in open water have been
reduced by 80 % and discharge of oil by 44 %. In its
initial assessment, the Commission raised doubts about
the eligibility of the investments for environmental aid
under the steel aid code on the basis that the pre-
It questioned
existing installations dated from 1958.
whether the new investments would have been neces-
sary in any event and whether the remaining useful life
of the pre-existing installations amounted to more than
25 % at the time of the investments.

(16) On the basis of

the information provided by the
Austrian authorities in connection with the procedure,
the doubts raised by the Commission have been cleared
up. Although the former installations dated from 1958,
they would not have had to be replaced for production
or environmental reasons if the wastewater pollution
standards had not been changed. They could have
continued to operate without any time limit. The invest-
ments had to be carried out purely because the old

(4) OJ C 72, 10.3.1994, p. 3.
(5) See point 3.2.1 of the guidelines.
(6) See point 3.2.3.A of the guidelines.

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Official Journal of the European Communities

L 235/15

system was not able to meet the new environmental
protection standards on wastewater. The main elements
of the old system, the three basins, have been integrated
into the new system. The Commission therefore
concludes that the investments were carried out purely
for environmental reasons and with a view to meeting
the new standards.

HAS ADOPTED THIS DECISION:

Article 1

The aid which Austria is planning to implement in favour of
Voest Alpine Stahl Linz GmbH amounting to ATS 22,4
million (EUR 1,6 million), and representing 15 % of the total
eligible investment cost of ATS 149,1 million (EUR 10,9
is compatible with the common market.
million),

V. CONCLUSION

This Decision is addressed to the Republic of Austria.

Article 2

(17)

hi the light of the above considerations, the Commission
concludes that its initial doubts have been cleared up.
The subsidy of 15 % of the investment cost, as proposed
by the Austrian authorities, meets the criteria for envir-
onmental aid to help firms comply with new environ-
mental standards as laid down in the guidelines and in
the annex to the steel aid code,

Done at Brussels, 25 April 2001.

For the Commission

Mario MONTI

Member of the Commission