Commission Decision (EU) 2023/2390 of 3 March 2023 on measure SA.43147 (2020/C) (ex 2019/NN) Belgium – Complaint concerning the granting by the Walloon Region of alleged unlawful aid to Renewi (notified under document C(2023) 1419)
Date: 2023-03-03
Institutions: Directorate-General for Competition, European Commission
Subjects: Belgium, State aid, Walloon region (Belgium), aid to undertakings, control of State aid, infringement procedure (EU), local tax, tax relief, underground storage of waste, waste disposal








L_202302390EN.000101.fmx.xml












Official Journal of the European Union


EN
Series L













2023/2390


10.10.2023







            COMMISSION DECISION (EU) 2023/2390
of 3 March 2023
         
on measure SA.43147 (2020/C) (ex 2019/NN)
Belgium – Complaint concerning the granting by the Walloon Region of alleged unlawful aid to Renewi


(notified under document C(2023) 1419)


(Only the French version is authentic)
(Text with EEA relevance)


THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union, and in particular the first subparagraph of Article 108(2) thereof,


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 those articles (1), and having regard to their comments,

Whereas:
1.   PROCEDURE







(1)


On 18 September 2015, a complaint was submitted to the Commission concerning State aid allegedly granted by the Walloon Region to the undertaking Renewi Valorisation & Quarry (formerly known as ‘Shanks’ (2), referred to below as ‘Renewi’) for operating the Mont-Saint-Guibert landfill in Belgium. The aid measure at issue allegedly resulted from the taxation at a reduced rate, on the basis of registrations for waste recovery and certificates of use granted by the Walloon authorities, of operations which in reality constituted waste disposal operations and, consequently, should have been subject to the standard rate of tax on waste disposal in landfills.










(2)


By letter of 6 February 2020, the Commission informed Belgium that it had decided to initiate the procedure provided for in Article 108(2) of the Treaty on the Functioning of the European Union (‘TFEU’) in respect of the aid.










(3)


The Commission decision to initiate the procedure was published in the Official Journal of the European Union (3). The Commission invited interested parties to submit their comments on the aid measure.










(4)


The Commission received comments from the Walloon Region on 14 April, 18 May, 6 August and 17 December 2020, 3 May 2021 and 17 May 2022, and from Renewi on 1 July 2020. The Commission forwarded the observations received from Renewi to the Walloon Region on 10 July 2020.










(5)


At the request of the Walloon Region, two meetings took place, on 22 October and 12 November 2020. Representatives of the Directorate-General for Competition, the Directorate-General for the Environment, Renewi and the Walloon Region participated in these meetings.










(6)


No further comments were received from third parties, Member States or the complainant.




2.   DETAILED DESCRIPTION OF THE ALLEGED AID MEASURE

2.1.   Title and description of the alleged aid measure







(7)


Inasmuch as the measure under scrutiny has already been described in detail in the opening decision (4), a description will be included in this Decision only as far as is necessary.










(8)


According to the complainant, the measure at issue consisted of applying, from 2005, a reduced rate of tax on the disposal of certain waste in the Mont-Saint-Guibert landfill, whereas the disposal of this waste should in principle have been subject to a higher rate of tax.










(9)


The complaint submitted in the present case did not concern the Walloon regional tax on waste disposal in landfills as such, but its application to the specific operations carried out in the Mont-Saint-Guibert landfill on the basis of registrations for waste recovery and related certificates of use granted successively to Renewi by the Walloon authorities between 2005 and 2015. According to the complainant, the granting of the aid from which the undertaking benefited derived from the incorrect classification of its activities as recovery operations, which led to a significant reduction in the amount of regional tax levied. According to the complainant, the alleged aid thus corresponds to the difference between the full rate of the regional tax – applicable to disposal operations – and the reduced rate applicable to recovery operations applied to Renewi’s disposal of certain waste in the Mont-Saint-Guibert landfill. Renewi therefore benefited from a lower rate than that applicable to disposal operations, equivalent to EUR 0 per tonne and, from 2015, EUR 20 per tonne (see recitals 12 and 13).










(10)


The complainant argues that the price of waste treatment charged to waste producers includes any costs relating to pre-treatment and treatment (e.g. incineration or disposal), as well as the amounts of the tax that the company treating the waste is required to pay to the Walloon Region. Renewi is thus allegedly able to offer producers of fluff (5) a particularly attractive price for disposal of their waste in the landfill compared to the price charged by competitors in other landfills or incinerators. In addition, the complainant states that the decisions of the Walloon Minister for the Environment recording the recovery registrations and granting the relevant certificates were adopted on the basis of discretionary powers.




2.2.   Applicable national tax legislation







(11)


The tax on waste disposal in landfills is governed by the Tax Decree of 22 March 2007 (6) on encouraging the prevention and recovery of waste in the Walloon Region, which entered into force on 1 January 2008.










(12)


The 2007 Tax Decree provides for higher rates of taxation for treatment methods that are more harmful to the environment and public health, such as waste disposal, and more favourable rates for less harmful treatment methods, such as waste recovery.










(13)


Article 6(1)(11), of the 2007 Tax Decree provides for a tax rate of EUR 0 per tonne (7) for ‘recoverable waste used in landfills as substitutes for products or equipment necessary for the operation and restoration of the landfill, in accordance with the operating permit or the environmental permit’. The standard tax rates applicable to non-recoverable waste gradually increased from EUR 35 per tonne to EUR 100 per tonne between 2007 and 2017 (8).










(14)


By Decree of 19 June 2015 (9), the rate of EUR 0 per tonne applicable to recovery operations was replaced by a rate of EUR 20 per tonne.




2.3.   Applicable Walloon environmental legislation







(15)


In Wallonia, waste management is governed by the Waste Decree of 27 June 1996. Its objective is to protect the environment and human health from any adverse impacts of waste. Article 1 of the Decree establishes the principle of a waste hierarchy in the Walloon legal order.










(16)


On the basis of the 1996 Waste Decree, the Walloon Region adopted the Order of 14 June 2001 on encouraging the recovery of certain waste (10) (‘the Waste Recovery Order’). Annex 1 to that Order contains a list of waste regarded a priori as recoverable. The Annex specifies the material to be recovered, whether or not its use is subject to a certificate, as well as the circumstances in which the waste is recovered, the characteristics of the waste and the method(s) of recovery.










(17)


By Decree of 10 May 2012 (11), the Walloon Region transposed Directive 2008/98/EC of the European Parliament and of the Council (12) on waste (‘the Waste Directive’). The Decree defines ‘disposal’ as any operation which is not recovery, even where the operation has as a secondary consequence the reclamation of substances or energy. ‘Recovery’, meanwhile, is defined as any operation the principal result of which is waste serving a useful purpose by replacing other materials which would otherwise have been used to fulfil a particular function, or waste being prepared to fulfil that function, in the plant or in the wider economy.










(18)


Article 13 of the Waste Recovery Order provides that other non-hazardous waste, which was not considered to be recoverable when the Order was adopted, may be recovered, provided the ministerial authorisation decision specifies the production circumstances, the characteristics and method of use of that waste and, where appropriate, a certificate of use. The Article provides for the rejection of any application related to the recovery of hazardous waste.




2.4.   Applicable European environmental legislation

2.4.1.   Concepts of disposal and recovery in European law







(19)


The concepts of ‘waste disposal’, ‘recovery’ and ‘material recovery’ are defined in the Waste Directive.










(20)


‘Recovery’ means ‘any operation the principal result of which is waste serving a useful purpose by replacing other materials which would otherwise have been used to fulfil a particular function, or waste being prepared to fulfil that function, in the plant or in the wider economy’ (13).










(21)


The Waste Directive defines ‘material recovery’ as follows: ‘any recovery operation, other than energy recovery and the reprocessing into materials that are to be used as fuels or other means to generate energy. It includes, inter alia, preparing for re-use, recycling and backfilling’ (14).










(22)


‘Backfilling’ is defined as ‘any recovery operation where suitable non-hazardous waste is used for purposes of reclamation in excavated areas or for engineering purposes in landscaping. Waste used for backfilling must substitute non-waste materials, be suitable for the aforementioned purposes, and be limited to the amount strictly necessary to achieve those purposes’ (15).










(23)


‘Disposal’ is defined as ‘any operation which is not recovery even where the operation has as a secondary consequence the reclamation of substances or energy’ (16).










(24)


The waste hierarchy laid down in the Waste Directive has been transposed by the Decree of 10 May 2012 (17), which defines it as follows:

                                 ‘The following waste hierarchy shall apply in order of priority in Walloon legislation, regulations and policy on waste prevention and management:






1.


prevention;










2.


preparing for re-use;










3.


recycling;










4.


other recovery, e.g. energy recovery; and










5.


disposal (18).’














