2006/63/EC: Commission Decision of  26 November 2003  on the aid scheme which Italy (Region of Piedmont) is planning to implement for the reduction of airborne pollution in its territory  (notified under document number C(2003) 3520)   (Text with EEA relevance)
Date: 2003-11-26
Institutions: European Commission
Subjects: Piedmont, State aid, air quality, control of State aid, distributive trades, natural gas, pollution control measures

L 32/82

EN

Official Journal of the European Union

4.2.2006

COMMISSION

COMMISSION DECISION

of 26 November 2003

on the aid scheme which Italy (Region of Piedmont) is planning to implement for the reduction of
airborne pollution in its territory

(notified under document number C(2003) 3520)

(Only the Italian version is authentic)

(Text with EEA relevance)

(2006/63/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

(2)

By letter D/50722 of 3 February 2003, the Commission
requested additional information on the notified scheme.

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

Having regard to the Agreement on the European Economic
Area, and in particular Article 62(1)(a) 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 called on interested parties to submit their comments
pursuant to the provisions cited above,

Whereas:

1. PROCEDURE

(1)

registered

By letters dated 16 December 2002, registered by the
(A/39321), and 20
Commission on 18 December
December
31 December
on
2002,
(A/39483), the Italian authorities notified, pursuant to
Article 88(3) of the EC Treaty, an aid scheme planned
by the Region of Piedmont
the
network of service stations for the sale of natural gas
used as motor fuel.

for the extension of

(3)

(4)

(5)

(6)

(7)

The Italian authorities submitted additional
information
by letter of 25 March 2003, registered on 28 March
(A/32278).

By letter SG(2003) D/229965 dated 28 May 2003, the
Commission informed Italy that it had decided to initiate
the procedure laid down in Article 88(2) of the EC Treaty
in respect of the proposed measure.

The Commission decision to initiate the procedure was
published in the Official Journal of the European Union (2).
The Commission called on interested parties to submit
comments within the prescribed period (one
their
month), pursuant
to Article 6(1) of Regulation (EC)
No 659/1999.

The Commission received comments from interested
parties on 29 August 2003 (Bundesverband der
deutschen Gas- und Wasserwirtschaft e. V.
(BGW),
Germany), 1 September 2003 (Federal Ministry of
Finance, Germany)
and 2 September 2003 (OMV
Erdgas, Austria).

Italy’s official response — after two extensions of the
deadline had been requested by the Italian authorities
on 10 July and 5 August 2003 and granted by the
Commission on 7 August 2003 — was submitted by
letter of 10 October 2003 (A/37006).

(1) OJ L 83, 27.3.1999, p. 1.

(2) OJ C 183, 2.8.2003, p. 5.

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2. DETAILED DESCRIPTION OF THE SCHEME

2.1. Legal basis and objective of the scheme

(8)

The notified aid is based on the
provisions:

following legal

A. Principal legislation

— Decision of

(DGR) No
the Regional Council
67-7675 of 11 November 2002 ‘Scheme for the
extension of the network for the sale of natural
gas used as motor fuel. Transfer to the municipa-
lities of
to be allocated to companies
intending to set up service stations for the sale
of natural gas used as motor fuel. Time limits for
the submission of applications and criteria for
assessing them’;

funds

B. Secondary legislation

— Law No 426 of 9 December 1998 ‘New measures

in the environmental field’;

— Ministerial Decree of 22 December 2000 ‘Identi-
fication of the national gas pipelines network for
the purposes of Article 9 of Legislative Decree No
164 of 23 May 2000’;

— Ministerial Decree No 256 of 17 July 1998 ‘Rules
on incentives for motor vehicles powered by
natural gas or liquefied petroleum gas (LPG)’;

— Ministerial Decree of 28 May 1999 ‘Grant of
loans to local authorities by Cassa Depositi e
Prestiti for financing the measures in the environ-
mental field provided for by Law No 426 of 9
December 1998’;

— Ministerial Decree of 5 April 2001 ‘Direct grants
to members of the public for the purchase of
electric vehicles and vehicles powered by natural
gas or LPG and for setting up service stations for
the sale of natural gas and LPG’;

vehicle fleet. Establishment of allocation criteria
and transfer of funds to the Provinces’;

— Decision of the Regional Council No 62-6806
‘General criteria and arrangements for funding
by the Plan for
in local public
investment
transport
in Piedmont under Law No 194/98.
Allocation to the Regional Transport Directorate
of
heading
EUR
25192/2002’.

