2008/440/EC: Commission Decision of 28 November 2007 concerning the WRAP Printing and Writing Paper Scheme notified by the United Kingdom — (registered under document number C 45/05) (notified under document number C(2007) 5421) (Text with EEA relevance)
Date: 2007-11-28
Institutions: European Commission
Subjects: State aid, United Kingdom, control of State aid, production aid, pulp and paper industry, waste recycling

L 155/20

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COMMISSION

COMMISSION DECISION

of 28 November 2007
concerning the WRAP Printing and Writing Paper Scheme notified by the United Kingdom —
(registered under document number C 45/05)

(notified under document number C(2007) 5421)

(Only the English version is authentic)

(Text with EEA relevance)

(2008/440/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

(2)

Having regard to the Treaty
Community,
and in particular
Article 88(2) thereof,

establishing the European
subparagraph of
the

first

Having regard to the Agreement on the European Economic
Area, and in particular Article 62.1(a) thereof,

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

On 7 December 2005 the Commission decided to open
the procedure laid down in Article 88(2) of
the EC
Treaty. On 24 January 2006 the United Kingdom sent
its observations
in reply to the decision to open
proceedings. The Commission received comments on
10 and 14 February 2006 from M-Real, a manufacturer
of recycled P & W paper with production locations in the
United Kingdom and from the Confederation of Paper
Industry (hereinafter ‘CPI’), the United Kingdom associa-
tion representing
industry. The United
Kingdom responded to the comments from the third
parties on 3 May 2006. On 19 March 2007 the
Commission asked for
information to the
United Kingdom. The United Kingdom responded on
11 May 2007. On 14 July 2007, the authorities of the
United Kingdom met with representatives of
the
Commission. The United Kingdom provided further
information
and
14 September 2007.

the paper

August

further

2007,

21

10

on

Whereas:

2. DESCRIPTION OF THE MEASURE

Granting authority

1. PROCEDURE

(1)

By letter of 22 July 2005, registered in the Commission
on 26 July 2005 under number A/6948,
the United
Kingdom notified to the Commission a scheme for
increasing the manufacturing capacity of printing and
writings (hereinafter ‘P & W’) paper from recycled fibre
under
the Waste and Resources Action Programme
(WRAP). The notification was registered under number
N 364/05. The Commission asked further information by
letter dated 9 September 2005, registered under number
D/56952. The United Kingdom replied by letter dated
28 October 2005, and registered on 7 November 2005
under number A/38954.

(1) OJ C 9, 14.1.2006, p. 6.

efficient markets

specifically to promote

(3) WRAP is a company established by the Government of
the United Kingdom in partnership with other share-
holders to promote sustainable waste management, and
more
for
recycled materials and products. Its central objective is
to enable recycled markets to function more effectively
by stimulating demand for
and
products, thereby improving the economics of collection.
to the
Although WRAP functions
Government and implements government policies,
it
has the form of a private company. WRAP's shareholders
comprise several representatives of the industries with
some interests in waste management, among them the
Industries and the Chartered
Confederation of Paper
charities
Institute of Waste Management,
such as
Wastewatch, and representatives of
the devolved and
British governments.

recycled materials

an adjunct

as

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L 155/21

(4)

Objectives

lead to a net

and writing paper used by

The objective of
the notified scheme is to increase
collection and recycling of printing and writing (P &
W) paper
from offices and businesses by increasing
recycling capacity under the obligation to collect addi-
tional waste paper. The United Kingdom expects that the
increased recycling capacity, linked to the legal obligation
the aid to use new additional
by the beneficiary of
increase in additional
collections, will
collections of P & W waste paper. The definition of
printing
the United
Kingdom authorities includes the following types of
wood-free papers: paper for printed publications, copier/
printer paper and magazine papers. The United Kingdom
has excluded other types of wood-free paper such as
tissue paper and all
types of wood-containing paper
from the tender. Currently, most of the paper produced
by businesses and offices is not collected and sorted for
low
recycling, due in particular to technical difficulties,
costs of landfill, and price volatility. The 2006 statistics
from the Confederation of Paper Industries have shown
that collections of P & W paper in the United Kingdom
are around 10 % (1).

