2005/140/EC: Commission Decision of 30 March 2004 on the aid scheme for certain coalmining undertakings in the Autonomous Community of Castile-Leon implemented by Spain for 2001 and 2002 (notified under document number C(2004) 927) (Text with EEA relevance)
Date: 2004-03-30
Institutions: European Commission
Subjects: Castile-Leon, State aid, coal industry, control of State aid

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COMMISSION

COMMISSION DECISION

of 30 March 2004

on the aid scheme for certain coalmining undertakings in the Autonomous Community of
Castile-Leon implemented by Spain for 2001 and 2002

(notified under document number C(2004) 927)

(Only the Spanish text is authentic)

(Text with EEA relevance)

(2005/140/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

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

Having called on interested parties to submit their comments pursuant to the provision(s) cited above (1) and
having regard to their comments,

Whereas:

1. Procedure

(1)

(2)

(3)

(4)

By letter of 19 June 2000, registered by the Commission as notification No N/776/2000, Spain
notified the Commission of aid measures planned for mining in the Autonomous Community of
Castile-Leon. The measures planned in favour of the mining industry included certain aid schemes for
the coal industry provided for in Commission Decision No 3632/93/ECSC of 28 December 1993
establishing Community rules for State aid to the coal industry (2).

In its notification of 19 June 2000, Spain informed the Commission that the notified aid which the
Autonomous Community of Castile-Leon intended to grant would be coordinated with the aid
granted by the Spanish Government.

By letter of 25 September 2000, Spain notified the Commission that, since three months had elapsed
without the Commission making its position on these measures known, the competent authorities
intended to implement them if, within 15 working days of the letter, no decision was taken pursuant
to Article 9(4) of Decision No 3632/93/ECSC.

By letter of 17 July 2002, the Commission asked Spain for information about the aid granted to the
coal industry by the Government of Castile-Leon in 2000, 2001 and 2002, indicating the recipients,
amounts and purpose of the aid and its classification within the categories laid down in Decision
No 3632/93/ECSC. Spain was also asked to indicate how the aid fitted in with the general objectives
and criteria laid down in Article 2, and with the plans notified to the Commission by Spain in
accordance with Article 8, of Decision No 3632/93/ECSC.

(1) OJ C 105, 1.5.2003, p. 2.
(2) OJ L 329, 30.12.1993, p. 12.

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(5)

(6)

(7)

By letter of 5 September 2002, Spain notified the Commission of the aid granted to coal under-
takings in the Autonomous Community of Castile-Leon in 2000, 2001 and 2002. Spain submitted
its notification in accordance with the procedural
in 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). In its notification, Spain referred to Decision No 3632/93/ECSC, although both that
Decision and the ECSC Treaty had expired on 23 July 2002.

rules set out

By letter of 19 February 2003, the Commission informed Spain that it had decided to initiate the
procedure laid down in Article 88(2) of the EC Treaty in respect of the aid measures for research and
development, environmental protection,
It had also decided to initiate the
procedure in respect of aid measures to cover exceptional costs, but such measures are not
covered by this Decision.

training and safety.

The Commission decision to initiate the procedure was published in the Official Journal of the European
Communities (2). The Commission invited interested parties to submit
their comments on the
aid/measure in question.

(8)

The Commission received no comments from interested parties. Spain sent additional information on
21 March 2003, 9 April 2003 and 12 December 2003.

2. Detailed description of the aid

2.1. Types of aid

(9)

The types of aid are as follows:

(a) aid for

research and development

(R & D), as provided for by Article 6 of Decision

No 3632/93/ECSC;

(b) aid for environmental protection, as provided for by Article 7 of Decision No 3632/93/ECSC;

(c) aid for mining training;

(d) aid for mining safety.

2.2. Legal basis

(10)

The Orders of the Regional Ministry of Industry, Trade and Tourism governing the granting of aid for
mining of 20 October 2000 (aid for 2000), 19 December 2000 (aid for 2001) and 19 December
2001 (aid for 2002) constitute the legal basis for the aid.

2.3. Recipients

(11)

The recipients of the aid were all coalmining undertakings (large firms and small and medium-sized
enterprises) and associations of coalmining undertakings in the Autonomous Community of Castile-
Leon covered by Decision No 3632/93/ECSC with the objective of promoting and developing the use
of coal. The estimated number of recipient undertakings or entities is 50.

