HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN"L 235/42
EN
Official Journal of the European Union
10.9.2011
COMMISSION DECISION
of 8 March 2011
on State aid measure C 24/09 (ex N 446/08) — State aid for energy-intensive businesses under the
Green Electricity Act in Austria
(notified under document C(2011) 1363)
(Only the German text is authentic)
(Text with EEA relevance)
(2011/528/EU)
THE EUROPEAN COMMISSION,
(4) On
22
July
2009
the
Commission
adopted
a
hybrid
decision: it approved the measures in favour of green
electricity producers, which it found to be in line with
Having regard to the Treaty on the Functioning of the European
the Community guidelines on State aid for environmental
Union, and in particular the first subparagraph of Article 108(2)
protection (‘the Environmental Aid Guidelines’/‘the
thereof,
Guidelines’) ( 3 ), but decided to initiate a formal investi
gation in respect of the exemption mechanism for
energy-intensive businesses ( 4 ).
Having regard to the Agreement on the European Economic
Area, and in particular Article 62(1)(a) thereof,
(5) By
letter
dated
23
July
2009
the
Commission
informed
Austria of this decision and asked Austria to provide all
Having called on interested parties to submit their comments
information necessary for the assessment of the measure.
pursuant to the provisions cited above ( 1 ), and having regard to
their comments,
(6)
The Commission published its decision in the Official
Journal of the European Union ( 5 ), and invited interested
Whereas:
parties to submit their comments.
1. PROCEDURE
(7) By
letter
of
19
August
2009
Austria
requested
an
extension of the deadline for a reply, which the
(1) On
27
June
2008
Austria
pre-notified
changes
that
it
Commission accepted by letter of 9 September 2009.
planned to make to the Green Electricity Act (‘the
Austria ultimately submitted its comments on
Act’), which the Commission had found to be compatible
8 October 2009.
with the internal market in 2006 in the form in which it
then stood ( 2 ). On 4 September 2008 Austria notified a
new version of the Act; that version is the subject of this
(8) In
the
meanwhile,
by
letter
dated
7
October
2009,
the
Decision.
Austrian Chamber of Employees had submitted obser
vations on the measure for the benefit of energy-
intensive businesses. The Commission asked Austria to
(2) By
letter
dated
28
October
2008,
the
Commission
comment on these observations. Austria submitted
requested additional information. After a reminder had
comments on 23 December 2009, and supplied further
been sent, Austria submitted additional information by
information on 23 April 2010.
letter dated 22 December 2008. Following a meeting
with Austrian representatives on 11 February 2009, the
Commission requested further information by letter
(9)
By letters dated 21 June 2010 and 19 July 2010 the
dated 19 February 2009. Austria provided that
Commission requested additional information from
information in a letter dated 17 March 2009. By letter
Austria, which was provided on 13 September 2010.
of 8 May 2009 the Commission requested further
At Austria’s request, a meeting between the Commission
information, which Austria supplied by letters dated 9
and Austrian representatives took place on 9 July 2010.
and 19 June 2009.
(10) In a letter dated 24 November 2010 Austria stressed the
(3) On
9
July
2008
the
Commission
received
a
complaint
importance of the Green Electricity Act to the country,
from the Austrian Chamber of Employees (Bundes
and asked for a decision in the case by the beginning of
arbeitskammer) relating to a measure in the Act for the
December 2010. The Commission replied to that letter
benefit of energy-intensive businesses.
on 7 December 2010. A further meeting with Austrian
representatives took place on 9 December 2010.
( 1 ) OJ C 217, 11.9.2009, p. 12.
( 2 ) Commission Decision of 4 July 2006 on State aid measures NN
( 3 ) OJ C 82, 1.4.2008, p. 1.
162a/03 and N 317a/06 — Support of electricity production
( 4 ) State aid measure C 24/09 (ex N 446/08), C(2009) 3538 final
from renewable sources under the Austrian Green Electricity Act
(OJ C 217, 11.9.2009, p. 12).
(feed-in tariffs) (OJ C 221, 14.9.2006, p. 8).
( 5 ) See footnote 1.