The tender

(5) WRAP intends to address the objectives by offering
grants to paper manufacturers to increase P & W paper
reprocessing capacity that utilises mainly waste paper
from offices and businesses as its raw material
input.
The budget for this measure is between GBP 6 million
and GBP 20 million, (approximately between EUR 8,6
million and EUR 28,6 million). The budget will cover the
period until 31 March 2011. Between two and ten paper
producers are expected to benefit from the aid. The aid is
financed through the general budget of the Department
for Environment, Food and Rural Affairs (DEFRA).

(8)

document will state that ‘the raw material source is to
be, as a minimum, and in order of priority:

— raw materials

from offices or non-residential/
non-household sources not previously collected for
recycling,

— raw materials from municipal sources not previously

collected for recycling,

— existing collections.’

Moreover, at least 50 % of the waste paper used must
come from offices and businesses and, similarly, at least
50 % of the waste paper used must come from new
collections of raw materials not previously collected for
recycling.

By prioritising collections from offices or businesses
above the rest of the sources in the tender, the United
Kingdom authorities
it will be highly
probable that a bid that includes a high proportion of
household waste paper or existing collections, rather than
wood free P & W waste paper from offices and/or busi-
nesses, will not succeed.

expect

that

(6)

The notified aid is to be granted following a competitive
tender process,
inspired by EC public procurement
procedures. The following conditions are particularly
relevant.

Aid intensity and eligible cost

(9) While the final intensity of the aid granted to each bene-
ficiary will result from the tender, the maximum inten-
sities for large enterprises and for SMEs is 30 % and 40 %
respectively. These intensities can be increased by 5 % if
the beneficiary is based in an Article 87(3)(c) assisted
the beneficiary is based in an
region or by 10 % if
Article 87(3)(a) assisted region.

Waste paper sourcing

(7)

Successful bidders will be those whose collections are
predominantly from offices and business and are of
P & W waste paper. Accordingly, the tender invitation

(1) http://www.paper.org.uk/info/reports/fact2006colour0707.pdf

(10)

In cases when the entire investment would not have been
made in the absence of aid, and a part or all of that
investment goes beyond state of
the United
Kingdom will take an appropriate comparator. Eligible
costs will be calculated net of
the benefits accruing
from any increase in capacity, cost savings engendered
during the first five years of the life of the investment
and additional ancillary production during that five-year
period.

the art,

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(11)

(12)

(13)

(14)

In case the aid concerns, for example an investment in a
new P & W production plant,
in accordance with the
Community guidelines on State aid for environmental
protection, hereinafter ‘the environmental guidelines’ (1),
the eligible costs would consists of the investment costs
the new plant, minus the costs of a comparable
of
instead, the project only
conventional P & W plant. If,
concerns an additional de-inking unit
to existing de-
inking units, or intended to build conventional new
production capacity but agreed to add an extra de-
inking unit to comply with the criteria of the scheme,
then the extra investment costs necessary to meet the
environmental objectives would be simply the costs of
these additional de-inking units.

inks.

including all

is, however, a very significant

(and rapidly
There
growing) volume of
these printing processes, which
currently cannot be de-inked in an efficient and envir-
onmentally sound manner (2). The inks involved include
ink jets,
in particular water-based inks,
first generation
much of solid toner inks and all of
liquid toner
consisting of
inks
In addition,
particles of a size between 10 μm and 100 μm can, in
principle be de-inked, but the efficiency of this process
deteriorates significantly towards the lower, and upper,
end of this spectrum (3). Recent research has shown that
the presence of as little as 10 % of pigment-based black
inkjet inks in a mixture of recovered papers spoils the de-
inkability of the whole mixture such that it is no longer
suitable for producing P & W paper (4).