(12)

Castile-Leon is an autonomous community eligible for assistance under Article 87(3)(a) and has been
classified as one of the regions eligible for this aid in the period 2000 to 2006.

(1) OJ L 83, 27.3.1999, p. 1. Regulation as last amended by the 2003 Act of Accession. See,

in this regard, the
Communication from the Commission concerning certain aspects of the treatment of competition cases resulting
from the expiry of the ECSC Treaty (OJ C 152, 26.6.2002, p. 5).

(2) OJ C 105, 1.5.2003, p. 2.

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2.4. Budget

(13)

The following amounts were provided for in order to finance the notified aid:

— 2001:
— 2002:

9 015 181,56 EUR (1 500 000 000 ESP),

9 015 181,56 EUR (1 500 000 000 ESP),

Total:

18 030 363,12 EUR (3 000 000 000 ESP).

2.5. Duration of the scheme

(14)

The scheme expired on 23 July 2002.

2.6. Purpose of the aid

(15)

The aid was intended to cover the measures specified in recitals 15 to 18 and, with regard to aid for
research and development (R & D), covered measures designed to:

— encourage undertakings which had never carried out research and technological development
projects to do so, or encourage those which regularly carried out such projects to engage in
more of them,

— improve health and safety conditions in mines,

— make optimum use of mining reserves and resources by improving the methods for producing

and using coal,

— promote technological innovation directed towards improving the environmental impact of the

mines,

— promote the introduction of technological improvements directed towards adding value to the

product, allowing easier access to new markets or increasing productivity,

— upgrade the technology of equipment and projects intended for the exploitation, processing and

use of minerals.

This aid scheme accorded priority to projects geared towards one of the following priorities:

— reduction of the risk of catastrophic accidents, explosions, fires, etc. and removal of the causes of

serious or frequent accidents,

— technical feasibility studies ahead of industrial mining research activities.

(16)

The following measures in the field of environmental protection:

— reduction of the damage which mining and metallurgy activities cause to the environment,

— restoration of the environment in areas affected by former mining activity,

— recovery of minerals or metals from mine-waste tips.

This aid scheme accorded priority to projects geared towards any of the following priorities:

— bringing the quality of mining undertakings’ emissions into the atmosphere and into public
into line with current mandatory standards on environmental protection,
installations were in operation for at least two years prior to the

watercourses
provided the undertakings’
entry into force of the aforementioned mandatory standards,

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— improvement of the level of environmental protection so as to raise it substantially above the

level laid down in the mandatory standards for mining undertakings,

— remedial measures for already damaged environments,

— technology studies and projects to help reduce the damage which mining and metallurgy activities

cause to the environment.

(17)

The aid for mining training was intended to cover training activity projects with the basic objective of
providing workers in the industry with good technical qualifications so as to minimise the number of
pit accidents.

(18)

The aid for mining safety was intended to cover investment projects geared towards raising safety
standards in mining installations above the minimum required by the legislation applicable.

2.7. Form of aid

(19)

The aid took the form of a non-repayable grant.

2.8. Eligible costs

(20)

Eligible costs were those specified in recitals 20 to 23 and, with regard to aid for research and
development (R & D), comprised the following costs:

(a) expenditure on staff (research staff, technicians and other auxiliary staff involved exclusively in
research activity). The proportion of such costs actually attributable to eligible research and
development activity were eligible;

(b) cost of equipment, materials,

land and premises permanently used exclusively for research
activities (save in the case of commercial transfer). The costs of acquiring unused fixed assets
located in the region of Castile-Leon were eligible. Such assets and equipment, and the auxiliary
installations and equipment necessary to keep it in proper working order, had to be permanently
used exclusively for research and development activities (save in the case of a transfer for a
consideration);

(c) cost of outsourced consultancy and similar services used exclusively for

research activity
(including research, technical know-how, patents, etc.). All such costs were eligible, provided
they were directly related to and necessary for research and development activity;

(d) additional general expenditure arising directly from research activity. All such costs were eligible,
provided they were directly related to and necessary for research and development activity;

(e) other operating expenditure (for example, cost of equipment, supplies and similar products)
arising directly from research activity. All such costs were eligible, provided they were directly
related to and necessary for research and development activity.