(25)


Council Directive 1999/31/EC (19) (‘the Landfill Directive’) defines inert waste as follows: ‘waste that does not undergo any significant physical, chemical or biological transformations. Inert waste will not dissolve, burn or otherwise physically or chemically react, biodegrade or adversely affect other matter with which it comes into contact in a way likely to give rise to environmental pollution or harm human health. The total leachability and pollutant content of the waste and the ecotoxicity of the leachate must be insignificant, and in particular not endanger the quality of surface water and/or groundwater’ (20).










(26)


The Landfill Directive also recognises that non-hazardous waste is appropriate for redevelopment or restoration works: ‘the recovery, in accordance with Directive 75/442/EEC, of inert or non-hazardous waste which is suitable, through their use in redevelopment/restoration and filling-in work, or for construction purposes may not constitute a landfilling activity’ (21).




2.4.2.   Classification as a waste recovery operation







(27)


According to the case-law of the Court of Justice of the European Union (‘the Court of Justice’) (22), two cumulative conditions must be met for an operation to be classified as a recovery operation within the meaning of the Waste Directive:






(1)


The principal objective of the operation is to ensure that waste materials serve a useful purpose by replacing other materials which would have been used for that purpose, thereby encouraging the conservation of natural resources (conservation condition) (23);










(2)


the waste used is suitable for this purpose (suitability condition) (24).








2.4.3.   Conservation condition







(28)


According to the Court of Justice, the essential characteristic of a waste recovery operation is that its principal objective is that the waste serve a useful purpose in replacing other materials which would have had to be used for that purpose, thereby conserving natural resources (25).










(29)


As pointed out by the Court, it follows that the primary objective of the recovery operation must be the conservation of natural resources. Conversely, if the conservation of natural resources constitutes only a secondary effect of an operation the principal objective of which is the disposal of waste, this cannot affect the classification of that operation as a disposal operation (26).










(30)


It is therefore necessary to determine whether the operation in question would have taken place even if such waste had not been available and, accordingly, other materials would have had to be used (27).




2.4.4.   Suitability condition







(31)


The Court of Justice has held that an operation can be classified as recovery only if, in the light of the most recent scientific and technical knowledge, the waste used is suitable for that purpose (28).










(32)


According to the Landfill Directive, inert waste is suitable for redevelopment or restoration work (29). Recital 15 of that Directive also recognises that non-hazardous waste is appropriate for redevelopment or restoration work: ‘the recovery, in accordance with Directive 75/442/EEC, of inert or non-hazardous waste which is suitable, through their use in redevelopment/restoration and filling-in work, or for construction purposes may not constitute a landfilling activity’.










(33)


Article 3(17a) of the Waste Directive also confirms that backfilling operations are carried out using suitable non-hazardous waste (see recital 22).




2.5.   Description of the grounds for initiating the procedure







(34)


On the basis of the information available when the procedure was initiated, the Commission considered that the measure at issue, namely the application, in the context of Renewi’s activities in the Mont-Saint-Guibert landfill, of the reduced rate for recovery operations instead of the full rate applicable to disposal operations since February 2009 (see recitals 49, 50 and 51), raised doubts as to its classification as State aid and its compatibility with the internal market.










(35)


In its opening decision, the Commission expressed doubts as to the appropriateness of the classification of the landfill operation by the Belgian authorities as a recovery operation with reference to the case-law of the Court of Justice established in Case C-147/15. On the basis of the information available at the time, it was not possible to demonstrate that conserving natural resources was the primary objective of the operation in this case. In particular, given that the creation of the dome using materials other than waste did not appear to have been envisaged, it could not be argued that the waste would usefully replace other materials. Only fluff appeared to be suitable and available in sufficient quantities, given the scientifically defined technical characteristics that the materials had to display (mainly their light, inert and non-biodegradable nature) and the quantities required within a relatively short period of time (around 80 000 tonnes over a few years).










(36)


Moreover, the information available at the time of the launch of the procedure led the Commission to believe that, from the point of view of compliance with the waste hierarchy, fluff was more suitable for incineration and energy production.










(37)


In the light of that information, the Commission concluded that the application to landfilling of the reduced rate applicable to recovery operations could constitute a selective advantage. The Commission thus considered that Renewi appeared to have been relieved of a tax burden which that company would normally have had to bear if its activities had been treated as waste disposal rather than waste recovery. In addition, the Commission considered that the other criteria referred to in Article 107(1) TFEU appeared to be met.










(38)


The measure at issue was therefore liable to constitute State aid.










(39)


As the measure at issue was implemented before being notified to the Commission, the Walloon authorities may have failed to meet their obligations under Article 108(3) TFEU.










(40)


As regards the compatibility of the aid allegedly granted, the Commission expressed doubts as to whether the application of the reduced rate to the operations carried out by Renewi in the Mont-Saint-Guibert landfill instead of the rate applicable to disposal operations in landfills could (i) constitute compensation for a public service obligation compatible with Article 106(2) TFEU, or (ii) be declared compatible with the 2008 (30) or 2014 (31) Guidelines on State aid for environmental protection.










(41)


In the light of the information in its possession at the time, and as it was impossible to confirm whether the alleged aid was compatible with the internal market, the Commission decided to launch the formal investigation procedure.




3.   COMMENTS BY THE WALLOON REGION







(42)


With regard to the alleged classification of the measure as State aid, the Walloon Region considers that the conditions of advantage and selectivity are not met. It considers that the operation was correctly classified as recovery in accordance with the conditions laid down in the applicable EU and Walloon legislation. Indeed, the operations would have been carried out even in the absence of suitable waste in sufficient quantities (see Section 3.1); other materials would then have been used (see Section 3.3); and the waste used was suitable for the purpose (see Section 3.2).










(43)


According to the Walloon Region, the absence of selectivity stems from general tax provisions, which apply indiscriminately to any undertaking according to the classification of the type of use of the waste. The classification of an operation as recovery or disposal is done in a non-discretionary manner, since the decision of the Minister for the Environment is part of a formal procedure, and it is based on an in-depth analysis by the Walloon administration of the documents and information provided by the applicant for registration for waste recovery.




3.1.   The legal obligation to close and restore the Mont-Saint-Guibert landfill







(44)


In its additional observations of 17 December 2020, the Walloon Region points out that, under the Order of 27 February 2003 on the sectoral operating conditions of landfills (‘the Sectoral Conditions Order’) (32), all landfill operators in the Walloon Region, without exception, are subject to the obligation to shape their sites like a dome in order to ensure a minimum slope gradient of 3 % after settlement and to enable the gravity flow of stormwater runoff to the ditches beyond the landfill.










(45)


Since 2004, the Mont-Saint-Guibert landfill has been managed on the basis of a single permit dated 10 May 2004 (‘the single permit’), granted by the Walloon Region and valid until 20 November 2014 (as an operating permit).










(46)


The Mont Saint Guibert landfill is divided into a number of sectors.










(47)


When issuing the single permit, the Walloon Minister for the Environment:






—


required the complete restoration of sector 1 through recovery operations, on the basis of a detailed study of the materials or waste to be processed in order to establish suitable profiles, and ensuring optimal connection with sectors 2 to 8 of the landfill;










—


authorised Renewi to operate sectors 2 to 8 of the landfill;










—


required Renewi to use waste recovery if the target height of 161 metres after settlement was not reached throughout the landfill.














(48)


With a view to the closure of the site on 21 November 2014, work began on restoration (to shape the landfill like a dome) and capping (33) (from February 2009 for sector 1, and from November 2011 for sectors 2 to 8). The Region points out that preparing for the closure of a landfill in order to allow for a more efficient restoration process, while continuing disposal operations in parallel, is very common in the waste management sector. During the period of operation of a landfill, some sectors of the landfill which are no longer open for disposal operations are prepared for restoration operations at the same time as other sectors of the landfill continue to be used. These restoration operations required recovery certificates authorising Renewi to use certain types of recoverable waste not listed in Annex 1 to the Waste Recovery Order. All the registrations and certificates confirm the main objective of the operations in question and specify that the recovery of fluff forms part of the process of redeveloping and restoring the Mont-Saint-Guibert landfill.










(49)


Since waste recovery in connection with the closure of the site was imposed on Renewi by the specific conditions of the single permit, the company applied for registration, which it obtained on 30 November 2005 along with the related recovery certificate No 2005/13/73/3/4 for the refilling of sector 1. The recovery certificate states that the waste authorised for recovery must have a ‘suitable density so as to prevent excessive settlement in the mass of the waste and ensure stable slopes to allow stormwater run-off’. The waste concerned had to be ‘non-hazardous and inert waste falling under codes 170107 – treated mixture of concrete, brick, tiles and ceramics, 170795 – treated demolition waste, 191204 – crushed tyres and rubber slats, 191212 – non-biodegradable fluff and 200307 – crushed bulky waste’.










