2002/285/ECSC: Commission Decision of 20 December 2001 on the State aid which Belgium is planning to implement for Sidmar NV (Text with EEA relevance) (notified under document number C(2001) 4471)
Date: 2001-12-20
Institutions: European Commission
Subjects: Belgium, State aid, aid to industry, application of EU law, control of State aid, environmental protection, iron and steel industry

20.4.2002

EN

Official Journal of the European Communities

L 105/29

COMMISSION DECISION

of 20 December 2001

on the State aid which Belgium is planning to implement for Sidmar NV

(notified under document number C(2001) 4471)

(Only the Dutch and French texts are authentic)

(Text with EEA relevance)

(2002/285/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,

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
to the abovementioned Decision (2) and having
pursuant
regard to those comments,

Whereas:

I. PROCEDURE

(1)

(2)

By letter dated 27 November 2000, Belgium, acting in
accordance with Article 6(1) of
the Commission
Decision No 2496/96/ECSC of 18 December 1996
establishing Community rules for State aid to the steel
industry (hereinafter the (cid:145)Steel Aid Code(cid:146)), notified the
Commission of a proposal to grant environmental aid to
Sidmar NV (hereinafter (cid:145)Sidmar(cid:146)). By letters dated 19
December 2000, 16 February 2001 and 29 March
2001, the Commission requested further information.
The Belgian authorities
replied by letters dated 26
January, 15 March and 3 May 2001 respectively.

By letter dated 21 June 2001, the Commission informed
Belgium that it had decided to initiate the procedure
laid down in Article 6(5) of
the Steel Aid Code in
respect of the aid for three of the projects and that it
had no objections to the aid for the other five projects.

(3)

(4)

(5)

(6)

(7)

The Commission decision to initiate the procedure was
published in the Official
the European
Communities (3). The Commission invited interested
parties to submit their comments.

Journal

of

Sidmar presented its comments by letter dated 14
September 2001. The Commission forwarded them to
Belgium, which was given the opportunity to react.
Belgium presented its own comments by letter dated 2
August 2001 and commented on Sidmar’s letter by
letter dated 31 October 2001.

II. DETAILED DESCRIPTION OF THE AID

The total cost of the three projects in respect of which
the Commission initiated the procedure
is EUR
5 140 419 and the Belgian authorities proposed to
grant aid corresponding to 12 % of the respective costs,
amounting in total to EUR 616 851.

In contrast

the three projects,

to the previous situation,

One of
(cid:145)centralised reduction of
scrap(cid:146), consisted in replacing the former system of
reducing scrap in the place where it is produced by a
centralised system in which scrap is reduced in a single
location.
this
central location is enclosed and the resulting waste gases
are then cleaned via a filter unit. The total cost of the
equipment
(EUR 2 478 935) was deemed eligible for
environmental aid by the Belgian authorities. This
includes not only the waste-gas cleaning equipment but
also the cutting machinery. The proposed aid for this
project amounts to EUR 297 472.

(cid:145)sludge

treatment

The other two projects, (cid:145)sludge treatment at steel plants(cid:146)
and
consisted of
at
investments in centrifuges to drain the sludge produced
at the steel plants and furnaces. Although the projects
allow the sludge to be re-used as a raw material, the
Belgian authorities did not deduct any savings from

furnaces(cid:146),

(1) OJ L 338, 28.12.1996, p. 42.
(2) OJ C 234, 18.8.2001, p. 2.

(3) See footnote 2.

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Official Journal of the European Communities

20.4.2002

investment costs when they calculated the costs eligible
for environmental aid. The investment costs amount to
EUR 1 545 963 and EUR 1 115 521 respectively and
the proposed aid to EUR 185 516 and EUR 133 863
respectively.

therefore helps to reduce dioxin emissions from the
sintering plant. Dioxin emissions have been reduced
from approximately 13 ng TEQ/Nm3 to approximately
2,5 ng TEQ/Nm3.

III. COMMENTS FROM INTERESTED PARTIES

IV. COMMENTS FROM BELGIUM

(11)

The Belgian authorities reiterated their position that the
investments were made solely for environmental reasons
and that all the costs should be considered eligible. They
fully endorsed Sidmar’s position.

Sidmar, the aid recipient, is the only interested party to
have submitted comments. For all
three projects it
the reason for the investment was to
declared that
increase environmental protection.
It insisted that the
(cid:145)centralised reduction of scrap(cid:146) project was not designed
to rationalise production activity.
the
investment had not conferred any financial advantage
because since its completion in June 2001 the cost per
tonne of scrap treated has increased by EUR 4,52,
which, Sidmar claims, corresponds to the cost of the
It concluded that all the equipment,
new equipment.
including the
cutting machinery (EUR 1 829 454),
should be eligible for environmental aid.