9 009 895,07

under

(9)

for

is deemed insufficient

The scheme concerns the extension of the network of
service stations
the distribution of natural gas
(methane) used as motor fuel. There are currently only
12 such stations in the territory of Piedmont, compared
with 80 in Emilia-Romagna and 64 in Veneto. The
number
to attain the Kyoto
target of reducing CO2 emissions — as laid down in
legislation — and to lessen the
national and regional
environmental
airborne
the following
substances by reducing the level of
pollutants in the region:
(b) fine
particulates; (c) benzene. These pollutant emissions are
a consequence of traffic congestion and the excessive
use of a certain mix of traditional motor fuels. For this
reason, the Region of Piedmont has focused its action on
public and private transport,
in terms of both traffic/
the vehicle fleet and fuel distribution.
structure of

impact of other hazardous

(a) nitrogen dioxide;

2.2. Form of the measure

(10)

The proposed measure is provided in the form of a grant.

2.3. Intensity, recipients and eligible costs

(11)

The grant amounts to EUR 150 000 per service station.
No intensity is indicated. Both the eligible costs and the
recipients are described in Section 4 ‘Comments from
Italy’.

2.4. Budget and duration

(12)

The budget amounts to around EUR 5 million. The
duration of the scheme is conditional on the budget
allocation. The latter is scheduled for the years 2002,
2003 and 2004.

— Decision of the Regional Council No 13-7622
the use of natural gas, LPG and
innovative means of propulsion with a
impact in the public service

‘Extension of
other
low environmental

(13)

In its decision of 28 May 2003 (hereinafter the decision
initiating the procedure), the Commission set out the
doubts raised by the notified scheme with regard to a
number of issues.

3. GROUNDS FOR INITIATING THE PROCEDURE

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Official Journal of the European Union

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3.1. Aid amount

(19)

(14)

that

The Commission pointed out
the aid amount
exceeded the EUR 100 000 maximum that may be
granted over a period of three years to any one enterprise
under Commission Regulation (EC) No 69/2001 of 12
January 2001 on the application of Articles 87 and 88 of
the EC Treaty to de minimis aid (3) and noted that the
Italian authorities did not intend to reduce the planned
grants of EUR 150 000 per service station, on the
ground that
the minimum
incentive needed to spur investments in new service
stations in the region.

said amount was

the

identification of

In its decision initiating the procedure, the Commission
stressed the need for
the
correct
‘recipient’, which could be a person other than and not
coinciding with the ‘service station’. That would be the
if (a) the same owner possessed or
case, for example,
operated several service stations or (b) the same dealer
applied for aid more than once. It was quite possible for
a large oil company to have de facto control over service
station operators by virtue of an exclusive purchasing
agreement or any other agreement.

(20)

in order to verify that there was no incom-
Therefore,
patible cumulation of aid,
the Commission classified
service stations in six categories, of which the three
most relevant were:

3.2. Distance of the network from intra-Community
borders and possible impact of the measure on intra-
Community trade as the aid is not de minimis

(15)

In its decision initiating the procedure, the Commission
noted that, at first sight, trade was potentially affected as
natural gas is traded internationally and service stations
could be located close to the border.

3.3. Ownership of the natural gas service stations
and identity of the aid recipients

(16)

In its decision initiating the procedure, the Commission
referred to a previous decision it had taken in a similar
case: Decision 1999/705/EC of 20 July 1999 on the
State aid implemented by the Netherlands
for 633
Dutch service
the German
border (4). That Decision was subsequently upheld by
the Court of Justice in its judgment of 13 June 2002 (5).

located near

stations

3.4. Environmental impact of the measure

(17)

The Commission stated that in the notification the Italian
authorities had not clearly demonstrated that the envi-
ronmental benefits which the scheme was intended to
promote would materialise.

(21)

(18)

Two points raised by Decision 1999/705/EC and the
subsequent Court judgment in Case C-382/99 are espe-
cially relevant for the present case.

(3) OJ L 10, 13.1.2001, p. 30.
(4) OJ L 280, 30.10.1999, p. 87.
(5) Case C-382/99 Netherlands v Commission [2002] ECR I-5163.

(6) See footnote 3.