(50)


In the end, however, the registration and the certificate, valid for 3 years, were never put to use, since the preparatory work required to carry out the recovery operations in sector 1 was not completed until December 2008.










(51)


Thus, recovery operations could only begin in sector 1 in February 2009, as demonstrated by a letter dated 3 August 2009 in which Renewi applied to the Walloon Waste Authority (Office wallon des déchets) for a new registration and a new certificate of use. It was on the basis of the registration and the certificate of use, obtained on 18 December 2008, that recovery operations in sector 1 could begin. This new registration and this new certificate of use, valid until 31 December 2009, authorised recovery operations for the same waste as before (see recital 49), for the purpose of refilling sector 1. Renewi was thus not able to benefit from the reduced tax rate for operations classified as recovery until February 2009.










(52)


In view of the delay in the restoration and redevelopment work in sector 1, the registration and the certificate had to be extended again on 10 November 2009, for 3 years, by registration and certificate No 2009/13/73/3/4, valid until 31 December 2011. On the same day, a new registration and a new certificate No 2009/13/114/3/4 (valid until 31 December 2011) were issued, authorising Renewi to recover, in addition to ‘non-hazardous and inert waste falling under codes 170107 – treated mixture of concrete, brick, tiles and ceramics, 170795 – treated demolition waste, 191204 – crushed tyres and rubber slats, 191212 – non-biodegradable fluff and 200307 – crushed bulky waste’, combustible fluff falling under code 191210.










(53)


Both combustible fluff and non-biodegradable fluff belong to categories 191210 – ‘combustible waste (waste derived fuel)’ and 191212 – ‘other waste (including mixtures) from the mechanical treatment of waste other than [waste containing hazardous substances]’ described in Walloon Government Order of 10 July 1997 (34) establishing a waste classification. These two categories – 191210 and 191212 – are considered non-hazardous waste in this Order.










(54)


According to the Order establishing a waste classification, combustible fluff and non-biodegradable fluff both belong to the category ‘non-biodegradable waste compatible with biodegradable organic waste in the context of deposits in landfills’, provided they are not liable to react with biodegradable organic waste or undermine the effectiveness of the recovery of gases (35). The Walloon Region explains that the term ‘combustible’ stems solely from the fact that this new type of waste had to be classified under one of the existing types of waste listed in the Walloon legislation and that, in view of its calorific value, it made sense to class this type of fluff with waste falling under code 191210 – ‘combustible waste (fuel from waste)’. The term ‘combustible’ only means that this type of fluff has a certain net calorific value (‘NCV’) and not that this NCV is suitable specifically for incineration operations, whether in incinerators or in cement kilns. In order to be accepted in the majority of incinerators, the waste must have an NCV of approximately 10 000-12 000 kJ/kg or a maximum, in small quantities, of 13 000 kJ/kg. Burning waste with a higher NCV results in excessive degradation of the kilns. However, the fluff used for recovery operations in the Mont-Saint-Guibert landfill has an NCV of 14 100 kJ/kg (36).










(55)


According to the information provided by the Walloon Region, of the waste for which Renewi obtained recovery certificates, only non-biodegradable fluff and crushed bulky waste were actually used for recovery purposes in sector 1 from February 2009. Combustible fluff was only used from 2010 onwards.










(56)


Between February 2009 and December 2009 crushed bulky waste (37) was used in the landfill in limited quantities (38). Bulky waste was prohibited from entering the landfill from 1 January 2010 under the Walloon Government Order prohibiting the placing of certain waste in landfills (39).










(57)


As regards sectors 2 to 8, the single permit granted to Renewi authorised the shaping of the landfill like a dome with a maximum height before settlement of 167 m and a final height, after settlement, of 161 metres above sea level. At the end of operations, the slope gradient of the dome after settlement had to be between 3 % and 14 % (40).










(58)


The single permit provides that where the target height of 161 metres is not achieved, the operator must top up the landfill using materials meeting the circumstances and characteristics of recovery operations laid down in the Order on encouraging the recovery of certain waste, so that this height is achieved without fail.










(59)


During the operation of the landfill, successive bans on the disposal of certain waste in landfills were adopted in the Walloon Region by the Walloon Government Order prohibiting the placing of certain waste in landfills (41).










(60)


That Order thus prohibits the deposit in landfills of certain types of waste, in particular certain hazardous waste, as well as whole used tyres, separately collected waste and metal waste.










(61)


These successive bans reduced the quantities of waste disposed of in the Mont-Saint-Guibert landfill, forcing Renewi to adapt to a constantly changing market, where the amount of waste available for disposal continued to decrease. According to the Walloon Region, a reduction of 212 000 tonnes in the quantities of waste disposed of was recorded between 2009 and 2010.










(62)


Each year from 2004, Renewi therefore had to look for alternative ways to obtain different waste streams in order to achieve the final profile imposed on it by the single permit, pursuant to the Sectoral Conditions Order (42). In 2013 and 2014, for example, Renewi managed to obtain a significant amount of waste fibreglass materials and waste from the destruction of car wrecks and scrap for disposal in the Mont-Saint-Guibert landfill.










(63)


The Walloon Region also highlights the particular hydrogeological context of the site, which is characterised by a high degree of vulnerability, given the significant risk of deterioration in groundwater quality caused by the infiltration of leachate, which seriously jeopardises the possibilities of using that water for the production of drinking water. This difficult context led to the establishment of a Scientific Committee tasked with making recommendations to the authorities when they take decisions concerning the Mont-Saint-Guibert landfill.










(64)


The Walloon Region points out that a renewal of the operating permit for the Mont-Saint-Guibert landfill was not possible in view of the environmental problems identified. Nor was it possible to reduce the quantities of waste that had to enter the landfill in order to comply with the minimum slope gradient requirements imposed by Walloon legislation.










(65)


As the Walloon Region points out, it was necessary to start planning the closure of the site already in 2011, in order to ensure its actual closure by 21 November 2014. From that point on, the Scientific Committee paid particular attention to the need to define the final profile in such a way as to achieve slopes in the landfill that would prevent differential settlement causing the stagnation of the surface water that should flow to the drainage ditches. With the same objective in mind, the Scientific Committee imposed the use of waste that was ‘as lightweight as possible’ in the restoration of the site to avoid excessive differential settlement.










(66)


The Walloon Region points out that, when the decision was taken at the beginning of 2011 to close the site, the profile of the landfill after settlement had a slope gradient of less than 3 % in some places and therefore did not comply with the requirements of Article 16, fifth subparagraph, of the Sectoral Conditions Order. This profile therefore had to be remodelled in order to respect the minimum slope gradient constraint of 3 %. The models developed by the Scientific Committee, presented in its opinion of 11 March 2011, made it possible to calculate the minimum volumes of waste needed to ensure that (i) the dome had average slopes with a gradient of at least 3 % after settlement throughout the site, and (ii) average slopes with a gradient of maximum 14 % throughout the site in order to ensure the stability of the waste mass. The final volume of waste required before proceeding with the closure of the landfill was thus reduced by 76 401 m3.










(67)


On 28 June 2011, following the decision to close the site, in accordance with the conditions laid down in the single permit and on the basis of the recommendations made by the Scientific Committee in its report of 11 March 2011, Renewi submitted an application for registration for the recovery of non-hazardous waste of types 191210 – combustible fluff and 191212 – non-biodegradable fluff for recovery in the context of the closure of the entire Mont-Saint-Guibert landfill.










(68)


Based on the opinions of the Scientific Committee and in compliance with the conditions contained in the single permit, following on from the closure procedure which had already begun for sector 1, on 4 November 2011 the Minister for the Environment issued Renewi with registration No 2011/13/132/3/4 and the related recovery certificate, authorising the recovery of fluff for a period of 5 years, as part of the closure of the entire Mont-Saint-Guibert landfill. Thus, the new registration and the new certificate authorised the recovery of combustible fluff and non-biodegradable fluff as part of the closure of the entire landfill, including sector 1, which was then integrated into the general process of closing the landfill.










(69)


This registration and certificate of use, initially relating to the shaping of the site like a dome, were renewed by a decision dated 18 August 2015 (registration and certificate of use No 2015/13/223/3/4). That certificate was valid until 18 August 2020, the period of validity being justified, according to the Walloon Region, by the considerable quantities of materials required to complete the dome (in accordance with the certificate of use, Renewi was allowed to recover up to 400 000 tonnes of fluff). The ‘dome’ was completed in November 2019, before the expiry of the user certificate.










(70)


Both registration No 2011/13/132/3/4 and the related recovery certificate and registration No 2015/13/223/3/4 and the related certificate of use enabled the redevelopment of the landfill in accordance with the single permit (with a view to avoiding excessive settlement in the mass of waste and ensuring sufficiently stable slopes to allow natural run-off of stormwater).