In its view,

(12)

(8)

(9)

in July 1999 to 648 mg/l

The company also stated that the sole purpose of the
(cid:145)sludge treatment at
furnaces(cid:146) project was to reduce
pollution. Chlorine levels in the water had been reduced
from 1 059 mg/l
in June
2001. According to Sidmar, this was because the sludge
was previously pumped from the settling tank to a
sludge basin with no provision for soil protection, with
the result that salinisation took place as the canal water
filtered through. Following the investment, the sludge
from the settling tank undergoes forced drainage in the
new centrifuges. The fact that canal water is no longer
pumped to the furnace sludge basins means that further
soil contamination is prevented. Sidmar also argued that
no additional savings had been made in raw materials
because the sludge could be used in both situations:
before the investment, after further (internal or external)
treatment to ensure that the sludge was totally dry, and
after
following
centrifugation.

immediately

investment,

the

In the past,

(10) With regard to the (cid:145)sludge treatment at steel plants(cid:146)
project too, Sidmar stated that the investment was made
solely to reduce pollution.
the canal
water-laden sludge was pumped to the ladles of the
sintering plants. This enabled the sintering charge to be
washed and the steel plant sludge to be recycled as a
the
useful
water-laden sludge undergoes
in
centrifuges and the dried sludge is subsequently brought
to pre-bedding, where the sintering charge is prepared.
In this way the thickened sludge is also recycled as a
useful raw material in the sintering plants. However, in
the sintering charge is moistened
the new situation,
low in chlorine, and
with groundwater, which is

raw material. After

investment,

drainage

forced

the

V. ASSESSMENT OF THE AID

Legal basis

the ECSC Treaty. Aid granted to it

Sidmar is a company within the meaning of Article 80
of
is therefore
governed by the Steel Aid Code. The measures notified
by Belgium qualify as aid within the meaning of Article
1 of the Steel Aid Code. Article 3 of the Code makes
provision for
aid for
companies
environmental investments. The conditions which such
aid must meet
to be deemed compatible with the
common market are set out in the Annex to the Steel
Aid Code and in the 1994 Community guidelines on
state aid for environmental protection (4)
(hereinafter
the (cid:145)guidelines(cid:146)).

to receive

steel

(13) According to point 3.2.1 of

for

intended

the guidelines,

aid
ostensibly
protection
measures but which is in fact for general investment is
not covered by the guidelines. The eligible costs must be
strictly confined to the extra investment costs necessary
to meet environmental objectives.

environmental

(14)

to

contribute

significantly

Sidmar already meets
the mandatory standards as
regards pollutants, which can be reduced further thanks
to the planned investments. The aid must therefore be
assessed in the light of the rules on (cid:145)aid to encourage
improved
firms
to
first
environmental protection(cid:146). According
the guidelines,
aid for
paragraph of point B of
investment
levels of
that allows significantly higher
environmental protection may be authorised up to a
maximum of 30 %. The level of aid must be in
proportion to the improvement of the environment that
investment necessary for
achieved and to the
is
achieving the improvement.

to the

(15) According to the Annex to the Steel Aid Code, in the
to contribute to
the

case of aid to encourage firms
significantly improved environmental protection,
following conditions apply:

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

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Official Journal of the European Communities

L 105/31

(a)

the Commission will analyse the economic and
environmental background of a decision to opt for
the replacing of existing plant or equipment.
In
principle, a decision to undertake new investment
which would have been necessary in any event on
economic grounds or due to the age of the existing
plant or equipment (useful life left equivalent to less
than 25 %) will not be eligible for aid;

(b) the investor will have to demonstrate that a clear
for higher standards

decision was taken to opt
which necessitated additional investment;

(c) any advantage in regard to lower production costs

will be deducted.

Project 1: Centralised reduction of ferrous scrap

to

contributes

this project

excluded. The

(16) As the Commission acknowledged when it initiated the
procedure,
important
improvements in the environment, with a reduction in
dioxin emissions from 50 mg/Nm3 to 10 mg/Nm3.
However, according to the rules, the eligible costs must
be strictly confined to the extra investment costs
necessary to meet environmental objectives, and general
investment costs not attributable to environmental
protection must be
scrap-reduction
operation has,
in any case, to be carried out by the
company for its production needs. Part of the purchased
feeder with
equipment (cutting torches, cutting table,
gas and electricity for the cutters, manual facility using
an oxy-fuel burner) does not in itself provide for any
further improvement in the environmental situation. On
the contrary, it is simply a new way for the company to
carry out production. Even if the company claims that
the cost of scrap reduction per tonne is higher at
present because of the cost of the new equipment, such
justify
higher costs
for
being
production equipment
environmental aid. The cost of the cutting equipment
(EUR 1 829 454) cannot therefore be considered eligible
for environmental aid.

in themselves do not as yet

deemed

eligible

(17) On the other hand, the cost of the filter unit and the
waste-gas collector (EUR 649 481) can be considered
eligible for aid. This equipment does not replace existing
equipment and is designed purely to reduce pollution.
The reduction achieved in dioxin emissions can be
regarded as significant, and so the cost is eligible under
the rules governing aid to help firms
significantly
improve environmental protection.