(a) dealer-owned/dealer-operated

service
stations, where the dealer owns the service station,
operates it at his own risk and is linked to the oil
company (the supplier) by an exclusive purchasing
agreement;

(Do/Do)

(b) company-owned/dealer-operated

service
stations, where the dealer rents the service station,
operates it at his own risk and is linked to the
supplier by an exclusive purchasing agreement;

(Co/Do)

(c) company-owned/company-operated (Co/Co)

service
stations, where the service station is operated by
employees or subsidiaries of the oil company. They
bear no risk and are not free to choose their supplier.

The burden of proving the real ownership of the service
stations — and the nature of the contractual agreement
linking the supplier to the dealer — lay with the Italian
authorities. To that end, the Commission submitted two
questions to the Italian authorities, with regard to (1) the
proposal to amend the scheme so as to bring it into line
with all the provisions of Regulation (EC) No 69/2001 (6)
and (2) the ownership structure of the service stations
and the size of the recipient enterprises. In particular, the
Commission wanted to know whether some or all of the
new stations would be part of any selling network
belonging to large
companies or multinational oil
groups.

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L 32/85

(22)

(23)

The Commission deemed the Italian authorities replies
insufficient as they did not rule out the possibility of
applications
for aid being repeatedly submitted by
different service stations belonging to the same large
enterprise(s), and they furthermore failed to provide
evidence that the contractual relationship (7) was such
as to bind the dealer (operating the service stations) to
the supplier without leaving him any leeway.

3.5. Eligible costs

The Commission noted that the investment aid was not
clearly linked to any eligible cost provided for by the
Community guidelines on State aid for environmental
protection (8),
and in particular point 37 thereof.
Neither did the investment aid notified under
the
the cases
scheme in question correspond to any of
covered by points 29 (aid to improve on Community
standards), 30 (energy saving), 31 (combined production
of electric power and heat) or 32 (aid to promote
renewable sources of energy) of the environmental aid
guidelines (9).

(27) Moreover,

in Piedmont, motor vehicle traffic in urban
centres with more than 10 000 inhabitants was subject
to limitations. In this respect, natural gas could play an
important role in attaining the objective of sustainable
mobility.

(28)

(29)

The claimed impact on pollutant emissions of replacing
vehicles (buses, trucks, vans, etc.) powered by traditional
fuels with natural gas-driven vehicles was supported by
statistical evidence provided by the Piedmont regional
authorities.

The Commission itself had proposed that 20 % of petrol
fuel used in the road transport sector be
and diesel
replaced by alternative fuels, and natural gas had been
identified as one of the fuels that could contribute signi-
ficantly to the attainment of that objective.

4.2. Aid amount

3.6. Final remarks

(30)

(24) Notwithstanding its doubts, the Commission recognised
there was an a priori presumption that any

that
distortions of competition would indeed be limited.

(25)

The Commission also noted that the scheme was not in
line with any other guidelines or frameworks.

(31)

4. COMMENTS FROM ITALY

4.1. Environmental impact of the measure

(26)

In their comments, the Italian authorities took the view
that — in order to attain the Kyoto targets, which had
been embodied in both Community and Italian legis-
lation — it was necessary to act on one of the most
polluting human activities, namely
road transport
(mobility). CO2, PM10, PM2.5 and NO2 were the main
pollutants produced by this activity and natural gas
was the best alternative to traditional
Its wider
use should have an impact on public transport, public
service vehicle fleets and road haulage (freight transport).

fuels.

(7) Such as an exclusive purchasing agreement or other binding
agreements — and possibly special exclusive clauses linking the
supplier and the service stations.

In their comments, the Italian authorities took the view
that EUR 150 000 per service station was the minimum
level of incentive needed to stimulate and promote such
investments — both when the infrastructure is built as
part of an entirely new station for the supply of natural
gas as motor fuel and when it is limited to a new outlet
(dispenser or pump, with the annexed infrastructure)
of
built
amount
EUR 150 000 was based on an estimate of
the
in a sector where profitability
minimum incentive
under normal market conditions was deemed to be still
low, due to long pay-back periods and very slim profit
margins. This was demonstrated by the fact that in the
past 25 years only six sales outlets had been built.

existing

station.