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EN
10.9.2011 Official
Journal
of
the
European
Union L
235/43
(11) By
letter
of
30
December
2010
Austria
recalled
the
Netz AG is owned by TIWAG AG, which itself is wholly
arguments it had put forward in favour of the measure
owned by the Province of the Tyrol. CISMO GmbH is
in the course of the proceedings, and asked the
owned by Oesterreichische Kontrollbank AG and by
Commission to approve the exemption mechanism for
transmission system operators and electricity and gas
energy-intensive businesses. The Commission replied to
undertakings. Oesterreichische Kontrollbank AG is
that letter on 25 January 2011.
owned by Austrian banks. Investkredit Bank AG is
owned mainly by the Volksbanken. Smart Technologies
is owned by Siemens. Thus publicly controlled share
holders hold 49,6 % of the shares in OeMAG, and
2. DETAILED DESCRIPTION OF THE MEASURE
privately controlled shareholders 50,4
%. The
(12) In
its
opening
decision
of
22
July
2009
the
Commission
Commission has no evidence to suggest that the
authorised the amended Act, with the sole exception of
publicly controlled shareholders can exercise control or
Section 22c, which establishes the exemption mechanism
at least joint control over OeMAG.
for energy-intensive businesses. The description here will
therefore confine itself to that mechanism.
(16) Section
22c(1)
of
the
Act
establishes
a
mechanism
that
entitles energy-intensive businesses to ask their electricity
supplier not to supply them with green electricity. In
2.1. The exemption mechanism for energy-intensive
order to be eligible, the energy-intensive businesses
businesses
have to show that they comply with the following two
(13) Section 3 of the Act states that Austria is to grant a
conditions:
concession to one or more undertakings to perform
the tasks of a green electricity settlement centre (kos
tromabwicklungstelle, a ‘settlement centre’). In particular,
(a) they must qualify for the reimbursement available
concessionaires are to buy green electricity from
under the Energy Tax Rebate Act (Energieabgabevergü
producers at a fixed price, and to sell that electricity to
tungsgesetz); and
electricity suppliers at a fixed price. Electricity suppliers
are obliged to purchase a percentage of their overall
supply from a settlement centre: the percentage
required corresponds to the average share of green elec
(b) their green electricity spending must be equal to at
tricity in the overall electricity mix in Austria.
least 0,5 % of their net production value.
(14) Currently, Austria has granted a single countrywide
The exemption is granted on application to the energy
concession to a single settlement centre, Abwicklungs
regulator, E-Control.
stelle für kostrom AG (OeMAG). OeMAG is an
ordinary public limited company, governed by private
rather than public law, and is audited by a chartered
accountant. It is monitored by the Austrian Federal
(17) If
the exemption is granted, electricity suppliers
are
legally banned from charging the additional costs of
Ministry of Economic Affairs and Labour and by E-
green electricity to these large electricity consumers.
Control GmbH, the Austrian energy regulator. The

essential components in the implementation of the
measure for the benefit of energy-intensive businesses
(such as the arrangements for allocating electricity to
(18) Section
22c(5)
of
the
Act
states
that
contracts
between
electricity traders, the price to be paid by traders, or
electricity distributors and large electricity consumers
the contribution to be made by final consumers) are
must provide that the distributor is not to supply
laid down in advance by the authorities, by statute or
green electricity to the customer and is not to not pass
executive order. Any dispute between the undertakings
on the additional costs of green electricity. Any
involved is to be settled in the ordinary courts of law
contractual provision to the contrary is null and void ( 6 ).
rather than by administrative proceedings.
(19) If
an
energy-intensive
business
is
exempted
from
the
(15) OeMAG is a public limited company owned by trans
purchase obligation, it has to make a compensatory
mission system operators, banks and industrial under
payment to OeMAG equal to 0,5 % of its net production
takings: a 24,4 % stake is held by Verbund-APG, and
value in the preceding calendar year (Section 22c(2) of
the rest is held by VKW Netz AG, TIWAG Netz AG,
the Act).
CISMO GmbH, Oesterreichische Kontrollbank AG,
Investkredit Bank AG, and Smart Technologies, with
( 6 ) Section 22c(5) of the Act: ‘Vertrge zwischen Stromhndlern und
12,6 % each. Verbund-APG is a wholly owned subsidiary
Endverbrauchern haben für den Fall des Vorliegens eines Bescheids
of Verbund AG (sterreichische Elektrizittswirtschafts-
nach Abs. 1 zwingend vorzusehen, dass diesen Endverbrauchern ab
Aktiengesellschaft, Verbundgesellschaft); a 51 % stake in
dem Zeitpunkt der Entlastung der Quote der Stromhndler (§ 15
Verbund AG is held by the Republic of Austria. VKW
Abs. 1 Z 3 und Abs. 1a) kein kostrom, der den Stromhndlern
von der kostromabwicklungsstelle zugewiesen wird (§ 19 Abs. 1),
Netz AG is owned by Illwerke AG, 95,5 % of the shares
geliefert wird und keine berwlzung von kostromaufwendungen
in which are held by the Province of Vorarlberg. TIWAG-
erfolgt. Entgegenstehende Vertragsbestimmungen sind nichtig’.