The United Kingdom authorities have committed them-
selves to sending a report to the Commission every year.
This report will contain a description, for each bene-
from the
the comparator used to deduct
ficiary, of
reference
comparable
eligible
investment that does not provide the same degree of
environmental protection,
in line with the principle
referred to in point 37 of the environmental guidelines.

technically

costs

the

The investment must go ‘beyond the state of the art’

The United Kingdom will only subsidise investments for
the production of P & W paper from waste wood-free
P & W paper when the investment goes beyond the state
of the art. This means that the projects should involve
new technology in their facilities and processes, whose
trialling or demonstration will assist in solving the main
technical barrier for recycling P & W paper, namely the
de-inking of wood-free waste paper. A highly effective
de-inking process is crucial, as consumers of P & W
paper request a bright, clean and white paper to print.
The United Kingdom has submitted that the office papers
are printed with the following printing processes:

Printing processes for office papers (*)

Office paper

Printing process

Copier papers; computer
printout

Xerography (laser print)
mostly monochrome
Ink-jet particularly for colour

Letter, business forms, etc.

Offset headset
Sheet-fed offset
Xerography
Ink-jet

(*) Carré B & Magin. Seventh Research Forum on Recycling, 2004.

(15)

Existing paper producers from P & W waste paper, such
as M-Real, rely on specialised niche sources of P & W
waste paper, such as commercial printers, which provide
a reliable and consistent quality furnish, using inks which
are for the most part relatively easy to de-ink. The mixed
waste from offices that is being targeted by the tender
will contain a significant proportion of inkjet and toner
that pose unresolved technological de-inking
inks
problems (5).

(16)

In addition to the purely technical aspects, any successful
bidder will need to demonstrate that it intends to use
technology and/or processes which go beyond tech-
nology which has already been developed and which is
i.e. which is ‘economically profitable and
in use today,
therefore normal practice’.

Notification of large individual aid amounts

(17)

The authorities of the United Kingdom have undertaken,
in accordance with paragraph 76 of the environmental
guidelines, to notify to the Commission any individual
case of investment aid granted under the Scheme where
the eligible costs exceed EUR 25 million and where the
aid exceeds the gross grant equivalent of EUR 5 million,
and that
the
Commission has authorised it.

such aid before

shall not grant

it

(2) ‘Assessment of
consequences
the
http://www.piranet.com/

the

for

changing print market and its potential
International.

de-inking

sector’.

Pira

(3) ‘Digital prints: a survey of the various de-inkability behaviours’. B-
Carré, L. Magnin & C Ayala. Centre Technique du Papier Grenoble.
(4) European Round Table ‘De-inking of Digital Prints’. Munich,

(1) OJ C 37, 3.2.2001, p. 3.

31.1.2007. Axel Fischer, INGEDE.

(5) See, for example, documents drafted by the International Association
of the De-Inking Industry (INGEDE). Many of them are available at
http://www.ingede.com/ingindxe/publications.html

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Appropriate measures

4. COMMENTS FROM THIRD PARTIES

(18)

The United Kingdom authorities have undertaken to
adapt the scheme to the new environmental guidelines
and to inform the
when they
taken to
Commission of
adapt the scheme.

the appropriate measures

into force

enter

(25)

Both M-Real and the CPI held that the scheme proposed
by the United Kingdom was going beyond the state of
the art, without however, specifying this in detail. The
the
CPI also advocated the environmental benefit of
measure and argued that no distortion of competition
would be expected from the scheme.

3. REASONS TO INITIATE THE PROCEDURE OF
ARTICLE 88(2)

(19)

In its Decision to initiate the procedure of Article 88(2),
of the Treaty, the Commission expressed the following
doubts as regards the compatibility of the scheme.

(26)

(20)

The Commission had doubts concerning the justification
used by the United Kingdom authorities that the current
low utilisation of recycled content in the production of
P & W papers in the Community was enough to state
that manufacturing P & W paper using recycle fibre
goes beyond the current
in the
Community.

‘state of

the art’

(21)

The Commission had doubts that an increase in paper
manufacturing capacity in the United Kingdom was
needed to increase the waste paper collection demand.