(21)

(22)

In the case of aid for environmental protection, the eligible costs were the additional costs of
investment in land, buildings, installations and capital goods needed in order to meet environmental
objectives.

In the case of aid for mining training, the eligible costs were: trainer costs; trainees’ travel expenses;
expenditure on consumables and depreciation of
in proportion to their
exclusive use for the training project concerned; other staff costs up to the total amount of the
eligible costs mentioned above.

tools and equipment,

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(23)

In the case of aid for mining safety, the eligible costs were those related to:

(a) acquisition of equipment to improve safety at mining installations;

(b) expenditure geared towards improving safety at mining installations and for mineworkers;

(c) studies to improve safety at mining installations.

2.9. Aid intensities

(24)

The intensity of the aid is specified in recitals 24 to 27 and, with regard to aid for research and
development (R & D), the gross amount was as follows:

— for industrial research, up to 60 % of investment and expenditure approved as eligible. If the
applicant was a small or medium-sized enterprise (SME), the aid could total up to 70 % of the
eligible project costs,

— for technical feasibility studies ahead of industrial mining research, the maximum permissible

limit would be 75 % of the eligible project costs.

(25)

in terms of
In the case of aid for environmental protection, the maximum aid intensity could,
equivalent net subsidy, be up to the maximum percentages of
investment made which are
specified in the regional aid map authorised by the European Commission for the period 2000-
2006, as set out in Annex II to the Order. In the case of SMEs, these rates could be increased by the
following percentages:

— investment aid to help undertakings adapt to the new mandatory environmental standards: 15 %

gross of eligible costs,

— investment aid to obtain a higher level of environmental protection than required by the

mandatory standards: 20 % gross of eligible costs,

— investment aid to improve the level of environmental protection for undertakings in sectors with

no mandatory standards: 20 % gross of eligible costs.

(26)

In the case of aid for mining training, the maximum gross aid intensity was 80 % of eligible costs.

(27)

In the case of aid for mining safety, the maximum gross aid intensity could be up to 100 % of eligible
costs.

2.10. Cumulation of aid

(28) All the aid provided for in this scheme could be combined with any other public aid for different
purposes, provided the maximum limits set in the proposed aid scheme were observed. Under no
circumstances could the amount of aid granted under the scheme exceed, on its own or combined
with incentives, grants or aid from other public administrations or other national or international
public or private bodies, the cost of the investment, expenditure or activity carried out by the
recipient.

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(29)

in the case of aid for research and
The cumulation of aid is detailed in recitals 29 to 32 and,
development (R & D), the aid could be combined with any other public aid for the same purpose.
Where aid schemes were combined, the total public funding could not exceed 75 % of eligible costs.

(30)

In the case of aid for environmental protection, the aid could be combined with any other public aid
for the same purpose, provided the combined total did not exceed the limits laid down in paragraph
6.1(b) of the regulatory bases in the Order.

The maximum aid intensity could,
in terms of equivalent net subsidy, be up to the maximum
percentages of investment made which are specified in the regional aid map authorised by the
European Commission for the period 2000-2006, i.e.:

— 35 % for Burgos and Valladolid,

— 37 % for Palencia and Segovia,

— 40 % for the other provinces,

— in the case of SMEs, these rates could be increased by up to 15 % gross.

In the case of SMEs, the rates indicated above could be increased by the following percentages:

— investment aid to help undertakings adapt to the new mandatory environmental standards: 15 %

gross of eligible costs,

— investment aid to obtain a higher level of environmental protection than required by the

mandatory standards: 20 % gross of eligible costs,

— investment aid to improve the level of environmental protection for undertakings in sectors with

no mandatory standards: 20 % gross of eligible costs.

(31)

In the case of aid for mining training, aid could be combined with any other public aid for the same
purpose, provided the combined total did not exceed the limits laid down in paragraph 6.1(c) of the
regulatory bases in the Spanish Ministerial Order, i.e. 100 % of eligible costs.

(32)

In the case of aid for mining safety:

aid for projects in this field could be combined with any other public aid for the same purpose,
provided the combined total did not exceed the limits laid down in paragraph 6.1(b) of the regulatory
bases in the Order, i.e. 100 % of eligible costs.