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L 235/44
EN
Official Journal of the European Union
10.9.2011
2.2. Summary of the opening decision
the economy with the exception of fisheries and primary
production of agricultural products. More than 2 000
(20) In the notification, Austria argued that the exemption
undertakings have benefited under the measure.
mechanism should be assessed independently from the
general scheme of aid to green producers, since it
concerned only the ‘private business relationship’
between energy-intensive undertakings and distributors.
Austria argued that the exemption did not constitute
3. OBSERVATIONS PUT FORWARD BY AUSTRIA
State aid, and that if it did it was in any event compatible
(24) As
in
the
pre-notification
and
notification
stages,
Austria
with the internal market by analogy with Chapter 4 of
continues to take the view that the measure for the
the Environmental Aid Guidelines.
benefit of energy-intensive businesses does not constitute
State aid, because it does not involve the use of State
resources and is not selective.
(21) On the question of the presence of State aid, the
Commission in its opening decision found that the
exemption from the financing mechanism could not be
(25) But
even
if
the
exemption
mechanism
did
constitute
assessed separately from the financing mechanism itself.
State aid, Austria considers that it could in any event
The Commission considered that an exception or
be declared compatible with the internal market by
exemption was always inseparably linked to the
analogy with Chapter 4 of the Environmental Aid
relevant rule, so that the exemption was an integral
Guidelines, with Article 25 of Commission Regulation
part of the general scheme and had to be assessed
(EC) No 800/2008 of 6 August 2008 declaring certain
accordingly under State aid law. In addition, the legis
categories of aid compatible with the common market in
lation permitted distributors with a large share of
application of Articles 87 and 88 of the Treaty (General
exempted customers to apply for exemption from the
Block Exemption Regulation) (
feed-in tariff; thus the scheme could also cause direct

11 ), and with Article 17 of
Council Directive 2003/96/EC of 27 October 2003
losses to OeMAG, which strengthened the conclusion
restructuring the Community framework for the
that State aid was involved ( 7 ).
taxation of energy products and electricity ( 12 ) (Energy
Tax Directive).
(22) The
Commission
expressed
doubts
with
regard
to
the
compatibility of the exemption mechanism with the
State aid rules. For these reasons the Commission
3.1. State resources and imputability
decided to open a formal investigation into the
(26) With
regard
to
State
resources,
Austria
takes
the
view
mechanism.
that the Act is analogous to the German Renewable
Energy Act (Erneuerbare-Energien-Gesetz), which in
Austria’s understanding does not involve the use of
State resources. Austria refers in this regard to the
(23) Pending
a
final
decision
on
the
part
of
the
Commission,
ruling of the Court of Justice in the PreussenElektra
Austria granted the benefits provided for in the
case ( 13 ).
exemption mechanism ( 8 ) on the basis of the provision
in the Temporary Framework allowing aid of up to
EUR 500 000 to be given in the period from 1 January
2008 to 31 December 2010 ( 9 ). The Commission
(27) In
Austria’s
opinion
the
exemption
mechanisms
estab
approved this arrangement as part of State aid measure
lished by the Austrian Green Electricity Act and the
No N 47a/09 Limited amounts of compatible aid under the
German Renewable Energy Act share the following
Temporary Framework (‘sterreichregelung Kleinbei
features:
hilfen’) ( 10 ). This scheme may be applied to firms that
were not in difficulty on 1 July 2008, in all sectors of
( 7 ) Section 15(1a) of the Act: ‘Weisen Stromhndler der kostrom
(a) in both systems the additional cost resulting from the
abwicklungsstelle nach, dass sie Endverbraucher beliefern, die
guaranteed feed-in tariff is borne by electricity
einen Bescheid nach § 22c Abs. 1 erwirkt haben, so ist dieser
Umstand von der kostromabwicklungsstelle bei der Festlegung
suppliers, who have to buy a certain proportion of
der Quoten für die Stromhndler (§ 15 Abs. 1 Z 3) ohne
renewable energy at a fixed price;
Verzgerung zu berücksichtigen. Hinsichtlich dieser Strommengen,
für die keine Zuweisung erfolgen darf, erhht sich die Quote aller
Stromhndler für die übrigen Stromlieferungen. Sofern eine
Quotenanpassung aufgrund der geltenden Marktregeln nicht unmit
telbar durchgeführt werden kann, ist die kostromabwicklungsstelle
(b) in both systems electricity suppliers are free not to
ermchtigt, den als Folge des Entfalls von Zuweisungsmglichkeiten
buy renewable electricity for those of their clients
anfallenden Energieüberschuss im Sinn des § 15 Abs. 4 bestmglich
who are exempt from the obligation to take such
zu verwerten’.
renewable electricity;
( 8 ) Austrian submission of 9 September 2010, p. 5, replying to the
Commission’s request for information of 19 July 2010.
( 9 ) Commission Regulation (EC) No 1998/2006 (OJ L 379,
( 11 ) OJ L 214, 9.8.2008, p. 3.
28.12.2006, p. 5).
( 12 ) OJ L 283, 31.10.2003, p. 51.
( 10 ) OJ C 106, 8.5.2009, p. 8.
( 13 ) Case C-379/98 [2001] ECR I-2099.

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EN
10.9.2011 Official
Journal
of
the
European
Union L
235/45
(c) in both systems the obligation to buy renewable elec
mechanism. All that changes is the distribution of the
tricity from producers is imposed upon market
overall amount between the different categories of
participants who are not acting in a public service
final electricity consumer.
role; these market participants are entitled by law to
pass on the additional costs to electricity suppliers,
and purchase obligations and prices are determined
by law;
3.2. Selectivity
(29) Austria
argues
that
the
exemption
for
energy-intensive
businesses does not constitute State aid, because it is
(d) in both systems, the regulator verifies that there is no
not selective.
overcompensation of an undertaking that has an
obligation to purchase renewable electricity from
producers.
(30) Energy-intensive
businesses
are
exempted
only
partially
from financing the support provided to producers of
(28) In paragraphs 42–48 of the opening decision, the
green electricity. They have to make a compensatory
Commission explained in detail why and in what
payment of 0,5 % of their net production value directly
respects the measure under assessment was comparable
to OeMAG, and thus continue to contribute to the
to the measure considered by the Court of Justice in the
financing of the support for the production of green
Essent case (
electricity.