(22)

The Commission had doubts that
the measure was
targeted to maximise the environmental benefits, as
P & W waste paper could be used to manufacture
many other products.

(23)

in question,

The Commission had doubts in relation to the method of
calculation of the eligible costs proposed by the United
Kingdom. The method initially proposed by the authori-
ties of the United Kingdom was based on the premise
that where the market would not give rise to the
investment
costs
the
would be all the costs of the investments. Therefore,
the costs of a reference investment which creates the
same capacity, but which does not provide the same
environmental benefits, would not be subtracted. The
into
Commission considered
account of such reference investment the costs calcu-
lation would be disproportionate and not in line with
point 37 of the environmental guidelines.

that without

relevant

eligible

taking

(24)

Finally, the Commission had doubts that the measure
proposed by the United Kingdom was the least distortive
instrument available to address the problem at stake.

5. COMMENTS FROM THE UNITED KINGDOM

the procedure,

the United
Following the opening of
Kingdom gave further commitments on the implemen-
tation of the notified scheme (see section 2) and provided
further information and arguments to address the doubts
the Commission originally
identified. The United
information
Kingdom provided, scientific and statistical
concerning the state of the art of recycling P & W paper.

(27) As

the

regards

environmental benefits,

the United
Kingdom held that using P & W waste paper for new
P & W paper is more efficient than using it for tissue
paper or fuel for the production of energy. In addition,
the current
infrastructure and existing uses for waste
P & W paper would not suffice to absorb the current
quantities of waste P & W paper being produced. It is
increase in the future
expected that this problem will
as consumption of P & W waste paper increases, and
consequently the amount of P & W waste paper being
produced also increases. Therefore, the United Kingdom
believes that by creating new uses for P & W waste paper,
it will reduce the amount of P & W waste paper going to
the landfill sites or to less efficient uses of the waste, such
as fuel.

(28)

The United Kingdom submitted that reasons for the
fundamental market failure lies in the lack of sustainable
uses for the growing surplus of P & W waste paper and
that this is the main reason for proposing the scheme.
Encouraging recycling capacity directly is therefore the
best way to address the market failure and to achieve
the environmental benefits.

6. ASSESSMENT OF THE MEASURE

6.1. Existence of aid under Article 87(1) EC Treaty

(29) Under Article 87(1) EC Treaty,

‘any aid granted by a
Member State or through State resources in any form
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

by

or

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(30)

In this case, the measure will be funded by resources
granted by the State under the WRAP programme. The
aid will be granted to individual beneficiaries. The
competitive selection procedures may ensure that
the
amount of the subsidy is limited to the minimum, but
does not take away the aid character of the measure. The
measure distorts or threatens to distort competition, as it
may cover a significant part of investment costs, which
would allow the beneficiary to charge a lower price for
the P & W paper it produces. The measure will affect the
market for new paper, but also the market for waste
paper, which is valuable commodity in demand by the
paper industry. The measure is likely to affect
trade
between Member States, since both new paper and
waste paper are traded internationally. A large amount
of the United Kingdom paper consumption is imported
mainly from other Member States and the United
Kingdom is among the biggest exporters of waste
paper (1).

(31)

Therefore,
Article 87(1) of the EC Treaty.

the scheme qualifies as State aid under

(34)

The scheme may increase the capacity to produce P & W
paper, which would lead to an increase of quantities of
waste paper that would only be partially recycled. In any
case, only part of the waste paper used to manufacture
P & W paper will be paper sold by each beneficiary itself.
Consequently, the Commission considers that increasing
the recycling rate of paper is unlikely to reduce the bene-
ficiaries’ own pollution. It is more likely that the envi-
ronmental benefits may derive from indirect effects on
supply and demand for waste paper that affect all users
and providers of waste paper concerned, not only the
beneficiary.

(35) Other interpretation of the guidelines might result

in
Member States subsidising large investments, with high
intensities, in all those sectors where used products can
be used as materials for production or where such use is
the general practice in that sector. Moreover, following
such interpretation, the rules could be circumvented by
granting aid not to the polluters, that under Community
law would not be obliged to take care of
the other
company's pollution, but to the companies taking care
of the pollution.