The

an

at

their arguments,

the Commission with estimates of

the Italian authorities
In support of
provided
the
operating margin of an average operator, based on the
costs calculated for a standard service station for the sale
of natural gas as motor fuel connected to a pipeline with
a normal pressure of between 5 and 12 bars. The
operating margin, gross of both variable and fixed
costs, amounted to EUR 0,069 per cubic metre of gas
sold. Net of
to
EUR 0,040 per cubic metre (standard margin applied
by the operator), which would be further reduced by
the annual overheads (staff, maintenance and adminis-
trative costs), estimated at EUR 10 000 per year.

the variable costs,

the margin fell

(8) OJ C 37, 3.2.2001, p. 3.
(9) Points 68 to 71 of the Community guidelines on State aid for
environmental protection refer to the commitment laid down in
the Kyoto Protocol, signed by the Member States and by the
Community, to limit or reduce greenhouse gas emissions but also
stress that
too early to lay down the conditions for
authorising any such aid [granted by Member States]’.

is still

‘it

(32)

In the example provided by the Italian authorities, natural
gas accounted for only 2,51 % of the annual turnover of
the service station.

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4.3. Investment costs of the service stations

(33)

In their reply, the Italian authorities provided a detailed
breakdown of the eligible investment costs. These were
limited to the machinery and equipment needed for the
supply of natural gas and the safety of the installation
and included:

— substations,

— compressors,

— damping cylinders,

— control panels,

— housings for compressors,

— refrigeration units,

— electrical substations,

— check weight twin dispensers (nozzles),

— canopies for the dispensers,

— other equipment needed for the supply of the gas and

the safety of the installation.

(34)

The total cost of the above machinery/equipment (the
only eligible costs) averaged around EUR 500 000, for
a compression system capable of handling gas delivery
pressures of between 5 and 12 bars.

(35) Other, non-eligible costs included: the connection to the
gas pipeline, the electricity grid and other public utilities
(around EUR 100 000 on average, but with possible
variations that greatly depended on distance and the lie
of the land); the purchase of land; construction works
(road links); ancillary costs
(planning, acquisition of
permits and licences). Such costs were entirely borne
by the investor.

(36) Although it is not necessary to analyse any further the
investment costs indicated by the Italian authorities for
installing an additional sales outlet for natural gas at an
existing service station, since the assessment concludes
that
the proposed measure does not constitute State
aid, the Commission considers that a maximum cost of
EUR 300 000 for installing a gas distribution outlet is
acceptable, on the basis of market conditions in other
Member States.

4.4. Distance of
Community borders and possible impact of

the network from the

intra-
the

measure on intra-Community trade

(37) Given the particular structure of Italy’s domestic supply
and the strategic choices made in the past in order to
diversify supplies and reduce its dependence on oil,
methane (natural gas) accounted for a very significant
share of the main motor fuels supplied in Italy.

(38)

The following table compares the situation in Italy with
that in other European countries (10).

Country

LPG outlets

Methane outlets

Austria

Belgium

Bulgaria

Croatia

Denmark

Finland

France

Germany

Greece

Ireland

Italy

Luxembourg

Norway

Netherlands

Poland

Portugal

United Kingdom

Czech Republic

Russia

Slovakia

Slovenia

Spain

Sweden

Switzerland

Turkey

Ukraine

Hungary

15

625

36

16

465

3

1 962

396

35

150

2 126

12

31

2 200

3 300

140

1 254

350

342

25

6

39

11

14

181

n/a

40

8

8

0

1

1

5

12

356 (51 under
construction)

n/a

2

402

5

4

9

8

5

13

12

208

4

n/a

10

23

27

3

87

3

(10) Assogasliquidi Consorzio ECOGAS.

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(39)

The following table compares the situation of different
Italian regions.

(0,16 % of the total). Nationwide, the figure is 330 000
vehicles (0,80 % of the total fleet).

Region

Methane outlets

Valle d’Aosta

Piedmont

Liguria

Lombardy

Veneto

Friuli-Venezia Giulia

Trentino-Alto Adige

Emilia-Romagna

Marche

Abruzzo

Molise

Tuscany

Umbria

Lazio

Apulia

Campania

Basilicata

Calabria

Sicily

Sardinia

0

12 (1)

7

29

68

4

3

81

44

12

3

51

16

13

20

19

3

1

6

0

‘White outlets’
broken down by region): all fuels

(independent outlets, not

[976]

Total for Italy

392

(1) The figure for Piedmont is 14 if two ‘white outlets’ are taken into

account.