14 ). Austria disputes these findings, on the

following grounds.
(31) Citing
the
judgment
in Adria-Wien Pipeline ( 19 ), Austria
(a) OeMAG is not a body designated by the State for the
argues that the measure is not restricted to certain
purpose of collecting a charge. In Austria’s under
sectors of the economy de jure, nor is it selective de
standing the grid operators in Germany play exactly
facto. But even if there is prima facie selectivity, it is in
the same role as OeMAG did in Austria.
any event justified by the rationale of the system.
(b) OeMAG is a private undertaking, and not a body
governed by public law like the corporations that
(32) De
jure
selectivity: The Green Electricity Act does not
were discussed in the judgments in Air France ( 15 )
restrict the measure to certain sectors of the economy
and Salvat Père ( 16 ). The State has no powers to
or to undertakings of a certain size, nor does it include
appoint members of the management or the super
any other selective criteria. In support of its argument
visory board, nor has it any supervisory powers or
Austria submits that there is nothing in the case-law to
veto rights over OeMAG’s decisions. The State has no
suggest that the selectivity test for State aid is satisfied
power to take over OeMAG’s functions.
merely because a net production value threshold has
been laid down. In addition, Austria points out that
the measure is not restricted to particular sectors of the
(c) Any litigation involving OeMAG is a matter for the
economy or to undertakings of a certain size, nor is it
ordinary courts.
subject to any other selective criteria: under the
temporary arrangements in operation, the measure
affects 19 different sectors and approximately 2 300
(d) The only public control to which OeMAG is subject
undertakings. Thus the measure is not selective de jure.
is an ex post audit by the Austrian Court of Auditors.
(e) The State budget does not cover any losses made by
(33) De
facto
selectivity: According to Austria, the high number
OeMAG. The role of the public authorities is limited
of sectors and undertakings affected by the exemption
to fixing the prices for the purchase and sale of
mechanism and the fact that the measure is not restricted
renewable electricity. There is therefore no burden
to certain sectors or to undertakings of a certain size, or
on the State budget of the kind shown in Sloman
subject to any other selective criteria, show that the
Neptun (
measure is de facto a general measure. Austria submits

17 ) and Pearle ( 18 ).
that this position too is supported by the Adria-Wien
Pipeline case. In Adria-Wien Pipeline the Court of Justice
(f) E-Control enjoys no discretion as to whether to grant
had to consider a partial reimbursement of an energy tax
an exemption under Section 22c of the Act.
which was granted to undertakings if the tax exceeded
0,35 % of their net production value. The Court held that
‘National measures which provide for a rebate of energy
(g) The total amount of money the electricity suppliers
taxes on natural gas and electricity do not constitute
pay to OeMAG is not affected by the exemption
State aid within the meaning of Article 92 of the EC
Treaty [now Article 107 of the TFEU] … where they
apply to all undertakings in national territory, regardless
( 14 ) Case C-206/06 [2008] ECR I-5497.
of their activity’ ( 20 ).
( 15 ) Case T-358/94 [1996] ECR II-2109.
( 16 ) Case T-136/2005 [2007] ECR II-4063.
( 17 ) Joined Cases C-72/91 and C-73/91 [1993] ECR I-887.
( 19 ) Case C-143/99 [2001] ECR I-8365.
( 18 ) Case C-345/02 [2004] ECR I-7139.
( 20 ) Adria-Wien Pipeline, paragraph 16.

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L 235/46
EN
Official Journal of the European Union
10.9.2011
(34) Justification
by
the
rationale
of
the
system: With regard to
analogy in particular with the provisions on harmonised
the structure of the refinancing and exemption
environmental taxes. On this legal basis, the exemption
mechanism, Austria takes the view that the design of
mechanism can be held compatible provided that the
the differentiation of charges is analogous to what
undertakings in question pay the minimum tax level
exists in other tax- and fee-financed systems. The differ
set by the Energy Tax Directive, i.e. EUR 0,50 per
entiation takes account of the capacity of undertakings to
MWh, which indeed they do. It follows that the addi
bear additional charges; it is in line with the rationale of
tional relief from the feed-in tariff system in the form of
the system, and consequently does not constitute State
a partial exemption from contributing to its financing
aid. Austria considers that this position has also been
can be considered compatible, since the contribution
taken by the Commission in two earlier State aid
that still has to be made to the financing of support
decisions ( 21 ).
for the production of green electricity continues to
function as a supplement to the minimum electricity tax.
(35) Further, Austria points out that the exemption
mechanism does not impair the environmental benefits
provided by the Act, since the amount of aid available
(39) Austria
considers
that
the
exemption
mechanism
leads
at
for supporting the production of green electricity is not
least indirectly to a higher level of environmental
reduced. Reducing environmental charges for certain
protection. In its view, the exemption mechanism is
businesses is the only way to establish a sustainable
necessary in order to render possible a general increase
financing mechanism for green electricity, which is
in the amount that electricity consumers pay for
necessary in order to ensure support for renewable
renewable electricity.
energy sources.
(40) Austria supports this argument by comparing the
3.3. Compatibility
wordings of point 152 of the Environmental Aid
Guidelines and Article 25 of the General Block
(36) On
the
question
of
compatibility,
Austria
submits
that
Chapter 4 of the Environmental Aid Guidelines can be
Exemption Regulation
( 23 ). After comparing the
applied to the exemption mechanism by analogy.
wordings of the General Block Exemption Regulation