(32)

By notifying to the Commission the current scheme, the
United Kingdom has fulfilled with the obligation of
Article 88(3) of the EC Treaty.

(36) However, as explained later, it is possible that part(s) of
the selected investment projects will be eligible for envi-
ronmental aid for other reasons.

6.2. Compatibility

for
increasing the recycling rate of paper under
the environmental aid guidelines

investment

the

aid

of

this

increases

(33) Although the aid is granted with a view to environmental
protection, it does not fall within the scope of the envi-
ronmental guidelines. Point 29 of the environmental aid
guidelines does not apply to aid for investments in
recycling paper capacity even if
the
recycling rate of P & W paper. This point applies to
aid that encourages the beneficiary to reduce its own
pollution. It does not apply to aid that encourages the
beneficiary to reduce the pollution generated by the
activities of other undertakings. The environmental aid
‘the
guidelines are based on the general principle of
polluter pays’, and every interpretation of the guidelines
should strictly comply with this underlying principle.
This interpretation is confirmed by point 18(b) of the
environmental aid guidelines, which states that aid ‘may
act as an incentive to firms to improve on standards or
to undertake further
investment designed to reduce
pollution from their plants’ and as such it has been
applied by the Commission in other cases of investments
increasing recycling paper capacity.

6.3. Compatibility

of

the

for
increasing the recycling rate of paper under
the regional guidelines and other provisions of
the Treaty

investment

aid

(37)

The United Kingdom has not provided any information
the
that could allow approving the scheme under
Guidelines on National Regional Aid for 2007-2013 (2).

(38) Although complemented with the regional

as

notified

exclusively

environmental

the Commission takes

the environmental guidelines,

intensity
bonuses of
the scheme
was
aid.
the
Therefore,
regional intensity bonuses of the scheme, but it cannot
consider that the scheme as such is compatible with the
Guidelines on national
in
relation to regional aid a different analysis would be
possible when the Commission assesses the individual
notifications and receives information about the benefi-
ciaries.

regional aid. Nevertheless,

into account

(1) CEPI, Special Recycling 2004 Statistics, page 5, available at

http://www.cepi.org/files/Sp%20Rec%202005-135002A.pdf

(2) OJ C 54, 4.3.2006, p. 13.

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L 155/25

(39)

The Commission considers that other rules based on
Article 87(3)(c) are not applicable, and that other
exemptions set out in Article 87(2) and (3) of the EC
Treaty are not applicable to the scheme.

6.4. Compatibility of aid directly on the basis of

Article 87(3)(c)

(40) As the environmental guidelines are not applicable, the
to be assessed directly on the basis of
case has
Article 87(3)(c).
In fact, the Commission has done so
in the past, notably on two occasions for a recycling
scheme administered by WRAP (1) and two other cases
in the paper industry (2).

(43)

(41)

For investment aid where the beneficiaries will reduce the
waste generated by other undertakings (in particular
waste management and recycling), the Commission has
consistently applied the following criteria, which are
additional to the conditions for investment aid set out
in the environmental aid guidelines:

(a)

the aid does not indirectly relieve the polluters from
a burden that should be borne by them under
Community law, or from a burden that should be
considered as normal
the
polluters;

company

costs

for

(b) the investment goes beyond the ‘state of the art’ or
in an innovative

technologies

uses conventional
friendly manner;

(c)

the treated materials would otherwise be disposed of,
or be treated in a less environmentally friendly
manner; and

(d) the investment does not merely increase demand for
increasing

to be recycled without

the materials
collection of those materials.

(46)

(a) The investment does not indirectly relieve polluters from a

burden under EU law

(42) Although there are Community objectives as regards
recycling of waste paper imposed by Council Directive
99/31/EC of 26 April 1999 on the landfill of waste (3),
there is no obligation under EU law for the paper mills
to collect or recycle the paper that they have sold. In

(1) OJ L 102, 7.4.2004, p. 59, and N 412/05.
(2) OJ L 314, 28.11.2003, p. 26, and OJ L 53, 26.2.2005, p. 66
respectively. The criteria used in these cases are also commented
upon in the Annual Competition Report of 2004.