(71)


The restoration phase, in the form of capping of sectors 2 to 8, started in 2020, after completion of the dome. The Walloon Region states that restoration was initially carried out using materials complying with registration No 2016/616/3/4, which expires on 26 October 2026. The waste covered by registration No 2016/616/3/4 corresponds to the waste listed in Annex 1 to the Waste Recovery Order.










(72)


In its observations of 3 May 2021, the Walloon Region reiterates its view that the operations in question would have been carried out even if the waste had not been used, because of the legal obligation to close and restore the landfill.




3.2.   Fluff as the main type of waste suitable for the restoration operation and crushed bulky waste







(73)


The Walloon Region also confirms that, on the basis of a study carried out by the consultancy firm Greisch and submitted on 31 October 2002 (‘the Greisch study’) (43), well before the closure of the landfill, it was decided to use waste for restoration operations ‘to avoid bringing such a large quantity of ‘high-grade’ materials into a landfill’. The Greisch study stated that the waste should ‘ideally be available in large quantities (100 000 m3), easy to process, lightweight, waterproof and rot-proof’.










(74)


The decision to use waste instead of primary materials, such as lava rock, was subsequently included in the single permit.










(75)


As the single permit required recovery operations to be carried out with a view to the closure of sector 1, the Scientific Committee adopted an opinion on 23 June 2005 determining the technical qualities necessary for the materials to be used to refill sector 1. This opinion was reissued on 28 March 2006.










(76)


Recovery certificate No 2005/13/73/3/4 requested by Renewi states that the waste authorised for recovery must have a ‘suitable density so as to prevent excessive settlement in the mass of the waste and ensure stable slopes to allow stormwater run-off’. Non-biodegradable fluff had these characteristics (see recital 49). The certificate of use dated 18 December 2008 and the subsequent certificates (see recitals 51 and 52) also authorised the use of fluff (non-biodegradable and combustible) on the grounds that it had the technical characteristics suitable for the closure of sector 1.










(77)


In December 2009, a technical note on ‘The restoration of sector 1’ issued by the Scientific Committee states that the waste to be used in the restoration of sector 1 must be fluff (i.e. plastic waste, light fraction from sorting and pre-treatment of waste).










(78)


On 11 March 2011, the Scientific Committee set out in an opinion the preliminary technical considerations relating to the revision of the landfill slopes and profiles required to avoid subsidence, which had been established on the basis of precise topographical surveys carried out at the end of 2010. On this basis, the document goes on to explain that the materials had to be of low density, non-biodegradable and rot-proof (to avoid subsidence) and permeable (to allow the passage of water and gases). The relevant extract is reproduced below:

                              ‘Three characteristics must be emphasised:






(1)


Density. In the corrected profile of the landfill, 51 % of the surface area already reached the final rating ‘BEFORE settlement’. In some places, settlement has already been taking place for some time. The new materials to be added will also compact over time. At present, it is therefore considered suitable to add materials that are as lightweight as possible, such as recovery materials, in order to limit subsidence. The use of other, heavier materials, such as waste from remediation works, cannot be excluded. It should, however, be borne in mind that such materials will result in increased subsidence.










(2)


Dimensional stability. At the current stage of filling of the landfill, non-biodegradable materials should be used in order to avoid another kind of subsidence resulting from a reduction in volume.










(3)


Permeability. The materials used should result in a waste mass that allows the passage of water and biogases.’














(79)


In view of these technical characteristics, and in accordance with the successive opinions of the Scientific Committee reflecting the obligations contained in the single permit, fluff was identified in the opinion as the main type of waste suitable for the operation. The Walloon Region also mentions that it was the technical characteristics, objectively established in the light of the environmental issues, that led to the selection of the type of waste to be used and not the other way around (i.e. the fluff was not first selected and its specific characteristics then used as the basis for defining the technical characteristics).










(80)


The Walloon Region states that, with a view to preserving resources, it was decided from the start of the landfill closure process to pre-treat waste in order to give it a useful function. However, as no waste or material ready for immediate use was available, it was necessary to produce or pre-treat existing materials/waste in order to use them for useful purposes.










(81)


The fluff was thus created and adapted specifically for the restoration of the Mont-Saint-Guibert site.










(82)


The Walloon Region also points out that the use of fluff was carefully analysed in accordance with the waste recovery procedure laid down in the Waste Recovery Order. The fluff at issue in this case was considered non-hazardous waste in accordance with the Order establishing a waste classification (see recital 53) and each of the registrations and certificates issued to Renewi. The non-hazardous nature of the waste was considered a prerequisite for the waste to be considered suitable for recovery operations. Thus, Article 13(1) of the Waste Recovery Order provides that ‘[t]he Minister may support the recovery of non-hazardous waste that is not listed in Annex I and the recovery of non-hazardous waste other than that provided for in Annex I to this decree for any person who submits an application for registration in accordance with the procedure set out in this Order […]’.










(83)


According to the Walloon Region, fluff has several characteristics in common with inert waste. Thus, the Walloon Region classifies it as ‘non-biodegradable waste compatible with biodegradable organic waste in the context of deposits in landfills’, as it is not liable to react with biodegradable organic waste or undermine the effectiveness of the recovery of gases (see recital 54). According to the Walloon Region, the latter characteristic of fluff is similar to the definition of inert waste, since that characteristic also concerns waste which ‘does not produce any other physical or chemical reaction, is not biodegradable and does not adversely affect other matter with which it comes into contact in a way likely to give rise to environmental pollution or harm human health.’ (44).










(84)


The Walloon Region also points out that, in accordance with Article 23 of the Waste Directive, any establishment incinerating waste in order to recover energy must ensure that the recovery operations are carried out with a ‘high level of energy efficiency’. In this respect, the Walloon authorities point out that the calorific value of fluff is too high (14 000 kJ/kg, whereas waste-derived fuels have a calorific value of between 10,5 and 11,5 kJ/kg) for it to be burned in incinerators and cement kilns, so it would have been impossible to burn it for energy recovery purposes. The Walloon Region also maintains that the waste hierarchy does not impose any order of priority between energy recovery operations and material recovery operations.










(85)


As regards the crushed bulky waste used in the period from February 2009 to December 2009, the Walloon Region states that it had all the necessary technical characteristics, since it has a low density (0,6 tonnes/m3 after compacting), is non-biodegradable and rot-proof (preventing subsidence and presenting no risk of causing waste degradation reactions), is permeable (allowing the passage of water and gases) and could be supplied and crushed in sufficient quantities. Crushed bulky waste was therefore considered technically suitable.




3.3.   Other materials available at the time of the operation







(86)


According to the Walloon Region, the decision to use waste instead of primary materials in order to preserve natural resources does not, however, mean that there were no real alternatives to the use of waste for the restoration of the site. The existence of alternative solutions thus makes it possible to determine whether or not fluff and crushed bulky waste were used for useful purposes, and whether the restoration of the site would have taken place in any event, regardless of the availability of suitable waste in sufficient quantities.










(87)


The Walloon Region explains in its observations of 3 May 2021 that, since suitable waste (in terms of density, non-biodegradability, resistance to rot and permeability) was available in sufficient quantities for the restoration of the landfill during the entire period (mainly fluff and crushed bulky waste), the Walloon Region did not have to address the question of which raw materials to use as an alternative to waste. However, the Walloon Region states that if such a question had arisen, alternative materials would have been available in sufficient quantities for the restoration of the landfill as a whole from the start of the restoration works in February 2009. The Walloon Region considers that, in the present case, Argex (a primary material consisting of light grains of expanded clay, produced from natural raw clay which is then processed) and various types of foam (polyurethane foam, expanded polystyrene blocks or filler foams) were, in view of their technical characteristics, perfectly suitable for the restoration of the landfill, including the creation of the dome. These materials were also available in sufficient quantities on the market. As regards Argex in particular, the Walloon Region states that Belgium has a significant production capacity in the Antwerp region of approximately 450 000 m3 per year. In view of the quantities required for the restoration of the landfill (estimated in 2003 at around 100 000 m3 per year, reduced to 80 000 m3 and then to 70 000 m3 at the end of the works), the Region considers that Renewi could have used this material instead of fluff for the restoration and closure of the site.










(88)


Furthermore, the Walloon Region explains that another alternative primary material, namely lava rocks (pozzolana), would also have been suitable and available in sufficient quantities (45) as a natural stone for the restoration of the landfill. According to the Region, pozzolana is a material similar to Argex that is often used for similar purposes (e.g. building construction, garden works, backfilling).