in several language versions, Austria comes to the
conclusion that Article 25 of the Regulation is broader
in scope than point 152 of the Guidelines: the reductions
in environmental taxes referred to in point 152 of the
Guidelines require energy taxes that have been fully
(37) Chapter
4
of
the
Guidelines
(points
151–159)
sets
out
harmonised, but from Article 25 of the Regulation it is
requirements for State aid granted in the form of
clear that reductions in environmental taxes — such as
reductions of or exemptions from environmental taxes.
reductions in an electricity charge under the Energy Tax
It provides for two types of assessment. First, if the aid is
Directive — are exempted provided that the conditions
in the form of a reduction of or exemption from an
of the Energy Tax Directive are fulfilled. The exemption
environmental tax that has been harmonised under
mechanism for energy-intensive businesses in fact
Community law, the measure is compatible provided
reproduces the requirements for tax reductions in the
the beneficiaries pay at least the Community minimum
Energy Tax Directive. The rationale, the evaluations and
tax level set by the Energy Tax Directive ( 22 ). If the
the approach in the Energy Tax Directive and provisions
measure provides for reductions of or exemptions from
that refer to it, such as Article 25 of the General Block
harmonised environmental taxes that go beyond these
Exemption Regulation, are consequently applicable to the
minimum tax levels, or reductions of or exemptions
proposed exemption mechanism. Both the exemption
from environmental taxes that have not been
mechanism and the system for placing the cost on elec
harmonised, the Member State has to provide detailed
tricity consumption meet the conditions of the Energy
information on the necessity and proportionality of the
Tax Directive, and are therefore justified under Article 25
measure.
of the General Block Exemption Regulation, or
compatible with the internal market by analogy with
that Article ( 24 ).
(38) Austria
proposes that Chapter 4 of the Guidelines,
regarding aid in the form of reductions of or exemptions
from environmental taxes, should be applied by analogy
here. In Austria’s opinion the measure can be assessed by
(41) Austria
refers
here
to
the Joint paper on the revision of the
Community guidelines on State aid for environmental
( 21 ) N 271/06, Denmark, tax relief for supply of surplus heating (OJ C
41, 24.2.2007, p. 2); N 820/06, Germany, tax relief for certain
( 23 ) Regulation (EC) No 800/2008.
energy-intensive processes (OJ C 80, 13.4.2007, p. 4).
( 24 ) Austria’s comments on the Commission’s opening decision of
( 22 ) Directive 2003/96/EC.
22 July 2009, submitted on 9 September 2010.