(3) OJ L 182, 16.7.1999, p. 1.

addition, there is no obligation under EU law for the
offices and other users in the private sector of P & W
paper to ensure the collection and recycling of the paper
they use. Therefore, the Commission takes the view that
the scheme proposed by the United Kingdom does not
relieve the beneficiaries or the suppliers of the waste
paper from any burden under EU law.

(b) The investment goes beyond the ‘state of the art’ or uses
conventional technologies in an innovative friendly manner

In the Commission's recent practice, ‘state of the art’ has
been interpreted as a process in which the use of a waste
product to manufacture an end product is economically
profitable normal practice. Where
the
concept of ‘state of the art’ should be interpreted from
common market
a
perspective.

technological

appropriate,

European

and

(44)

In general, using waste paper to manufacture paper is a
profitable and growing activity (4).
the
Commission has considered that,
for certain types of
paper, the use of waste paper should not be considered
to go beyond the state of the art in the Community (5).

In past cases,

(45) However, the scheme presented by the United Kingdom
is limited to increasing capacity to manufacture P & W
paper from P & W waste paper. The statistics commented
by the United Kingdom show that the recycling rate of
P & W waste paper in the EU are exceptionally low in
relation to the rest of the grades of paper. More impor-
tantly, there are technological barriers that impede the
manufacturing of P & W paper
from P & W waste
paper, in particular the difficulty to de-ink some of the
In addition, as the
inks used to print P & W paper.
United Kingdom will ensure,
the aid will not be
granted in relation to technology which has already
been developed and which is in use today, that is to
say technology is economically profitable and therefore
normal practice.

that

accepts

the Commission

eligible
Therefore,
investment under the scheme as described above,
for
de-inking P & W waste paper, goes beyond the current
state of the art in the Community. The Commission will,
however, have to assess
the compliance with this
criterion in more detail if the United Kingdom notifies
large individual grants under the scheme pursuant to its
commitment referred to in point 16 above.

(4) CEPI,

at
Special Recycling 2004 Statistics, p. 5,
http://www.cepi.org/files/Sp%20Rec%202005-135002A.pdf
See,
also, the Commission's Decisions in Hamburger AG (C 72/2001),
9 April 2002, OJ L 296, 20.10.2002, p. 50, and Kartogroup
(N 184/2000), 18 July 2001, OJ C 5, 8.1.2002, p. 2.

available

(5) C 73/2003 Stora Enso LangerBrugge, OJ L 53, 26.2.2005, p. 66. In
this case, the Commission concluded that a plant manufacturing
newsprint paper from 100 % rate of waste newsprint paper was
part of the state of the art in the EU.

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(c) The treated materials would otherwise be disposed of, or be
treated in a less environmentally friendly manner and (d)
the investment does not merely increase demand for the
materials to be recycled without
increasing collection of
those materials

(47) As the United Kingdom impose appropriate conditions as
regards the minimum proportion of waste paper that
otherwise would not be collected and otherwise would
be disposed of in landfill, the Commission is assured that
the scheme will bring a substantial and real environmen-
tal benefit. Secondary effects from the development of
new technologies and increased demand for P & W
waste paper may further
increase the environmental
benefits of the scheme.

(48)

In any event, the aid does not merely influence who will
use the paper, but will effectively increase the collections
of such paper.

(49)

(50)

The condition of a minimum 50 % of
feedstock not
previously collected for recycling is important to reduce
the potential distortion of competition in relation to
competitors that also use P & W waste paper, such as
tissue paper manufacturers and sellers of recycled pulp.

The Commission will have to look in more detail at the
potential distortion of competition and the environmen-
tal benefits of the individual cases that may be notified
by the United Kingdom, pursuant to its commitment
described in point 17,
in order to assess the level of
collections from offices and businesses, the level of addi-
tional new collections and the collections from SMEs.