Project 2: Sludge treatment at furnaces

together with Sidmar,

sludge. Now, however,
they
maintain that the only reason for the investment was
increased environmental protection since, prior to the
investment, the sludge could have been re-used only
after appropriate treatment. Nevertheless, the fact is that
only after the investment did Sidmar start re-using the
sludge. Before, it was dumped and left in the furnace
sludge basins, from where it infiltrated and polluted the
soil. Ending the practice of dumping the sludge (cid:151)
and the resultant filtration of the chlorine-laden canal
water (cid:151) led to an important reduction in the chlorine
content of the water. This has certainly had a positive
effect on the environment. However,
to
calculate the expenditure eligible for environmental aid,
the cost of the investment must be reduced by the value
of the raw materials which the company has started
re-using as a result of
In spite of
repeated requests,
including in the decision to initiate
the procedure, to provide further information on the
savings made in raw materials and to deduct them from
the eligible costs, Belgium has failed to do so. Hence it
is not known which part of the investment expenditure
(if any) is eligible for aid. It must therefore be concluded
that
(EUR 1 115 521) were not
exclusively designed to secure additional environmental
protection
for
not
environmental aid.

the notified costs

the investment.

in order

therefore

eligible

and

are

Project 3: Sludge treatment at steel works

(19)

In the notification the Belgian authorities made the
same declaration as for the previous project, namely
that the reason for this investment was to re-use the
sludge as a raw material. However, in the course of the
together with Sidmar, clarified their
procedure they,
later position that no savings in raw materials were
made because use of the sludge did not increase after
the new investment. In contrast to the furnace sludge,
which was dumped, sludge from the steel works was
pumped, without having to be dried, to the ladles of the
sintering plants. That
sludge contained chlorine-rich
canal water, which contributed to a higher level of
dioxin emissions from the sintering plants. With the
new centrifuges, the sludge undergoes forced drainage
before being loaded and ground water is added instead
of canal water. As a result,
less chlorine enters the
sintering process and less dioxin is emitted. Dioxin
emissions have been reduced from 13 ng TEQ/Nm3 to
about 2,5 ng TEQ/Nm3.

(18)

The Belgian authorities declared initially that the aim of
the investments was to process furnace sludge for re-use
as a raw material in the production process and that the
centrifuges would enable most of
to be
removed and thus contribute directly to recycling the

the water

(20)

the steel plants do not affect

the
The centrifuges at
production process because after centrifugation the
same amount of sludge is pumped to the sintering plant
as when the sludge was rich in canal water. We can
therefore accept the position of the Belgian authorities
and Sidmar that the investment was made for purely

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20.4.2002

environmental reasons and has no effect on production
and that no savings are made on raw materials. The
investment does not replace any existing equipment and
the reduction in pollution can be considered significant
within the meaning of the rules governing aid to help
firms significantly improve on environmental standards.
The investment of EUR 1 545 963 can therefore be
considered eligible for environmental aid.

VI. CONCLUSION

(21)

set out

In the light of the above, it can be concluded that all
the conditions
in the Steel Aid Code for
environmental aid to be deemed compatible have been
met as regards part of the notified aid (EUR 263 454).
This concerns eligibility and aid intensity, which is
below the 30 % ceiling. The aid amount corresponds to
part of the notified aid for the (cid:145)centralised reduction of
scrap(cid:146) project (EUR 77 938) and to the notified aid for
(EUR
the (cid:145)sludge processing at steel plants(cid:146) project
185 516).

the

conditions

to be deemed eligible

(22) However, aid to the amount of EUR 353 397 does not
meet
and
compatible with the common market. It concerns the
notified aid for the other part of the aforementioned
(cid:145)centralised reduction of scrap(cid:146) investment project (EUR
219 534) and the notified aid for the (cid:145)sludge processing
at furnaces(cid:146) project (EUR 133 863),

HAS ADOPTED THIS DECISION:

Article 1

The aid which Belgium is planning to implement for the steel
is
company Sidmar,
amount
compatible with

amount of EUR 263 454,

common market.

to the
the

This

corresponds to the notified aid for part of
the (cid:145)centralised
investment project (EUR 77 938) and to
reduction of scrap(cid:146)
the notified aid for the (cid:145)sludge processing at steel plants(cid:146)
investment project (EUR 185 516).

Article 2

to the amount of EUR 353 397,
common market. This

to the steel
The aid which Belgium is planning to grant
is
company Sidmar,
amount
incompatible with the
corresponds to the notified aid for part of
the (cid:145)centralised
reduction of scrap(cid:146) investment project (EUR 219 534) and to
the notified aid for
furnaces(cid:146)
investment project (EUR 133 863).

the (cid:145)sludge processing at

Accordingly,
implemented.

that part of

the aid scheme may not be

Article 3

Belgium shall inform the Commission, within two months of
notification of this Decision, of the measures taken to comply
with it.

Article 4

This Decision is addressed to the Kingdom of Belgium.

Done at Brussels, 20 December 2001.

For the Commission

Mario MONTI

Member of the Commission