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EN
10.9.2011 Official
Journal
of
the
European
Union L
235/47
protection and Energy Tax Directive of 7 July 2006 ( 25 ). The
mechanism for large consumers of electricity; this was
joint paper made it clear that Member States needed
not admissible. The Chamber considered that the
flexibility in order to be in a position to differentiate
analogy was not a legitimate one.
reasonably. It was part of the nature and logic of envi
ronmental taxes and charges that there should be
exemptions or differentiated rates. The Member States
therefore felt that the Environmental Aid Guidelines
(46) The
cap
on
energy
taxes
was
State
aid,
granted
through
and the General Block Exemption Regulation should be
the tax system, which was aimed at least indirectly at an
interpreted broadly.
improvement in environmental protection, whereas the
exemption from the purchase obligation for energy-
intensive businesses did not pursue any environmental
objective and could not be subsumed under the Environ
(42) Finally,
Austria
submits
detailed
argument
to
show
that
mental Aid Guidelines.
similar systems are in place in other Member States, and
stresses that the Green Electricity Act is largely
comparable to the German Renewable Energy Act.
Since energy-intensive businesses in Austria compete
(47) Since the Act provided specifically for the exemption of
with undertakings in other Member States (e.g.
large consumers from such a purchase obligation, the
Germany) and outside the EU, the exemption
provision could not be regarded as a reduction of or
mechanism is essential in order to ensure that they are
exemption from environmental taxes within the
not placed at a disadvantage in international competition.
meaning of Chapter 4 of the Guidelines.
4. OBSERVATIONS RECEIVED FROM THIRD PARTIES
(48) Further,
even
if
Chapter
4
could
be
applied
by
analogy,
the exemption mechanism would not be compatible with
(43) The Austrian Chamber of Employees submitted obser
it, for the following reasons. The measure was not
vations on the opening of the formal investigation. The
limited to a period of 10 years. In current market
organisation, which had 3,2 million members, considered
conditions price elasticity was sufficient to ensure that
that the financing system of the Green Electricity Act
any increase in the production costs of the industries
involved State aid. It did not share Austria’s view that
concerned (such as paper and steel) could be passed on
the exemption mechanism for energy-intensive
to consumers; this meant that the exemption mechanism
consumers was compatible with State aid law. The
did not meet the condition in point 158(c) of the
mechanism placed an additional burden on small and
Guidelines.
medium-sized enterprises (SMEs) and households, which
were obliged to pay the extra costs of green energy even
though they were not the main consumers. This would
lead to distortion of competition at the expenses of
(49) The
exemption
was
not
proportional,
because
energy-
SMEs.
intensive consumers were not required to consume
green electricity, so that the movement of renewable
energy prices towards market price level would be
delayed. SMEs and households alone had to pay for the
(44) The
Chamber
of
Employees
referred
to
the
Commission
extra costs of producing green electricity, although they
decision of 4 July 2006, in which the Commission
consumed only small volumes of energy. The exemption
concluded that the feed-in tariffs constituted State
mechanism consequently also failed to meet the
aid ( 26 ). Since the legal framework governing the feed-in
condition in point 159(a) of the Guidelines.
tariffs had not changed since that time, the Chamber
argued that the support system provided for in the
Green Electricity Act of 2008 continued to involve
State aid. The Chamber wondered how Austria could
(50) Nor
were
there
any
agreements
of
the
kind
referred
to
in
now defend a position different from the one it had
159(c) of the Guidelines by which large energy
expressed when it notified the earlier version of the Act.
consumers committed themselves to achieve the
objectives of the Act. Finally, the exemption
mechanism for large consumers did not contribute to
energy efficiency or environmentally friendly use of
(45) The Chamber did not agree with Austria that the
energy, but on the contrary excepted those consumers
exemption of large consumers from the purchase obli
from any share in achieving EU-wide environmental
gation, as provided in the Act, should be regarded in the
objectives.
same light as the cap on energy taxes. Austria, citing an
earlier Commission decision approving a cap on energy
taxes, was now also seeking approval for the exemption
(51) Section
22
of
the
Act
was
consequently
an
operational
aid measure sui generis, which did not produce any
( 25 ) Published by Germany, Denmark, the Netherlands, Finland, Sweden
and Austria.
environmental benefit and did not fall under the Envi
( 26 ) See footnote 2.
ronmental Aid Guidelines. Since this aid was not limited

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L 235/48
EN
Official Journal of the European Union
10.9.2011
in time, and was not scheduled to decrease over time,
5.1.1. Advantage
and since it distorted competition mainly at the expense
of SMEs, it should not be authorised.
(55) Where
the
possible
advantage
results
from
an
exemption
or a partial exemption from a regulatory charge, the only
question to be determined is whether, under a particular
statutory scheme, a State measure is such as to favour
certain undertakings or the production of certain goods
within the meaning of Article 107(1) TFEU in
5. ASSESSMENT
comparison with other undertakings which are in a
(52) The
Commission
has
examined
the
notified
measure
in
legal and factual situation that is comparable in the
the light of Articles 107 ff. of the TFEU and Articles 61
light of the objective pursued by the measure in
ff. of the EEA Agreement (
question (

27 ).