A i d i n t e n s i t i e s

(51)

The notified aid intensities are in accordance with points
34 and 35 of the environmental guidelines.

E l i g i b l e c o s t s

(52)

In past cases dealing with increasing recycling capacity of
paper the Commission made a parallel with the environ-
mental guidelines (1). Point 37 of
the environmental
guidelines
costs must be
establishes
confined strictly to the extra investment costs necessary
to meet the environmental objectives. As described in
points 9 to 11 above,
the United Kingdom has
committed to respect this point. The Commission notes

eligible

that

(1) C 73/2003 Stora Enso Langerbrugge, OJ L 53, 26.2.2005, p. 66.

investment

In this respect,

the installations are replaced,

that aid may concern widely different situations such as
investments in new paper production capacity whether
or not
investments in
conversion or other changes to existing P & W paper
production capacity, investments in new pulping instal-
investments in conversion or other changes to
lations,
existing pulping installations,
in new de-
inking installations,
in conversion of or
investment
changes to existing de-inking installations and other
the United Kingdom has
investments.
committed to calculate in all cases the eligible costs by
deducting from the investment costs any appropriate
comparator (2). The Commission is aware that the iden-
tification of the appropriate comparator may involve a
the United
technically complex assessment. However,
Kingdom authorities have committed to sending an
annual report to the Commission that will contain a
description,
the appropriate
comparator used each time. The Commission considers
that the commitments expressed by the United Kingdom
confine the eligible costs strictly to the extra-investment
costs necessary to meet the environmental objective and
takes into account in all cases a comparable investment
of a similar capacity that does not provide the same
degree
The United
Kingdom has undertaken to respect the conditions of
paragraph 76 of
that
provides for the obligation to notify individually any
aid exceeding EUR 25 million and where the aid
exceeds the gross grant equivalent of EUR 5 million.
As a result of this undertaking, the Commission will be
able to verify the calculation of eligible cost for individual
notifications of large aid amounts.

the environmental guidelines

for each beneficiary, of

environmental

protection.

of

7. CONCLUSION

(53)

The notified measure falls within the definition of State
aid pursuant to Article 87(1) and the United Kingdom
has complied with its obligation to notify the aid
pursuant to Article 88(3) of the Treaty.

(54)

The notified aid intends to reduce the pollution generated
by other undertakings but does not
indirectly relieve
these polluters from a burden under the EU law. The
aid concerns investments that go beyond the state of
the art and is expected to bring a real environmental
benefit as it concerns materials that would otherwise
be disposed of in landfill or be treated in a less envir-
onmentally friendly manner. The aid will not merely
increase demand for materials to be recycled without
increasing collection of those materials.

(2) Where no standards exist, eligible costs consist of the investment
costs necessary to achieve a higher level of environmental protection
than that which the firm or firms in question would achieve in the
absence of any environmental aid.

13.6.2008

EN

Official Journal of the European Union

L 155/27

(55)

The eligible costs of the scheme will be calculated in line
with paragraph 37 of the environmental guidelines.

tender, with a budget of a maximum GBP 20 million (approxi-
mately EUR 28,6 million) and valid until 31 March 2011 is
compatible with Article 87(3)(c) of the EC Treaty.

(56)

In conformity with paragraph 76 of the environmental
the United Kingdom will notify to the
guidelines,
Commission any individual case of
investment aid
granted under
the Scheme where the eligible costs
exceed EUR 25 million and where the aid exceeds the
gross grant equivalent of EUR 5 million.

(57)

Therefore, the aid is found to be compatible with the
common market pursuant to Article 87(3)(c) of the EC
Treaty,

HAS ADOPTED THIS DECISION:

Article 1

The notified State aid WRAP Printing and Writing Paper
for
Scheme, which the United Kingdom is planning to call

Implementation of the measure is accordingly authorised.

Article 2

This Decision is addressed to the United Kingdom.

Done at Brussels, 28 November 2007.

For the Commission

Neelie KROES
Member of the Commission