(42) With regard to the proximity of the methane outlets to
the border with France and the possible impact on intra-
Community trade, the Italian authorities put forward the
following arguments:

— The range of a methane-fuelled motor vehicle was
around 300 km, meaning that refuelling was only
possible at a station that was within reach during
opening hours (no self-service was allowed by law
in Italy).

— The territorial distribution of

the pipelines heavily
influenced the location of the service stations since,
if an outlet was to be economically viable, it had to
be positioned at short distance from the closest
pipeline. A map provided by the regional authorities
showed the path of the two pipelines closest to the
border between Italy and France: (1) the ‘Val di Susa’
pipeline linked Salbertrand to Bardonecchia, via Oulx;
(2) the ‘Val Chisone’ pipeline followed the alignment
of the valley between Roure and Cesana Torinese,
mid-way between Sestrière and Clavière, on the
French border;
the two pipelines were connected
through Sauze d'Oulx.

— The regional authorities of Piedmont argued that
natural gas service stations in Italy were not in any
way in competition with existing or future French
service stations and did not distort or threaten to
distort competition such as to affect trade between
Member States within the meaning of Article 87(1) of
the EC Treaty. On the contrary,
the anticipated
growth in the number of natural gas-driven vehicles
in Piedmont could be expected — through cross-
border traffic flows — to result in increased sales
of natural gas also by non-Italian service stations,
located in France or other Member States.

(40) Out of 1 974 (11) outlets for the supply of motor fuels in
Piedmont (down from 3 753 in 1980), 14 are authorised
also for the supply of methane, of which only 12 are
operational and just six have been built in the past 25
years. The provinces of Turin and Alessandria have the
largest share (six outlets each), followed by Cuneo and
Novara, with just one outlet. Asti, Biella, Verbania and
Vercelli have none.

(41)

The planned budget for the scheme will allow only 33
new outlets to be built. On the demand side, Piedmont
fleet of 5 500 methane-fuelled vehicles
has a total

(43)

In conclusion, the situation described above ruled out
any negative cross-border impact of Piedmont’s natural
the
service stations and merely suggested that
gas
measure would have a localised — i.e.
regional —
effect at present and a potential positive impact in the
future.

4.5. Ownership of the natural gas service stations
and identity of the aid recipients (nature of the
agreement between the supplier and the dealer)

(44)

The fuel supply (distribution) sector was liberalised in
1998 (12).

(11) Situation updated to June 2003.

(12) Under Legislative Decree No 32/1998.

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(45) All operators meeting the subjective and objective —
such as minimum performance and safety standards,
environmental protection, etc. — requirements were
eligible for authorisation. The licence was issued by the
competent municipality. The measure did not make any
distinction based on the size or market power of the
investor and was addressed to both large oil companies
and independent dealers, either already operating on the
market or wishing to enter it for the first time. The
budget constraints made possible the construction of
just 33 new outlets and the recipients would be
selected by means of an open procedure (public tender).

(46)

The licensee could decide to operate the outlet itself or to
entrust it to a third-party operator by means of either a
than six years’ duration
loan for use of not
(renewable) or a fuel supply contract (13).

less

(47)

The licensees could be either oil companies which
operated under their own brand (ERG, Tamoil) or inde-
pendents (so-called retisti or network operators). Based on
evidence provided by the Italian authorities, 65 % of all
fuel distribution outlets in Piedmont belonged to oil
companies whereas 35 % belonged to independents.

(48) When the licensee was an oil company, the prevailing
pattern — both in Piedmont and nationwide — was the
company-owned/dealer-operated pattern (Co/Do), where
the dealer rents the service station, operates it at his
own risk and is linked to the supplier-licensee by either
an exclusive purchasing agreement (somministrazione) or a
loan for use (comodato petrolifero) (14).
In this case, the
outlet displays the brand of the oil company, the latter
being the owner of the installation. The company makes
all the necessary investments needed for the transfor-
mation and upgrading of the outlet. The operator buys
from the company and pays for it with a
the fuel
three to four days. The dealer, having
deferment of
become the sole owner of the fuel
(natural gas/LPG),
sells it at a price set freely by him but the company
has the right to suggest a selling price and/or indicate
a maximum sale price.