3. Comments from Spain

(33)

Spain submitted to the Commission additional
scheme, which consisted mainly of the following elements.

information and arguments concerning the aid

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(34)

(35)

(36)

(37)

The aid scheme for the years 2001 and 2002 was notified correctly and was complete. The
Commission was provided with all the information necessary, so that, according to Spain, there
was no need to initiate the procedure. The aid granted should have been considered as existing aid.
Spain therefore requests the closure of the procedure and a positive decision. Spain considers that the
fact that the Commission waited a long time, until 17 July 2002, before commenting on the
notification runs counter to the principles of good administration and legal certainty.

The Autonomous Community of Castile-Leon never intended to implement a scheme which was
incompatible with the common market. The Autonomous Community acted in good faith and in a
very transparent way. Owing to the fact that the Commission did not react to the notification, the
Autonomous Community of Castile-Leon was justified in coming to the conclusion that the scheme
was compatible with the common market and could be implemented.

Spain considers that the measures do not confer any advantage on the coalmining undertakings,
because they are intended to cover the exceptional costs of the restructuring process. The aid for
research and development, environmental protection, mining training and mining safety are in
accordance with the State aid schemes concerning these matters. Regarding the aid for research
and development, Spain confirmed that the definition of industrial research is in accordance with
the definition in Annex 1 of the Community framework for State aid for research and development.

Regarding environmental aid, Spain provided the Commission with additional information about the
different categories of aid, the national and regional standards that had to be complied with and the
coalmines benefiting from such aid and the specification of the costs related to the rehabilitation of
polluted industrial sites. Spain described in detail the measures covered by the aid. Spain confirmed
the fact that the aid covering 15 % of eligible costs to meet new standards was strictly limited to
environmental purposes. In the net calculation of the aid, account was taken of the benefits obtained
as a result of the investment. In the calculation of the eligible costs, the greater potential value of the
rehabilitated areas was taken into account.

(38) With regard to aid for training, Spain considered that the amounts granted were very low and would
therefore not distort competition. With regard to the aid for mining safety, Spain stresses that safety
at mines is not always sufficient and it is therefore necessary to grant aid in this respect. The costs
related to this issue are exceptional and have to be covered.

(39)

Spain corrected some amounts which had been granted to several coalmining undertakings. Some
errors had been made in the figures submitted at previous stages.

4. Assessment of the aid scheme

(40)

The Commission is restricting its assessment to the aid measures related to research and devel-
opment, environmental protection, training and safety. Aid measures to cover exceptional costs,
which were also covered by the decision of 19 February 2003 to initiate the present investigation
procedure, will be the subject of a separate decision. Although it is the aid scheme which will be
assessed in this Decision, the Commission will also refer to individual cases, as the aid has been put
into effect by Spain.

4.1. Application of Council Regulation (EC) No 1407/2002

(41) Given that the ECSC Treaty and Decision No 3632/1993/ECSC both expired on 23 July 2003, the
compatibility of the notified measures has to be assessed on the basis of Council Regulation (EC)
No 1407/2002 of 23 July 2002 on State aid to the coal industry (1). Article 14(2) of that Regulation
does not apply.

(1) OJ L 205, 2.8.2002, p. 1. Regulation as last amended by the 2003 Act of Accession. See also point 47 of the
Communication from the Commission concerning certain aspects of the treatment of competition cases resulting from
the expiry of the ECSC Treaty.

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(42)

(43)

(44)

(45)

(46)

In any case, the change of legislative framework, from the ECSC Treaty to the EC Treaty, does not
produce a conflict as regards the assessment of the aid granted by the Autonomous Community of
Castile-Leon. The relevant provisions of Regulation (EC) No 1407/2002 and of Decision
No 3632/1993/ECSC are almost
the legislative
framework of the ECSC Treaty would not have led to a different outcome.

identical, and assessment on the basis of

4.2. Application of Article 87(1)
In order to determine whether the scheme’s measures constitute aid within the meaning of Article
87(1) of the Treaty, it must be established whether they favour certain undertakings, whether the aid
is granted by a Member State through State resources, whether the measures in question distort or
threaten to distort competition and whether they are liable to affect trade between Member States.