29 ).
(53) The
Commission
points
out,
first
of
all,
that
the
notified
(56) In the present case, the objective pursued by the measure
legislation contains two separate measures, both of which
in question is to raise revenue from electricity users in
were considered under State aid law in the Commission’s
order to finance the production of electricity from
opening decision of 22 July 2009 ( 28 ). The Act provides
renewable sources. Energy-intensive businesses are in
for aid in the form of a feed-in tariff for the benefit of
the same factual and legal situation as all other electricity
producers of green electricity. It also contains a provision
users, as they all consume electricity and purchase their
by which energy-intensive businesses can — under
electricity from electricity suppliers, which in turn have
certain conditions — be partially exempted from the
the obligation to purchase a certain amount of renewable
obligation to pay the feed-in tariff. In its decision of
electricity at a price fixed by legislation (the ‘clearing
22 July 2009 the Commission accepted that the feed-in
price’ (Verrechnungspreis)). In the absence of the
tariffs for the benefit of green electricity producers
exemption mechanism, energy-intensive businesses
constituted State aid compatible with the internal
would have to pay their electricity suppliers the addi
market, but it expressed doubts as to whether the
tional costs of green electricity as shown in their elec
exemption mechanism was compatible with the State
tricity bill. This is the way in which electricity suppliers
aid rules, and accordingly opened a formal investigation
pass on the additional costs resulting from their obli
into this aspect of the Act. In the decision of 22 July
gation to purchase green electricity from the settlement
2009 the Commission approved the support for
centre. Other electricity users that are in the same factual
producers of green electricity as compatible State aid,
and legal situation, as they all purchase electricity, do not
but it did not take a final position on the question
enjoy this possibility. The exemption mechanism
whether the exemption of energy-intensive businesses
consequently favours energy-intensive businesses in
from the purchase obligation constituted State aid, and
comparison with all other electricity consumers.
if so whether this exemption mechanism was compatible
with the State aid rules. These questions have been
considered in the formal investigation that has led up
to the present Decision. As explained below, however,
the finding in the decision of 22 July 2009 that the
funds channelled through OeMAG to green electricity
(57) On
the
basis
of
an
exemption
granted
by
E-Control,
producers are State resources is important for the deter
energy-intensive businesses are entitled to ask not to be
mination of the presence of State resources in the
supplied with green electricity, and the electricity
mechanism that exempts energy-intensive businesses
suppliers are prohibited, by law, from passing on to
from contributing to these funds.
the exempted undertakings any costs they incur as a
result of their obligation to buy green electricity from
the settlement centre. Instead, energy-intensive businesses
pay the equivalent of 0,5 % of their net production value
to the centre.
5.1. Presence of State aid
(54) A
measure
constitutes
State
aid
caught
by
Article
107(1)
TFEU if: first, it confers an advantage on the recipients;
second, it is financed by the State or through State
resources; third, it favours selected undertakings or
(58) The effect of the exemption mechanism, therefore, is to
economic activities; and, fourth, it has the potential to
cap the contribution of energy-intensive industries to the
affect trade between Member States and to distort or
revenues of the centre at a certain level. They are thus
threaten to distort competition in the internal market.
partially exempt by law from a charge which they would
have had to bear under normal market conditions. The
exemption mechanism consequently confers an
( 27 ) The assessment conducted here is based on both the TFEU and the
advantage on the undertakings which are eligible for it.
EEA Agreement. For the sake of simplicity, however, reference will
be made only to the provisions of the TFEU.
( 28 ) Commission decision regarding State aid measure C 24/09 (ex
( 29 ) Court of Justice in Case C-75/97 Belgium v Commission [1999] ECR
N 446/08) — The Austrian Green Electricity Act — potential aid
I-3671, paragraphs 28–31, and Case C-143/99 Adria-Wien Pipeline
to large electricity consumers.
[2001] ECR I-8365, paragraph 41.

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EN
10.9.2011 Official
Journal
of
the
European
Union L
235/49
(59) According to Austria, the relief may amount to a total of
(b) the State had given SEP the task of operating an
up to EUR 44 million annually ( 30 ). The measure thus
economic service of general interest, namely the
constitutes an advantage to these energy-intensive busi
task of collecting the charge (paragraph 68);
nesses.
5.1.2. State resources and imputability
(c) SEP was not entitled to use the proceeds from the
It is settled case-law that an advantage can be categorised
charge for purposes other than those provided for by
as State aid under Article 107(1) TFEU only if it is
the law, and it was strictly monitored in carrying out
granted directly or indirectly through State resources
its task (paragraph 69).
and the use made of the resources is imputable to the
State ( 31 ).
(65) The
judgment
made
it
clear
that
the
measure
in
question
(60) In
that
regard
Austria
puts
forward
a
twofold
argument.
differed from that considered in PreussenElektra, because
First, the funds under the control of OeMAG do not
there ‘the undertakings had not been appointed by the
constitute State resources. Second, even if the funds
State to manage a State resource, but were bound by an
under the control of OeMAG do constitute State
obligation to purchase by means of their own financial
resources, the reduction in OeMAG’s revenues due to
resources’ ( 33 ). In its opening decision of 22 July 2009
the exemption mechanism does not reduce State
the Commission observed that OeMAG had been set up
resources, because there is no involvement of the State
and licensed by the Austrian State, and in its founding
at the level below OeMAG (i.e. at the level of the energy-
documents had been given the task of administering the
intensive consumers and electricity distributors).
resources needed to support green electricity. The
Commission concluded that the fact that OeMAG was
(61) The Commission observes that the exemption
private was not enough to show that the measure did
mechanism for energy-intensive businesses reduces the
not involve State aid. In particular, the notified measure
revenues of the settlement centre — OeMAG — as the
was not comparable to the scheme in PreussenElektra. The
electricity suppliers are not obliged to purchase green
PreussenElektra case was concerned with relations between
electricity for those energy-intensive businesses that
private undertakings, without the involvement of any
have been granted an exemption, and the direct
intermediate body, whereas the Green Electricity Act in
payment made to OeMAG by the energy-intensive busi
Austria had given OeMAG the task of collecting and
nesses is lower than what OeMAG would have received
distributing the funds intended for the generation of
had the energy-intensive businesses not been exempted.
green electricity.
(62) Accordingly,
the
Commission
needs
to
establish
whether
the resources which on the basis of the Green Electricity
(66) The
Court
also
distinguished
the Essent case from the
Act are under the control of the settlement centre, that is
cases of Pearle and PreussenElektra: in Pearle, the funds
OeMAG, constitute State resources. If that is the case, the
collected by a professional body were used not for a
measure under assessment leads to a reduction in State
policy decided by the public authorities, but for a
revenue, and is therefore financed from State resources.
private advertisement campaign; while in PreussenElektra,
private electricity undertakings which were required to
(63) In
the Essent case (
purchase renewable electricity at a fixed price were