(89)


The Region claims that, given their technical characteristics, lava rocks (pozzolana) comply with the specific requirements for the restoration of the landfill (in particular their low density, non-biodegradability, resistance to rot and permeability) and could have been an alternative to the use of fluff if that had not been available in sufficient quantities. In addition, the Region claims that lava rocks could have been used as an alternative to crushed bulky waste for the operations in the landfill, if the latter had not been available in sufficient quantities.




4.   COMMENTS BY RENEWI







(90)


According to Renewi, the conditions for classing a measure as State aid, namely, the existence of an advantage and the selective nature of the measure, are not present in this case.










(91)


As regards the first point, Renewi considers that the application of the reduced tax rate provided for by the Walloon legislation for recovery operations cannot constitute an undue reduction of its tax burden, in that the use of fluff in order to close the site corresponds to the recovery criteria laid down by EU and Walloon legislation (see Section 4.1). Renewi thus points out that fluff has the technical characteristics required for this type of operation, and that using this type of waste has made it possible to avoid using primary materials, with a view to preserving natural resources (see Section 4.3).










(92)


As regards the absence of selectivity, Renewi considers that the registrations and recovery certificates granted to it were not granted in a discretionary way but were awarded following checks that the operation in question was compliant with the definition of ‘recovery’ contained in the tax decree. Renewi further notes that the application of different rates of taxation for recovery and disposal operations was part of a general scheme that is valid for all companies meeting the criteria for the different types of operation (see Section 4.2).




4.1.   Operation of the landfill and closure decision







(93)


In its comments, Renewi states that it submitted an application for a single permit in 2003 with the aim of shaping the landfill with slope gradients of at least 3 % after settling to allow the site to be restored following closure by ensuring the collection of stormwater and biogas. That application resulted in the issue of the permit of 18 December 2003, replaced by the ministerial order of 10 May 2004 laying down the conditions for the operation and closure of the Mont-Saint-Guibert landfill.










(94)


Renewi has obtained several related registrations and recovery certificates since 30 November 2005 (see recitals 49to 52) for the recovery of fluff and crushed bulky waste.










(95)


Renewi explains that from the start of the operation of the landfill, authorised by the single permit in 2004, the quantities of waste disposed of in the Mont-Saint-Guibert landfill have been significantly reduced as a result of the successive bans on the disposal of certain waste in landfill by the Walloon Government decree of 18 March 2004 (46). This has resulted in a reduction in the quantities of waste disposed of, from 223 000 tonnes in 2009 to around 11 000 tonnes in 2010, in particular as a result of the ban on depositing crushed bulky household waste and biodegradable organic waste in landfill as from 1 January 2010 (47). This ban is a consequence of the transposition of the Directive on the landfill of waste.










(96)


In view of the reduction in the amount of waste that could be disposed of in the landfill, it became apparent that filling it (by November 2014) could no longer be ensured within the period initially envisaged by the single permit (48). It was decided, following a consultation process carried out in late 2010 and early 2011, to end operations at the landfill by the scheduled deadline and to proceed with the closure procedure referred to in Article 18(5), in accordance with the specific conditions of the single permit.










(97)


In addition, Renewi stresses that, prior to the decision to end operations at the landfill, the Scientific Committee was asked to examine whether it was possible to reduce the volume of waste that was required upon closure of the landfill, in order to be able to close the landfill as it stood. However, according to Renewi, in a report of 11 March 2011, the Scientific Committee estimated that the residual amount of waste remaining to be processed at the end of 2010 could be reduced by only 76 401 m3. The report justified this calculation on the basis of the difficulty of changing the profile of the Mont-Saint-Guibert landfill, given that its final surface area, defined in 2003, was already as close as possible to the requirements for meeting the minimum (3 %) and maximum (14 %) gradient criteria.










(98)


Taking into account the waste flows Renewi had indicated that it could process on the one hand, and studies on the type of material to be used for the closure of the site and the provisions of the single permit on the other hand, the Scientific Committee considered in its opinion of 11 March 2011 that the waste that could be put in place during the closure procedure with a view to restoring the site was primarily fluff.










(99)


Based on the opinions of the Scientific Committee and in compliance with the conditions contained in the single permit, following on from the closure procedure which had already begun for sector 1, on 4 November 2011 the Minister for the Environment issued Renewi with registration No 2011/13/132/3/4 and the related recovery certificate, authorising the recovery of fluff for a period of 5 years, as part of the closure of the entire Mont-Saint-Guibert landfill.










(100)


On 6 December 2013, the Scientific Committee repeated its 2011 opinion, insisting that, ‘the only acceptable technical solution is the closure of the landfill using a material with identical technical characteristics – particularly in terms of density – as fluff. Any alternative solution would involve postponing the closure of the landfill for a protracted period, and also prolonging the aftercare phase’. In the light of that opinion of the Scientific Committee, a new registration and certificate of use No 2015/13/223/3/4 were issued on 18 August 2015 for 5 years.










(101)


Renewi stresses that the certificates of use all required that quality tests be carried out to check compliance with these requirements. In this way, the compliance of the fluff with the requirements of the registrations and recovery certificates was subject to verification. Renewi therefore contests the argument put forward by the Commission in its opening decision that the registrations and certificates do not allow checks to be carried out of what constitutes fluff and what characteristics it is required to have.




4.2.   Correct application of the Tax Decree and the Recovery Order by the Minister







(102)


Renewi states that the Tax Decree provides for a reduced tax rate applicable to waste recovery operations in landfill for any waste treatment company carrying out such operations.










(103)


Article 6(1)(12) (formerly 6(1)(11)) of the Tax Decree provides that a rate of EUR 0/tonne, for the period 2005 to 2015, and EUR 20/tonne, for the period from 2015 onwards, is applicable to ‘the use of recoverable waste in landfill as substitutes for products or equipment necessary for the operation and restoration of the landfill, including aftercare, in compliance with the operating permit or the environmental permit’.










(104)


According to Renewi, that article lays down a series of objective and pre-defined criteria according to which any company that (1) uses recoverable waste in landfill (2) as a replacement for products or equipment (3) necessary for the operation and restoration of the landfill, including aftercare (4) in compliance with the landfill’s operating permit or environmental permit, may benefit from the reduced tax rate applicable to recovery operations. Annex 1 to the Recovery Order sets out a list of waste automatically regarded as recoverable. Renewi emphasises, however, that Annex 1 is not exhaustive since it is impossible, a priori, to draw up an exhaustive list of all waste that could be recoverable. Renewi further submits that Article 13 of the Recovery Order provides for the possibility for the Minister to authorise, by means of registrations and certificates, the recovery of other non-hazardous waste not listed in Annex 1. According to Renewi, this waste, authorised by the Minister, can therefore be considered as ‘recoverable’ within the meaning of Article 6(1)(12) (formerly 11) of the 2007 Tax Decree.










(105)


Renewi points out that when the registrations and certificates are issued, the Minister’s decision is circumscribed by the various decrees and orders applicable and by a series of decisions and analyses carried out previously that strictly limit their decision-making power.










(106)


Renewi therefore points out that the Minister had to check that the conditions set out in Articles 3 and 6 of the Recovery Order had been complied with. Her decision was taken pursuant to Article 13 of the Recovery Order, which provides that ‘The Minister may support the recovery of non-hazardous waste that is not listed in Annex I and the recovery of non-hazardous waste other than that provided for in Annex I to this decree for any person who submits an application for registration in accordance with the procedure set out in this decree. This registration is exempt from the authorisation referred to in Article 11(1) of the decree of 27 June 1996 on waste’.










(107)


In this connection, Renewi points out that the Commission, in its Notice on the notion of State aid (49), considers that ‘the fact that a tax relief requires prior administrative authorisation does not automatically mean that it constitutes a selective measure. This is not the case where a prior administrative authorisation is based on objective, non-discriminatory criteria which are known in advance, thus circumscribing the exercise of the public administrations’ discretion. Such a prior administrative authorisation scheme must also be based on a procedural system which is easily accessible and capable of ensuring that a request for authorisation will be dealt with objectively and impartially within a reasonable time and refusals to grant authorisation must also be capable of being challenged in judicial or quasi-judicial proceedings’.










(108)


Insofar as, in adopting that decision, the Minister was bound by the various rules applicable under Walloon law and had discretion only as regards the type of waste authorised for recovery, and as this discretion was circumscribed by pre-defined, objective and non-discriminatory scientific studies and criteria, the need to obtain administrative authorisation in order to benefit from the tax rate applicable to recovery operations did not mean that the authorisation measures were selective.