The first condition from Article 87(1) relates to the possibility of measures favouring certain under-
takings. It is necessary to determine, firstly, whether beneficiary undertakings derive economic benefit
and, secondly, whether this benefit is granted to a specific type of undertaking. The aid provides clear
economic benefits for its beneficiaries in that it constitutes a direct subsidy which covers current
expenses which the undertakings would have to bear themselves. Moreover, the measures in question
are aimed solely at coalmining undertakings in the Autonomous Community of Castile-Leon. They
therefore favour certain undertakings over their competitors, i.e. they are selective.

The second condition from Article 87 relates to the granting of aid by States or through State
resources. In this particular case, the existence of State resources is demonstrated by the fact that the
measure is effectively financed by the public budget of a regional authority.

In accordance with the third and fourth conditions specified in Article 87(1) of the Treaty, the aid
must not distort or threaten to distort competition or affect or be liable to affect trade between
Member States. In the case in hand, the measures do threaten to distort competition as they reinforce
the financial position and scope for action of the beneficiary undertakings compared with their non-
beneficiary competitors. Although intra-Community trade in coal is very limited and these under-
takings do not export, national production benefits from the fact that undertakings established in
other Member States have less scope for exporting their products to the Spanish market. Moreover,
these measures also distort competition and affect trade between Member States in that they are
complementary to other measures approved by the Spanish Government.

(47)

For these reasons, the measures in question fall within the scope of Article 87(1) of the Treaty and
may be considered compatible with the common market only if they qualify for one of the dero-
gations provided for in the Treaty.

(48)

The derogations provided for in the Treaty are the object of frameworks for these three categories of
aid, which are listed in Article 3 of Regulation (EC) No 1407/2002:

— Community framework for State aid for research and development. (Communication 96/C 45/06
of 17 February 1996 (1), amended by Communication 98/C 48/02 of 15 February 1998 (2) and
Communication 2002/C 111/03 of 8 May 2002 (3)),

— Community guidelines on State aid for environmental protection (Communication 2001/C 37/03

of 3 February 2001 (4)),

— Commission Regulation (EC) No 68/2001 of 12 January 2001 on the application of Articles 87

and 88 of the EC Treaty to training aid (5).

(1) OJ C 45, 17.2.1996, p. 5.
(2) OJ C 48, 13.2.1998, p. 2.
(3) OJ C 111, 8.5.2002, p. 3.
(4) OJ C 37, 3.2.2001, p. 3.
(5) OJ L 10, 13.1.2001, p. 20. Regulation as last amended by Regulation (EC) No 363/2004 (OJ L 63, 28.2.2004, p. 20).

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4.3. Notification of aid

(49) With regard to the notification of aid which a Member State intends to grant to the coal industry, in
accordance with Article 8 of Decision No 3632/93/ECSC, Spain notified the Commission on 31
March 1998 of the 1998-2002 modernisation, rationalisation, restructuring and activity-reduction
plan based on the 1998-2005 plan for the coal industry and alternative development of coalmining
areas, which was approved by the Commission in Decision 98/637/ECSC of 3 June 1998 (1). In this
plan, the Spanish Government provides for financial support to cover the aid provided for in Articles
3, 4 and 5 of Decision No 3632/93/ECSC within the framework of the abovementioned plans.

(50)

In accordance with Article 9(10) of Regulation (EC) No 1407/2002, which coincides with Article 9(1)
of Decision 3632/93/ECSC, Member States are to notify all the financial support which they intend
to grant to the coal industry in the following year. By letter of 19 June 2000 Spain notified aid
measures to the Commission. The Commission did not react to this notification within the period
laid down in Article 9(4) of Decision No 3632/93/ECSC and therefore the aid in relation to the year
2000 is deemed to be authorised, as already concluded in the Decision of 19 February 2003, by
which the Commission initiated the formal investigation procedure. However, as also concluded in
the decision of 19 February 2003, Spain failed to fulfil its obligations to submit prior notification for
2001 and 2002. Consequently, the aid granted by Castile-Leon for 2001 and 2002, as notified by
Spain on 5 September 2002, must be considered to be non-notified aid.