(49) Only in 10 instances had Piedmont seen the adoption of
the company-owned/company-operated (Co/Co) pattern,
where an oil company owns the service station and

(13) In Italian these are called contratto di comodato and contratto di

somministrazione respectively.

(14) In relation to the discussion of the Dutch precedent, see points 17

to 22 above.

operates it itself. In none of those cases did the service
station sell natural gas.

(50)

The contracts/agreements between the oil companies (the
owner-licensee) and the operators’ association had been
notified to and approved by the Italian competition
authority.

(51) With regard to the remaining 35 % of outlets — the
dealer-owned/dealer-operated (Do/Do) pattern — the
operator
concluded an exclusive purchasing
agreement (15) with an oil company and used the
company’s brand.

(retista)

5. COMMENTS FROM INTERESTED PARTIES

(52) All

that

the interested parties

submitted comments
to Article 6(1) of Regulation (EC) No
pursuant
659/1999 (16)
supported the position taken by the
Region of Piedmont with regard to the need to
promote the use of natural gas in the transport sector
to achieve environmental objectives.

too. Yet

(53) OMV Erdgas pointed to the favourable environmental
effects expected from the proposed initiative and the
importance of promoting the use of natural gas as an
objective of environmental policy. The use of natural gas
as motor fuel had triggered a major conversion effort by
the main car manufacturers in Europe (Fiat, Opel, Volvo,
Renault, VW, Ford and Mercedes) and was deeply
affecting the commercial vehicle sector
the
for natural gas was not mature and needed
market
further investments. The first step in that direction was
the development of an appropriate service station infra-
structure which, given the limited number of natural gas-
driven vehicles on the roads in Europe, was as yet not
profitable. The proposal for a Directive presented by the
Commission on 7 November 2001 set a target share of
the motor
for natural gas of 10 % by
2020 (17). Support for the establishment of the natural
gas infrastructure was therefore necessary and justified.
OMV Erdgas also pointed to the substantial difference
between the scheme proposed by Piedmont and the
Dutch scheme: in the latter case, Dutch service stations
located along the border with Germany were granted aid
in order to compensate for excise differentials in the
border region and allow Dutch outlets to compete on
an equal footing with German stations across the border.
This was not the case in Piedmont.

fuel market

(15) In Italian contratto di

convenzionamento;
these
contracts is variable, often one year, and at all events less than five.

the duration of

(16) See footnote 1.
(17) These observations, although not necessarily fully shared by the
Commission, are not examined in detail since the assessment
concludes that the proposed measure does not constitute State aid.

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(54)

(55)

In its observations, the Federal Government of Germany
also stressed the substantial difference between the Dutch
and Italian cases. First, the de minimis rule was clearly not
applicable to the measure adopted by the Region of
Piedmont and any discussion on that basis would be
pointless. Second,
took the
view that
to be assessed under the
Community guidelines on State aid for environmental
protection, because of
its stated objective (as distinct
from its effect). The other arguments put forward by
the German Government did not differ from those of
OMV Erdgas (18).

the German Government

the measure fell

BGW (Bundesverband der deutschen Gas- und Wasser-
wirtschaft e. V.), the Federal Association of the German
Gas and Water Industry, welcomed the initiative of the
Region of Piedmont and described similar developments
and actions pursued in Germany to develop the market
for natural gas in road transport. The central argument
was that natural gas service stations in Italy were not in
any way in competition with German stations, and there
was no distortion or threat of distortion of competition
affecting trade between Member States within the
meaning of Article 87(1) of
the EC Treaty. On the
the anticipated growth in the number of
contrary,
natural gas-driven vehicles
could be
expected — through cross-border traffic flows — to
result
in German
service stations too, a positive development in itself. It
should be observed that the same argument was used by
the regional authorities of Piedmont in relation to France.

in increased sales of natural gas

in Piedmont

(58)

(59)

6. ASSESSMENT

6.1. Legality of the aid

(56)

The Italian authorities have fulfilled their obligation
under Article 88(3) of
the Treaty by notifying the
scheme to the Commission before putting it into effect.