(109)


Renewi also points out that it had to submit applications to the Minister accompanied by ‘all the documents required to ascertain the production circumstances, the characteristics of the waste and the methods of use concerned’. The submission of these applications, like all applications for authorisation for the Mont-Saint-Guibert site, was guided by the opinions of the Scientific Committee, composed of independent experts. Specifically, these opinions provide a framework for applications for authorisation and granting decisions by the Minister in order to ensure that they comply as closely as possible with the results of the impact and environmental assessments carried out, in view of the geotechnical difficulties presented by the site. It was therefore always on the basis of these various sources of information, and specifically the opinions of the Scientific Committee of 23 June 2005, 28 March 2006, 11 March 2011 and 6 December 2013, provided in the application files, that the Minister issued the registrations and recovery certificates.










(110)


Furthermore, those authorisation decisions all contain a ‘User Manual’ describing the production circumstances, characteristics and methods of use of the waste authorised for recovery. Finally, all certificates of use provide that quality tests on the waste authorised for recovery must be carried out in order to verify compliance with the required characteristics.










(111)


Renewi thus considers that the registrations and certificates were granted in compliance with the applicable rules and that the Minister had no discretionary power. Therefore, Renewi submits that the measures at issue do not constitute individual measures but rather are measures adopted pursuant to a general scheme, the selectivity of which cannot simply be presumed and must be proven.










(112)


Finally, Renewi refers to the example of BEP Environnement, which was granted registration in 2008, pursuant to Article 13 of the Recovery Order, allowing it to carry out operations for the recovery of ‘crushed, bulky, non-hazardous waste’ at its site at the Happe-Chapois landfill, with a view to carrying out the work necessary to permanently install the dome provided for in its operating permit. In view of the need for a dome of a certain height in order to obtain an average residual slope gradient of at least 3 %, and the fact that it was impossible for the operator to reach the level required during operations due to the entry into force of the Walloon Government decree of 18 March 2004 prohibiting the placing of certain waste in landfill, the Walloon Minister issued BEP Environnement with the registration required to start recovery operations with a view to the restoration of the site.




4.3.   The reasons for which Renewi mainly used fluff for the filling operation







(113)


Renewi observes that the studies carried out with a view to granting the operating permit for the Mont-Saint-Guibert landfill included the specific consideration of the possibility of using ‘high-grade materials’ for landfill operations carried out in the context of the site’s closure procedure, within the meaning of Article 13 of the Directive on the landfill of waste. However, this possibility had been discarded in order to conserve primary materials by using waste instead. According to Renewi, the possibility of creating the dome using materials other than waste had been raised, but was very quickly discarded because it was obvious that materials would be wasted as a result. Renewi considers that the aim of the operations was not to replace one type of waste with another since, once the single permit expired, waste was no longer permitted to enter the landfill for disposal. Renewi maintains that the waste recovered in the landfill replaced high-grade materials – which would have had to be used instead of waste – rather than other types of waste, which were at the time prohibited from entering the landfill site. The condition relating to the substitution of materials in order to conserve natural resources, which is considered essential to recovery operations under EU law, would clearly be fulfilled in the present case, therefore.










(114)


Renewi maintains that fluff was chosen as the main material for filling the landfill (in addition to crushed bulky waste, on a residual basis, as explained in Sections 3.1 and 3.2) by the Scientific Committee for technical reasons related to the environmental goals of the single permit, and because of its availability in sufficient quantities, its density and permeability.










(115)


As such, fluff was used to ensure that the dome had the requisite height and slope gradient. This waste had specific characteristics enabling it to meet that objective: (i) very low density (0,4 tonne/m3 at the point it was deposited in the landfill, and 0,6 tonne/m3 after settling); (ii) non-biodegradability and no risk of causing waste degradation reactions and (iii) permeability.










(116)


Renewi also points out that material recovery, recognised as a method of waste recovery in its own right, was considered in the single permit and, upstream, in the Tax Decree, as the most favourable solution for the environment in order to complete the necessary restoration of the landfill.










(117)


According to Renewi, the combustible and non-biodegradable fluff at issue was not suitable for incineration or as fuel in a cement kiln and therefore could not have been incinerated for energy production (see recital 54). As for the few other incinerators that might have been willing to accept a certain (limited) amount of fluff with such a high NCV, none of them could have been a valid alternative for reasons, for example, related to the chlorine composition of the fluff in question or due to the distance between those incinerators and the fluff production site.










(118)


Renewi also points out that fluff has an NCV that is far too low to go into a cement kiln. This is because, in order to be accepted in a cement kiln, waste must generally have an NCV of approximately 17 000-18 000 kJ/kg.










(119)


Moreover, as the fluff used at the Mont-Saint-Guibert site is not intended to be burnt in an incinerator or cement kiln, it does not undergo any pretreatment relating to its chlorine composition. However, in order to comply with the environmental obligations imposed on them – in particular as regards the amount of chlorine in the fumes released from incinerators or cement kilns – these types of facilities set maximum chlorine content levels above which waste is not accepted. These levels are generally set at around 0,8-1 %. This maximum chlorine content level can only be achieved by subjecting the waste to a specific pretreatment for this purpose. Since this is not the case for the fluff recovered at the Mont-Saint-Guibert landfill, Renewi maintains that it could not be admitted into an incinerator or cement kiln, contrary to the complainant’s allegation. Renewi therefore concludes that the fluff could not have been used for energy recovery and that there are no alternative uses for the fluff that would be more compliant with the waste hierarchy.




5.   ASSESSMENT OF THE ALLEGED AID MEASURE

5.1.   Absence of aid







(120)


Article 107(1) TFEU provides that ‘any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market.’ For a measure to be classified as aid within the meaning of Article 107(1) TFEU, all the conditions set out in that provision must be fulfilled (50).




5.1.1.   State resources and imputability







(121)


According to the case law of the Court of Justice, only advantages granted directly or indirectly through State resources can constitute State aid within the meaning of Article 107(1) TFEU. Furthermore, these advantages must be imputable to the State.










(122)


In the present case, the transfer of State resources takes the form of a loss of tax revenues insofar as the certificates of use granted, allegedly wrongly, by the Walloon authorities enabled Renewi to benefit from a reduced rate of regional tax on the deposit of waste in landfill instead of the full rate normally applicable.










(123)


It is necessary to determine whether the measure in question is imputable to the Member State.










(124)


According to case law, in order to assess whether a measure is imputable to the State, it is necessary to examine whether the public authorities were involved in the adoption of that measure (51).










(125)


It should be noted, first, that the Tax Decree is an act adopted by the Walloon authorities, as is the grant of the tax reduction. Similarly, the successive registrations for recovery and the granting to Renewi of the related certificates of use are based on a decision of the Walloon Minister for the Environment. Therefore, it must be considered that the measure at issue is imputable to the State.










(126)


In view of the above, the Commission considers that the measure is likely to have deprived the State of State resources and that the measures are imputable to the State.




5.1.2.   Absence of advantage







(127)


According to settled case law of the Court, measures which, whatever their form, are likely directly or indirectly to favour certain undertakings, or which are to be regarded as an economic advantage that the recipient undertaking would not have obtained under normal market conditions, are considered as State aid (52).










(128)


This notion of economic advantage includes reductions of the normal tax burden that affects the budget of an undertaking. On the other hand, a tax ruling does not confer any advantage if the taxpayer pays the taxes that are normally due pursuant to the correct application of the (national and international) rules at issue.










(129)


The 2007 Walloon Regional Tax Decree provides for different taxes for the landfill of waste, depending on the waste treatment method used. Waste recovery is therefore subject to a more favourable rate of taxation than treatment methods that are more harmful to the environment and to public health, such as waste disposal.










(130)


In order to rule on whether an advantage was granted to Renewi as a result of the application of that reduced tax rate, it is necessary to determine the classification of the operation at issue in light of the definitions contained in the applicable EU legislation and the clarifications provided by the case law of the Court of Justice.




5.1.3.   Waste recovery operation







(131)


Material recovery and backfilling operations are defined by the Waste Directive (see recitals 21 and 22).










(132)


Annexes I and II to that Directive also list the operations that can be classified as disposal and recovery, respectively. The Court of Justice has indicated the provisions of the Directive according to which those examples are not exhaustive, and that where a waste treatment operation cannot be attributed to any of the operations or categories of operations listed in Annexes I and II to the aforementioned Directive, on the sole basis of the wording of the operations in question, it must be classified on a case-by-case basis in light of the objectives and definitions of that Directive. It is therefore necessary to determine whether the main purpose of the operation in question is to recover waste that is replacing other materials that could have been used.










(133)


As set out in detail in recitals 27 to 32, an operation must meet two conditions in order to classify as a waste recovery operation: (i) a conservation condition and (ii) a suitability condition.










(134)


The two types of fluff (combustible fluff and non-biodegradable fluff), used both for landfill sector 1 and sectors 2 to 8, as per their registration as non-hazardous waste under the Walloon Government Order of 10 July 1997 (see recitals 53 and 148), will be considered together for the purposes of analysing the conservation and suitability conditions. Crushed bulky waste used for recovery operations in 2009 only will also be analysed in the light of these two conditions.