4.4. Assessment of aid for research and development (R & D)

(51)

The Commission has analysed these aid measures in the light of the Community framework for State
aid for research and development. In the period covered by the aid, this framework was contained in
Commission Communications 96/C 45/06 of 17 February 1996, 98/C 48/02 of 13 February 1998
and 2002/C 111/03 of 8 May 2002.

(52)

This concerns the following aid:

Project

186/01

136/02

Year

2001

2002

Undertaking

Carbones de Arlanza SA

Alto Bierzo SA

(in EUR)

Aid

14 514,44

133 829,29

The aid for R & D granted by the Government of Castile-Leon was subject to an open tender
procedure and was designed to facilitate coalmining under optimum safety conditions, without
adversely affecting conditions of trade in a manner contrary to the common interest.

(53)

improvement

The projects which were supported were aimed at acquiring new knowledge which would be useful
in developing new mining processes or bringing about a significant
in existing
they could increase
processes. These projects were selected because it was considered that
technical, organisational or scientific insight into a mining process or any relevant technology, as
well as adapt a process or technology and improve its efficiency. This measure was not intended to
subsidise practical experiments. These projects will play a crucial role in finding new solutions. The
intention of the Spanish authorities was to realise or accelerate those developments which made an
important contribution to the Government’s objectives of a more efficient and competitive coal-
mining industry and which would not have been realised or applied on a wide scale without financial
support from the Government. In view of the above, the Commission considers that these activities
fall within the definition of industrial research in Annex I of the Community framework for State aid
for research and development. The final results of these research activities will be used in developing
plans of designs for new or modified mining processes.

(54)

to the Community
The eligible costs were in keeping with the costs as defined in Annex II
framework. The aid intensity was low and in both cases the aid was granted to SMEs. The aid
intensity did not exceed the limits laid down in Section 5 of the Community framework.
In
accordance with the provisions of Section 6 of the Community framework, the aid had to serve

(1) OJ L 303, 13.11.1998, p. 57.

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as an incentive for mining undertakings to carry out additional R & D activities and also as a stimulus
for undertakings which had never engaged in such activities. As the recipients were SMEs, the
Commission assumes,
in accordance with point 6.4 of the Community framework, that the aid
provided a necessary incentive.

(55)

The Commission must therefore conclude that the aid scheme for research and development is in
accordance with the abovementioned framework.

4.5. Assessment of aid for environmental protection

(56)

The Commission analyses aid measures of this type in accordance with the Community guidelines on
State aid for environmental protection.

(57)

the Community guidelines. As far as water pollution is concerned,

Taking into account the information submitted by Spain, the Commission considers that the aid
scheme was intended, inter alia, to help SMEs adapt to new Community standards for a period of
three years from the adoption of new mandatory Community rules, to foster investment in the
absence of mandatory Community standards and to foster investment to ensure compliance with
national standards that were more stringent than the applicable Community standards. The scheme
authorised this aid up to a maximum of 15 % gross of eligible costs, which was in line with the
Community guidelines. The Commission considers that the investments concerned were in keeping
with Section E.1.6 of
the
investments were indispensable for controlling the movement of minewater from abandoned
mines. The purpose of these investments was,
to
prevent flooding and to help ensure safe movement of the minewater. This water had to meet the
quality standards laid down in Spanish legislation. The Commission considers that, in the definition
of the costs qualifying for funding relating to investments, provision was made in the net calculation
of the aid for taking account of the benefits obtained as a result of the investment. This element is in
accordance with point 37 of the Community guidelines.
In accordance with point 38 of the
Community guidelines, the eligible costs took into account the greater potential value of the reha-
bilitated areas. With regard to the rehabilitation of mines, eligible costs were limited to the cost of
including manpower, materials and the depreciation of machinery necessary to
mining works,
prevent the release of gases and liquids from underground mines, prevent access to dangerous
mines and prevent water contamination, as well as for mine-waste tip reclamation. In this respect,
the scheme conformed to point 36 of the Community guidelines.

the groundwater table,

inter alia, to control

(58)

The following aid granted by Castile-Leon:

Project

17/01

477/01

607.1/01

17/02

Year

2001

2001

2001

2002

Undertaking

MSP.

Mina la Sierra

Carbones San Isidro y María

MSP.

