Decision No 037/24/COL of 20 March 2024 to open a formal investigation into support measures relating to the Norwegian wood industry – Invitation to submit comments pursuant to Article 1(2) of Part I of Protocol 3 to the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice concerning the abovementioned measure
Date: 2024-04-25
Institutions: EFTA Surveillance Authority
Subjects: European Economic Area, Norway, State aid, aid to undertakings, control of State aid, investment aid, wood industry








C_202402965EN.000101.fmx.xml












Official Journal of the European Union


EN
C series













C/2024/2965


25.4.2024






Decision No 037/24/COL of 20 March 2024 to open a formal investigation into support measures relating to the Norwegian wood industry
Invitation to submit comments pursuant to Article 1(2) of Part I of Protocol 3 to the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice concerning the abovementioned measure
(C/2024/2965)

Interested parties may submit comments on the measure in question within one month of the date of publication to:





EFTA Surveillance Authority




Registry




Avenue des Arts 19H




1000 Bruxelles/Brussel




BELGIQUE/BELGIË





registry@eftasurv.int

The comments will be communicated to the Norwegian authorities. The identity of the interested party submitting the comments may be withheld following a request in writing stating the reasons for the request.

Summary


Procedure

On 7 April 2021, the Norwegian Precast Concrete Association and the Norwegian Steel Association lodged a complaint with ESA concerning alleged unlawful State aid in favour of the Norwegian wood industry.
Following receipt of the complaint, ESA has on several occasions received further information from the Norwegian authorities as well as the complainants.

Description of the measures

The complaint covers two measures which are allegedly unlawful and incompatible State aid. The first measure are grants pursuant to the second paragraph of Section 3(1)(c) of the Regulation on grants for investment and business activities in the agricultural sector (‘the Agricultural Investment Regulation’) (1). The second measure is the financing of focal points which together constitute the Wood Network.
Regarding the first measure, the Agricultural Investment Regulation establishes a scheme for financial support to investments and business development in the agricultural sector. Support for investments in agricultural production facilities is provided pursuant to Section 3(1)(c).
The first paragraph of Section 3(1)(c) provides a general basis for financial support to investments in agricultural production facilities and associated equipment. The second paragraph, which is subject to the complaint, provides a basis for additional financial support, under the condition that the construction is based on wood as a building material.
Regarding the second measure, the main objective of the Wood Network is, according to the Norwegian authorities, to coordinate the exchange of knowledge and experience between the focal points relating to the use of wood in construction projects. To this end, the Wood Network provides for network building and sharing of knowledge and best practices, in addition to hosting workshops and seminars. The focal points also provide analyses and reports.

Assessment of the measures

Regarding the additional aid pursuant to Section 3(1)(c) of the Agricultural Investment Regulation, ESA has preliminary assessed that the measure may fall outside the product scope of the EEA Agreement. While the direct beneficiaries appear to all fall outside the scope of the EEA Agreement, the additional aid appears to indirectly favour the Norwegian wood industry. In this context, ESA has doubts as to whether the additional aid falls inside the scope of the EEA Agreement.
Provided that the additional aid pursuant to Section 3(1)(c) of the Agricultural Investment Regulation falls inside the scope of the EEA Agreement, ESA has doubts as to whether the measure constitutes State aid towards the wood industry. More specifically, ESA has doubts as to whether the additional aid confers an advantage towards the wood industry or undertakings therein. In addition, ESA has doubts as to whether the additional aid is selective, within the meaning of Article 61(1) of the EEA Agreement.
Provided that the additional aid pursuant to Section 3(1)(c) of the Agricultural Investment Regulation constitutes State aid, ESA has doubts as to whether the measure is compatible with the functioning of the EEA Agreement pursuant to its Article 61(3)(c). The Norwegian authorities have explained that the measure pursues environmental objectives, by incentivising the use of climate friendling building materials. In this context, the Norwegian authorities have been invited to elaborate on their assessment of the compatibility of the measure.
Regarding the financing of the focal points within the Wood Network, ESA has doubts as to whether the measure constitutes State aid within the meaning of Article 61(1) of the EEA Agreement. More specifically, ESA has doubts as to whether the focal points are ‘undertakings’ and whether the financing is liable to distort competition and affect trade between the Contracting Parties to the EEA Agreement.
Provided that the financing of the focal points within the Wood Network constitutes State aid, ESA has doubts as to whether the aid is compatible with the functioning of the EEA Agreement. First, the Norwegian authorities have been invited to explain why the financing is compliant with the Block Exemption Regulation (‘GBER’), insofar the financing is covered by the GBER. Second, the Norwegian authorities have been invited to elaborate on why, insofar the financing is not based on a GBER scheme, the aid is compatible with the functioning of the EEA Agreement.


(1)  Regulation of 19 December 2014 No. 1816. In Norwegian: ‘Forskrift om midler til investering og bedriftsutvikling i landbruket’.


ELI: http://data.europa.eu/eli/C/2024/2965/oj
ISSN 1977-091X (electronic edition)