(135)


The waste used for the capping phase, in accordance with the registration obtained in 2016 (see recital 71), corresponds to that mentioned in Annex 1 to the Recovery Order, and is therefore considered de facto recoverable (unlike waste for which an ad hoc certificate must be requested, such as the two types of fluff mentioned above).










(136)


Although the complaint was lodged on 18 September 2015 and concerned registrations for waste recovery and certificates of use obtained by Renewi before that date, the Commission, in its analysis, will also take into account the registrations and certificates granted to Renewi subsequently.




5.1.3.1.   Conservation condition







(137)


According to the Court of Justice, the essential characteristic of a waste recovery operation is that its principal objective is that the waste serve a useful purpose in replacing other materials which would have had to be used for that purpose, thereby conserving natural resources.










(138)


Conserving natural resources must be the principal objective of the recovery operation. Conversely, if the conservation of natural resources constitutes only a secondary effect of an operation the principal objective of which is the disposal of waste, this cannot affect the classification of that operation as a disposal operation.










(139)


According to the Court of Justice, it is therefore necessary to determine whether the operation in question would have been carried out even in the absence of available waste, in which case it would have been necessary to use other materials.










(140)


The Commission observes, first, that it is apparent from the parties’ comments that the single permit required Renewi, for reasons of environmental protection, to carry out recovery operations with a view to the restoration of sector 1 of the Mont-Saint-Guibert landfill (see recital 47). Renewi therefore requested and obtained several certificates (see recitals 49 to 52).










(141)


As regards sectors 2 to 8, the single permit of 10 May 2004 initially allowed Renewi to operate these sectors (see recital 47). The Commission points out, however, that following the decision to close the site in accordance with the requirements of the single permit and on the basis of the recommendations made by the Scientific Committee in its report of 11 March 2011, from 2011 Renewi was legally obliged to close and restore the Mont-Saint-Guibert landfill as a whole for sectors 1 to 8 (see recitals 65 to 72).










(142)


The Commission therefore notes that Walloon legislation requires that the gradient of the dome’s slope must not exceed the height laid down in the single permit, and must not be less than 3 %. The permit granted to Renewi imposes a maximum height of 161 metres and a minimum slope gradient of 3 % (maximum 14 %). Under the conditions set out in the permit, if it proves impossible to attain that height, Renewi is obliged to fill the landfill with materials meeting the characteristics and conditions of recoverable waste in accordance with the Recovery Order. As a result of the successive bans on the disposal of certain waste in landfill by the Walloon Government decree of 18 March 2004 (see recitals 59 and 62), making it impossible to fill the landfill within the time frames initially set out in the single permit, it was decided to end operations at the landfill. The use of fluff was, moreover, justified by the technical impossibility of closing the site with the existing quantity of waste (see recital 68).










(143)


The restoration of the site (creation of the dome and capping) (see recitals 69 and 71) would therefore in any event have had to have taken place as a result of those regulatory obligations, even if suitable waste was not available in sufficient quantities for the purpose.










(144)


Therefore, only fluff and crushed bulky waste were used to restore the landfill, although it would have been possible to use other materials that existed at the time and were available in sufficient quantities. These materials, such as expanded clay, different types of foam and lava rocks (see recitals 87 to 89) were compliant with the specific requirements for the restoration of the landfill.










(145)


The Commission therefore concludes from the above that in the present case the conservation condition is fulfilled.




5.1.3.2.   Suitability condition







(146)


According to the Court, an operation can only be classified as a recovery operation if, according to the most recent scientific and technical knowledge, the waste used is suitable for that purpose.










(147)


In accordance with the Directive on the landfill of waste (see recital 32), inert and non-hazardous waste is suitable for carrying out redevelopment or restoration works. Moreover, Article 3(17a) of the Waste Directive confirms that non-hazardous waste is also suitable for backfilling operations (see recital 33).










(148)


The Commission observes that the Walloon authorities and Renewi have confirmed that the fluff did not constitute hazardous waste in accordance with the conditions laid down in the Walloon Government Order of 10 July 1997 establishing a waste classification, and in each of the registrations and certificates issued to Renewi. The non-hazardous nature of the waste (see recital 53) is therefore, in accordance with Article 13 of the Recovery Order, a prerequisite for the use of waste for recovery purposes (see recital 18).










(149)


Although the Walloon authorities have accepted that fluff cannot be regarded as inert waste stricto sensu, it is apparent from the information provided by the parties that, in the present case and in terms of its actual use, that waste has several of the characteristics found in inert waste. Fluff is thus not likely to ignite as a result of its use for the purpose of filling the site (see recitals 84 and 117-119).










(150)


The Commission therefore concludes from the above that, in the specific circumstances of the case, fluff can be considered as suitable waste and that the suitability condition is fulfilled. Similarly, as regards the bulky waste used for the period February 2009 to December 2009, the Commission considers that, in the present case, that waste can be regarded as meeting the suitability condition, in that it has the technical characteristics necessary for the restoration of the landfill, namely, low density, non-biodegradability and availability in sufficient quantities (see recital 85).










(151)


In light of the foregoing, the Commission considers that the Walloon authorities correctly classified the operations in question as recovery operations within the meaning of the Waste Directive, specifically the definition of a backfilling operation as set out in Article 3(17a) of that Directive, and correctly applied the resulting reduced tax rate in accordance with the relevant Walloon legislation. The Commission therefore concludes that the measure at issue does not confer an advantage on Renewi.




5.1.4.   Absence of selectivity







(152)


The Commission notes that the complaint lodged in the present case does not target the Walloon regional tax system on the deposit of waste in landfill as a whole, but only its application to the specific case of the operations carried out at the Mont-Saint-Guibert landfill, on the basis of the related registrations and certificates of use successively awarded by the Walloon Region to Renewi.










(153)


The selectivity of tax measures is assessed through a three-step analysis: (i) first, the reference system must be identified; (ii) second, it is necessary to determine whether a given measure constitutes an exception within that system insofar as it differentiates between economic operators which, in light of the system’s intrinsic objectives, are in a comparable factual and legal situation; (iii) third, it is necessary to establish whether the exception is justified by the nature or general scheme of the reference system.










(154)


The reference system is composed of a consistent set of rules that apply generally – on the basis of objective criteria – to all undertakings falling within its scope as defined by its objective. In the case of taxes, the reference system is based on such elements as the tax base, the taxable persons, the taxable event and the tax rates. Consequently, the reference system is, in principle, the levy itself (53).










(155)


In the present case, the reference system is the tax on waste recovery in landfill as it results from the rules laid down by the Tax Decree of 22 March 2007, the Decree of 19 June 2015 amending it, and the Recovery Order. This system is based on the following factors:






(a)


the tax rate is EUR 0/tonne, replaced by EUR 20/tonne pursuant to the Decree of 19 June 2015;










(b)


the rate is applied to recoverable waste used in landfill;










(c)


the person liable to pay the tax is the operator of the landfill.














(156)


The factors set out in recital 134 are objective criteria. Moreover, they are compliant with the aim of the tax on waste recovery in landfill. In particular, the Walloon legal order, like the EU regulatory framework on waste, distinguishes between waste disposal operations and waste recovery operations. Walloon legislation provides for two different rates of taxation for those two distinct types of operation that can be carried out in landfill. In order to encourage the use of recovery operations, the tax rate applicable to recovery operations is more favourable than that applicable to disposal operations.










(157)


The application of the rate of EUR 0/tonne and, from July 2015, EUR 20/tonne for recoverable waste used in landfill is a general measure which is likely to be applied to any undertaking carrying out an activity related to waste management as referred to in Article 6(1)(12) (formerly 11) of the Tax Decree. That measure provides, in a general and abstract manner, for a reduced rate for recoverable waste used in landfill as substitutes for products or equipment necessary for the operation and restoration of the landfill, including aftercare, in accordance with the operating permit or the environmental permit. That rate does not introduce differences between economic operators which, in light of the intrinsic objectives of the system, are in a comparable factual and legal situation, since an operator of landfill using recoverable waste in the context of a recovery operation is not – as regards the intrinsic objective of the system, in particular to promote the prevention and recovery of waste in the Walloon Region – in the same situation as an operator carrying out waste disposal.










(158)


The application of the reduced tax rate to operations carried out at the Mont-Saint-Guibert landfill is compliant with the tax and environmental legislation in force, which is in line with the waste hierarchy and does not result from a discretionary decision by the competent Walloon Minister. The Commission therefore notes, on the basis of the information provided by the parties, that the Minister’s decisions on the classification of an operation as recovery or disposal are strictly circumscribed and form part of an ongoing administrative process, during which the criteria governing what may constitute recovery operations are assessed. In that regard, the Commission notes that the classification is not at all subjective in that it is subject to strict compliance with the applicable rules and is based on objective and transparent criteria that are predefined in the various decrees and orders applicable (see recitals 105 to 111).