(in EUR)

Aid

580 027,42

5 395,65

8 106,12

136 450,88

concerns environmental rehabilitation of opencast mines and,
investment in a transformer station and electricity line.

in the case of project 607.1/01,

(59) After analysing the information submitted by Spain, the Commission considers that the interventions
made by undertakings repairing environmental damage by rehabilitating polluted industrial sites may
come within the scope of the Community guidelines. Environmental rehabilitation costs are historical
costs. As a result of the abandonment of mining activities, minewater would flood the mines. Owing
to the structure of the ground and various currents it is, in many cases, not clear which mine is
responsible for such water, which could endanger the environment and has to be kept under control.
As a result, it is not possible to identify the polluter. Moreover, in many cases, ownership of mines
has changed or mines do not exist any more. The Commission therefore considers that the coal-
mining undertakings currently operating the mines cannot be made to bear the cost. Consequently,
the aid scheme to cover the costs of rehabilitation of mines was in conformity with the Community
guidelines in these cases.

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(60)

The following aid granted by Castile-Leon:

Project

137/01

237/01

607.2/01

1147/01

2117.1/01

2117.2/01

27/02

137/02

1147.1/02

1147.2/02

Year

2001

2001

2001

2001

2001

2001

2002

2002

2002

2002

Undertaking

Alto Bierzo, SA

Antracitas de Arlanza

Carbones San Isidro y María

Coto Minero del Sil

Unión Minera del Norte

Unión Minera del Norte

Hullera Vasco Leonesa

Alto Bierzo, SA

Coto Minero del Sil

Coto Minero del Sil

(in EUR)

Aid

93 825,20

9 916,70

8 119,04

60 101,21

55 934,56

136 506,80

292 504,00

15 879,22

68 582,02

47 856,86

concerns work to rehabilitate or ensure the safety of mine-waste tips, to protect watercourses and to
restore land above disused mines. With regard to these individual cases, the Commission also
considers that the deterioration of the environment occurred over many years, that there were no
rules on rehabilitation or that it is not even possible to identify clearly who is responsible. The
the abovementioned coalmining undertakings which are
Commission therefore considers that
currently operating the mines cannot be made to bear the cost. In keeping with point 38 of the
Community guidelines, the aid intensity did not exceed 100 % of the eligible costs and did not
include 15 % of the total cost of the work. The eligible costs were equal to the cost of the work less
the increase in the value of the land.

(61)

The following aid granted by Castile-Leon:

Project

2111.1/01

2111.2/01

2111.3/01

2111.4/01

2111.5/01

891/02

2111.1/02

2111.2/02

2111.4/02

2111.5/02

2111.6/02

2111.7/02

211.1/02

211.2/02

Year

2001

2001

2001

2001

2001

2002

2002

2002

2002

2002

2002

2002

2002

2002

Undertaking

Unión Minera del Norte

Unión Minera del Norte

Unión Minera del Norte

Unión Minera del Norte

Unión Minera del Norte

Campomanes Hermanos

Unión Minera del Norte

Unión Minera del Norte

Unión Minera del Norte

Unión Minera del Norte

Unión Minera del Norte

Unión Minera del Norte

Viloria Hermanos SA

Viloria Hermanos SA

(in EUR)

Aid

109 569,31

230 183,55

121 656,87

303 840,71

306 940,49

89 232,00

35 526,45

75 452,05

118 602,83

205 304,23

248 210,85

626 746,00

87 880,00

87 880,00

19.2.2005

EN

Official Journal of the European Union

L 48/41

although notified by Spain as aid to cover exceptional costs arising from restructuring (Article 7 of
Regulation (EC) No 1407/2002), was intended principally for environmental protection purposes,
since the objective was to reclaim land on the surface above mines and to demolish fixed installations
on the surface so as to help mitigate the environmental impact of disused coalmines. At the time that
the work was carried out, there were no rules on the restoration of the sites affected.

(62)

The Commission considers that the special nature of mining means that a large part of the current
pollution, caused by gases and water escaping from mines or from surface waste tips, derives from
past activities. In most cases, therefore, it is a question of making good the impact of earlier mining
activity, the aid has to be considered to be a historical cost, and it is not possible to identify the
polluter clearly. The aid was therefore intended for environmental rehabilitation in mining regions.
The environmental damage done to the quality of the soil or of surface water or groundwater falls
within the scope of the Community guidelines. The aid intensity did not exceed 100 % of the eligible
costs and did not include 15 % of the total cost of the work. The eligible costs, being the cost of the
work less the increase in the value of the land, were also in conformity with the Community
guidelines.