6.2. Presence of aid within the meaning of Article
87(1) of the EC Treaty

(57) Article 87(1) of the Treaty states that ‘any aid granted by
a Member State or through state resources in any form

(60)

(18) Other Commission documents or programmes cited by the German
Government in support of its position are: the Commission Green
Paper ‘Towards a European strategy for the security of energy
supply’; Directive 1999/30/EC (on limit values
for various
substances
Paper
‘European transport policy for 2010’; the Civitas I and Civitas II
(Clean urban transport) Community R & D programmes; and the
Commission communication on alternative fuels for road transpor-
tation and on a set of measures to promote the use of biofuels
(COM(2001) 547 final).

the Commission White

in ambient

air);

by

whatsoever which distorts or threatens to distort compe-
tition
the
certain
favouring
production of certain goods shall,
insofar as it affects
trade between Member States, be incompatible with the
common market’.

undertakings

or

an advantage

scheme provides

to certain undertakings

The
through state
resources (grants of EUR 150 000 from the budget of
the Piedmont Region)
(the
licensees, owners of the service stations). The measure
is therefore selective in scope. Nevertheless, based on
the evidence provided by the Italian authorities after
the Commission decided to initiate the formal
investi-
gation procedure, the effect on trade between Member
States within the meaning of Article 87(1) of the Treaty
has been demonstrated to be nil.

In this context,

Trade could, however, be affected by the measure if there
was competition between the Italian outlets receiving the
grant from the Piedmont Region and methane outlets in
another Member State.
it should be
stressed that
the only Member State with which
Piedmont has a common border is France. Most of this
border is mountainous and can therefore be crossed by
vehicle only through passes or toll tunnels. In addition,
the outlets have to be connected to the existing pipelines
within the regional borders: as mentioned above,
the
path of the two pipelines closest to the border between
Piedmont and France cross the Alps at Bardonecchia and
Cesana Torinese, which are accessible from France by the
Fréjus toll tunnel and the Montgenèvre pass respectively.
Contrary to the case covered by Decision 1999/705/EC,
it is therefore inconceivable that a driver would cross the
border in order to buy cheaper methane, especially since
the range of a methane-fuelled engine is smaller than a
petrol engine (300 km versus at
least 600 km) and
refuelling with methane is possible only during service
station opening hours.

Trade could also be affected by the measure if the same
undertaking could receive several grants through the
building of several methane distribution outlets. In this
connection,
it should be mentioned that only 33 new
outlets are expected to be built given the budget
constraints. The grants will be allocated following a
public tender. In practice, only existing service stations
will receive the grant as a service station will never be
viable if it sells only methane. Out of the 1 974 service
stations in the Piedmont Region, only 10 are company-
owned/company-operated (Co/Co)
therefore
owned by oil companies. The remaining 1 964 service

and are

L 32/90

EN

Official Journal of the European Union

4.2.2006

and

case

patterns

dealer-owned/dealer-operated

are
35 %)
(around 65 %). There is,

(Do/Do)
stations
company-owned/dealer-operated
(around
(Co/Do)
in the present case,
no similar mechanism to the PMS (price management
system) clause which would result in the grant being
passed through to the oil company in the Do/Do and
the
Co/Do
in Decision
as was
1999/705/EC (19). Therefore,
the same company can
receive several grants only in the Co/Co pattern. If it is
the 33 grants will be distributed in
assumed that
proportion to the share of existing Co/Cos, Do/Dos
it is not possible for an oil company to
and Co/Dos,
should also be
It
receive more
mentioned that
the 14 service
currently none of
stations which sell methane are Co/Cos. The Italian
authorities have furthermore undertaken not
to grant
any aid to service stations of
type. Given the
above, it is therefore inconceivable that an oil company
could receive several grants resulting in intra-Community
trade being affected within the meaning of Article 87(1)
of the EC Treaty.

than one grant.

that

the extension of the network of service stations for the
sale of natural gas used as motor fuel does not constitute
State aid within the meaning of Article 87(1) of the EC
Treaty,

HAS ADOPTED THIS DECISION:

Article 1

The measure which Italy (Region of Piedmont) is planning to
the reduction of greenhouse gas emissions,
implement
pursuant
(DGR) No
the Regional Council
67-7675 of 11 November 2002, does not constitute State aid.

to Decision of

for

Article 2

This Decision is addressed to the Republic of Italy.

Done at Brussels, 26 November 2003.

6.3. Conclusion

(61)

In the light of the foregoing, the Commission finds that
the aid scheme notified by the Region of Piedmont for

For the Commission

Mario MONTI
Member of the Commission

(19) See in particular point 85 of the Decision.