(159)


The Commission therefore concludes that the alleged aid measure is not selective in nature.




6.   CONCLUSIONS







(160)


In conclusion, the Commission finds that the measure in question, namely the application to Renewi’s activities at the Mont-Saint-Guibert landfill of the reduced rate applicable to recovery operations instead of the full rate applicable to disposal operations, does not constitute State aid,




HAS ADOPTED THIS DECISION:



Article 1
The measure of the Walloon Region in favour of Renewi, described in recitals 7 to 10 of this Decision, does not constitute aid under Article 107(1) of the Treaty on the Functioning of the European Union.


Article 2
This Decision is addressed to the Kingdom of Belgium.




Done at Brussels, 3 March 2023.


For the Commission

Margrethe VESTAGER
            

Member of the Commission






(1)  
            OJ C 187, 5.6.2020, p. 35.

(2)  Following the acquisition of Van Gansewinkel Groep B.V. by Shanks Netherlands Holdings B.V. in 2017, Shanks Group PLC was renamed Renewi PLC. Renewi Valorisation & Quarry is part of the Renewi PLC group. Thus, the complaint now concerns alleged unlawful aid granted to Renewi, since Renewi took over Shanks’s economic activities.

(3)  See footnote 1.

(4)  See recitals 6 to 57 of the opening decision.

(5)  Fluff is the product of waste pre-treatment in which certain materials (e.g. metals) are recovered and residues are crushed and screened. After this pre-treatment, the recovered materials are fluff primarily made up of plastics.

(6)  Belgian Official Gazette of 24 April 2007, p. 21883. Prior to the adoption of the 2007 Tax Decree, the taxation of waste was governed by the Decree of 25 July 1991 on the taxation of waste in the Walloon Region.

(7)  This rate of EUR 0 per tonne was valid for the period covered by the measure, i.e. 2005-2015.

(8)  See recital 57 of the opening decision.

(9)  Article 2 of the Decree of 19 June 2015 amending the Tax Decree of 22 March 2007 on encouraging the prevention and recovery of waste in the Walloon Region, Belgian Official Gazette of 30 June 2015, p. 37691, applicable since 1 July 2015.

(10)  Order of 14 June 2001 on encouraging the recovery of certain waste, Belgian Official Gazette of 10 July 2001, p. 23859.

(11)  Decree transposing Directive 2008/98/EC of the European Parliament and of the Council of 19 November 2008 on waste and repealing certain Directives, Belgian Official Gazette of 29 May 2012, p. 30502, available at: https://www.ejustice.just.fgov.be//mopdf/2012/05/29_1.pdf#Page46.

(12)  Directive 2008/98/EC of the European Parliament and of the Council of 19 November 2008 on waste and repealing certain Directives (OJ L 312, 22.11.2008, p. 3).

(13)  Article 3(15) of the Waste Directive

(14)  Article 3(15a) of the Waste Directive.

(15)  Article 3(17a) of the Waste Directive.

(16)  Article 3(19), of the Waste Directive.

(17)  Article 2 of the Decree of 10 May 2012.

(18)  Article 4(1) of the Waste Directive.

(19)  Council Directive 1999/31/EC of 26 April 1999 on the landfill of waste (OJ L 182, 16.7.1999, p. 1).

(20)  Article 2(e) of the Landfill Directive.

(21)  Recital 15 of the Landfill Directive.

(22)  Judgment of 28 July 2016, Edilizia Mastrodonato (C-147/15, ECLI:EU:C:2016:606).

(23)  Judgment cited in footnote 22, paragraphs 43 and 44.

(24)  Judgment cited in footnote 22, paragraph 45.

(25)  Judgment of 27 February 2002, Abfall Service AG (ASA) v Bundesminister für Umwelt, Jugend und Familie (C-6/00, ECLI:EU:C:2002:121), paragraph 69.

(26)  Judgment cited in footnote 22, paragraph 39, and case-law cited.

(27)  Judgment cited in footnote 22, paragraphs 43 and 44.

(28)  Judgment of 28 July 2016, Edilizia Mastrodonato (C-147/15, ECLI:EU:C:2016:606), paragraph 45.

(29)  Article 3(2) of the Landfill Directive.

(30)  Commission Notice – Guidelines on State aid for environmental protection and energy (OJ C 82, 1.4.2008, p. 1).

(31)  Commission Notice – Guidelines on State aid for environmental protection and energy 2014-2020 (OJ C 200, 28.6.2014, p. 1).

(32)  Belgian Official Gazette of 13 March 2003, p. 11486, available at: http://www.ejustice.just.fgov.be//mopdf/2003/03/10_1.pdf#Page68.

(33)  
            ‘Capping’ involves placing a sealing/drainage sheet on top of each layer of waste.

(34)  See Walloon Government Order of 10 July 1997 establishing a waste classification, Belgian Official Gazette of 30 July 1997, available at: http://environnement.wallonie.be/legis/dechets/decat026.htm, (Order establishing a waste classification).

(35)  See Article 11/2 of the Order establishing a waste classification.

(36)  Analysis report of 28 January 2014 by Agrolab Group.

(37)  Article 2(2) of the Walloon Government Order of 5 March 2008 on the management of waste arising from the usual activities of households and the related costs defines the concept of bulky waste. ‘Bulky’ means any waste which does not fit in a 60 litre bag or a collection container. By extension, the term ‘bulky’ includes any waste that is too voluminous (greater than a cube whose sides measure 30 centimetres) and/or too heavy to fit in a (60 litre) bin bag or a container equipped with a chip that is not the subject of a selective collection (e.g.: mattresses, mattress supports, dismantled furniture, linoleum, carpets, wallpaper). It should be noted that the bulky waste used in the landfill was crushed bulky waste.

(38)  
            9 307 tonnes in 2009, compared with 16 902 tonnes of non-biodegradable fluff.

(39)  Walloon Government Order of 18 March 2004 prohibiting the deposit of certain waste in landfills and laying down the criteria for the acceptance of waste in landfills, as amended by the Walloon Government Order of 7 October 2010, available at: http://environnement.wallonie.be/legis/dechets/decen008.htm.

(40)  Article 18, fifth subparagraph, of the specific conditions of the single permit.

(41)  See footnote 39.

(42)  Belgian Official Gazette of 13 March 2003, p. 11486, available at: http://www.ejustice.just.fgov.be//mopdf/2003/03/10_1.pdf#Page68.

(43)  The Walloon Region states that this study was incorporated into the 2004 single permit.

(44)  See definition of inert waste in the Landfill Directive, Article 2(e) and the Waste Decree, Article 2(6).

(45)  According to the Walloon Region, lava rocks (pozzolana) could have been imported from France and Italy, where this material is produced in significant quantities. According to the information provided by the Walloon authorities, France has an annual production capacity of 700 000 tonnes. Since lava rocks (pozzolana) and fluff have a comparable density, Renewi’s estimated requirements amount to a total of 651 979 tonnes over 10 years, which is significantly lower than the French production capacity, without counting any supply from Italy.

(46)  See footnote 39.

(47)  Walloon Government decree of 18 March 2004, cited in footnote 37, Article 2(7).

(48)  Renewi points out that in parallel with this significant regulatory reduction in the types of waste authorised for landfill, the single permit increased the maximum volume of waste allowed in the Mont-Saint-Guibert landfill. This increase resulted from the adoption of the Order of 27 February 2003 on the sectoral operating conditions of landfills, imposing the restoration of all landfill sites in the shape of a dome to ensure a minimum slope gradient of 3 % after settling in order to cause the gravity flow of stormwater to the ditches around the landfill, and meant that it was even more difficult for Renewi to fill its landfill in accordance with the requirements contained in the single permit and within the scheduled deadline.

(49)  Commission Notice on the notion of State aid as referred to in Article 107(1) of the Treaty on the Functioning of the European Union (OJ C 262, 19.7.2016, p. 1).

(50)  See judgment of the Court of Justice of 2 September 2010, Commission v Deutsche Post, C-399/08 P, ECLI:EU:C:2010:481, paragraph 38 and the case law cited.

(51)  See judgment of the Court of Justice of 19 December 2013, Association Vent De Colère! and Others, C-262/12, ECLI:EU:C:2013:851, paragraphs 17 and 18.

(52)  See judgment cited in footnote 42, paragraph 40 and the case law cited; judgment of the Court of Justice of 9 October 2014, Navantia, S.A, C-522/13, ECLI:EU:C:2014:2262, paragraph 21.

(53)  Notice on the notion of State aid, cited in footnote 49, paragraphs 133-134.


ELI: http://data.europa.eu/eli/dec/2023/2390/oj
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