(63)

In view of the above, and after analysing the information submitted by Spain, the Commission has
come to the conclusion that the aid scheme for environmental protection was compatible with the
abovementioned Community guidelines.

4.6. Assessment of aid for mining training

(64) On the basis of Regulation (EC) No 1407/2002 on State aid to the coal industry, and in particular
Article 3(1) and recital 21 thereof, training aid may be granted, provided that such aid is granted in
accordance with the requirements and criteria laid down by the Commission for this category of aid.
The Commission has therefore assessed the compatibility of these aid measures with the provisions of
Regulation (EC) No 68/2001 on the application of Articles 87 and 88 of the EC Treaty to training
aid. Spain had to notify these measures because the conditions for exemption from the notification
requirement laid down in that Regulation do not apply to State aid to the coal industry.

(65)

In the case of the following aid:

Project

183/01

453/01

473/01

1353/01

Year

2001

2001

2001

2001

Undertaking

Carbones de Arlanza SA

Mina Adelina SA

Mina la Sierra SA

Minas de Valdeloso SL

(in EUR)

Aid

6 436,84

4 376,33

6 565,49

7 867,25

the Commission, after analysing the information submitted by Spain and taking into account the fact
that Spain ensured that the maximum aid intensities laid down in Article 4 had been respected when
applying the scheme, considers that the aid measures for mining training which the Autonomous
Region of Castile-Leon granted will not lead to any distortion of competition and can be allowed on
the basis of the abovementioned Regulation. In this respect, the scheme contained a reference to the
abovementioned Regulation.

4.7. Assessment of aid for mining safety

(66) After analysing the aid and the information submitted by Spain, the Commission considers that this
aid has to be assessed on the basis of Regulation (EC) No 1407/2002 on State aid to the coal
industry.

L 48/42

EN

Official Journal of the European Union

19.2.2005

(67)

The following aid granted by Castile-Leon:

Project

182/01

452/01

472/01

502/01

602.1/01-LE

602.3/01 PA

1352/01

452/02

502/02

1142/02

Year

2001

2001

2001

2001

2001

2001

2001

2002

2002

2002

Undertaking

Carbones de Arlanza SA

Mina Adelina SA

Mina La Sierra SA

Minex, SA

Carb. San Isidro y María

Carb. San Isidro y María

Minas de Valdeloso SL

Mina Adelina SA

Minex SA

Coto Minero del Sil

(in EUR)

Aid

39 630,74

23 991,44

12 020,24

120 202,42

30 050,61

13 044,13

35 520,76

16 224,00

64 835,64

383 920,19

concerns costs which undertakings have to bear in order to improve safety and health conditions.
These costs were not related to current production and were intended for investments in equipment
and mine workings. In this respect, the Commission considers that the amounts granted did not
exceed the costs of the safety works and has come to the conclusion that these measures were in
accordance with Article 7 of the aforementioned Regulation and with point 1(g) of the Annex thereto
concerning the definition of the costs referred to in Article 7. On this basis, the Commission has
come to the conclusion that the aid for mining safety was in accordance with the Regulation.

5. Conclusion

The Commission must conclude that Spain unlawfully put into effect the aid for research and
development, environmental protection, mining training and mining safety to coalmining under-
takings in the Autonomous Community of Castile-Leon in 2001 and 2002, in breach of Article
88(3) of the Treaty. However, after analysing the measures and the information submitted by Spain,
the Commission,

HAS ADOPTED THIS DECISION:

Article 1

The aid scheme for research and development, environmental protection, mining training and mining safety
which Spain implemented in favour of coalmining undertakings in the Autonomous Community of Castile-
Leon in 2001 and 2002 on the basis of the Orders of the Regional Ministry of Industry, Trade and Tourism
of 19 December 2000 and 19 December 2001 governing the granting of aid for mining is compatible with
the common market within the meaning of Article 87(3) of the Treaty.

This Decision is addressed to the Kingdom of Spain.

Article 2

Done at Brussels, 30 March 2004.

For the Commission

Loyola DE PALACIO
Vice-President