32 ), SEP, an undertaking owned by a
number of Dutch electricity generating companies, had
using their own resources, and not the proceeds of a
been entrusted by the State with a public service obli
charge they had collected on behalf of the State
gation to collect revenues from a surcharge imposed on
(paragraphs 72–74).
the users of the electricity grid. The law allowed SEP to
use the revenues of the surcharge only for the purpose
set out in the law, that is to say in order to defray
stranded costs incurred by the electricity undertakings
(67) In the present case, therefore, the Commission must
in the context of the liberalisation of the electricity
assess whether OeMAG has been designated by the
market.
State to collect and administer a charge, as SEP was, or
whether it is using its own funds, as the undertakings in
PreussenElektra were ( 34 ).
(64) The
Court
of
Justice
found
that
the
surcharge
collected
by SEP constituted a State resource, because the
following conditions were met:
(68) Presence
of
a
charge: The Commission first needs to
(a) the surcharge was a charge imposed upon private
establish whether the money collected by OeMAG
entities by an act of public authority (paragraphs
constitutes a charge. Sections 10 and 19 of the Green
47–66 of the judgment);
Electricity Act require electricity suppliers to purchase a
certain volume of renewable electricity at a price above
the market price, called the ‘clearing price’ (Verrechnung
( 30 ) Austrian submission of 9 September 2010, replying to the
spreis). Section 22b of the Act states that the level of the
Commission’s request for information of 19 July 2010.
( 31 ) Case C-482/99 France v Commission (‘Stardust Marine’) [2002] ECR
I-4397, paragraph 24.
( 33 ) Essent, paragraph 74.
( 32 ) See footnote 14.
( 34 ) To this effect see also Essent, paragraph 74.

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L 235/50
EN
Official Journal of the European Union
10.9.2011
clearing price is to be set annually by order of the Federal
(73) The
Commission
concludes
that
OeMAG
has
to
use
the
Minister for Economic Affairs and Labour, and goes on
funds for a purpose designated by law, and that the State
to lay down default values. The difference between the
exercises strict control over their use.
market price for electricity and the clearing price, which
is set by an act of public authority, constitutes a charge
on electricity. In the present case the charge is not paid
to other market players engaged in ordinary commercial
business, as it was in PreussenElektra, which led the Court
(74) In
line
with
the Essent and Steinike cases, the Commission
to find that no State resources were involved. Here
concludes that the funds collected and administered by
payments are made to a body that has the specific task
OeMAG constitute State resources.
of collecting and distributing these funds solely for
purposes in the public interest.
(75) Austria
has
presented
a
series
of
arguments
in
support
of
its view that the situation of OeMAG is comparable to
that in PreussenElektra rather than that in Essent. It will be
shown in the following recitals that these arguments do
(69) Designation of a private body to collect and
not withstand scrutiny.
administer the charge: The Act provides that the
charge is to be levied, not by the State, but by a legal
entity that holds a concession to act as a settlement
centre. A concession to act as settlement centre for the
whole of Austria is currently held by OeMAG. The
(76) The Commission observes first of all that Austria
concession gives OeMAG the public service obligation
compares the Green Electricity Act to the German
of collecting a charge in the form of the clearing price
Renewable Energy Act, as it was earlier and as it is
from all electricity suppliers.
now, citing the judgment of the Court of Justice in Preus
senElektra ( 35 ). But that comparison is not relevant to the
question at issue here. In the present Decision the
Commission is examining only the proposed measure,
and will not try to assess the German or any other
similar legislation: each case must be dealt with on its
own merits. With reference to the arguments put
(70) Electricity
suppliers
are
generally
free
to
pass
that
charge
forward, however, it must be observed that the
on to electricity consumers, and from an economic point
Austrian legislation differs substantially from the
of view it can be assumed that they will normally do so.
German Act that was considered in PreussenElektra. In
However, the Act prohibits them from passing the charge
PreussenElektra the Court of Justice found that only
on to those energy-intensive businesses which have been
advantages granted directly by the State or by a private
exempted in accordance with Section 22c of the Act
body designated or established by the State could involve
from the obligation to purchase renewable electricity.
the use of State resources. The Court then found that the
purchase obligation imposed on private electricity supply
undertakings did not involve any direct or indirect
transfer of State resources. The scheme notified here is
thus not identical to the scheme considered in PreussenE
lektra. As it said in its opening decision of 22 July 2009,
the Commission takes the view that the Austrian scheme
(71) The Commission concludes that OeMAG has been
involves the use of resources that are imputable to the
entrusted by the State with an economic service of
State. The Austrian scheme differs from the German one
general interest, namely collecting and administering
in particular in that it provides for an intermediate body
the charge.
such as OeMAG which is designated by the State, and the
State monitors and checks the collection and distribution
of the resources administered by that body. The
Commission also finds that the Austrian scheme may
allow direct payments from the State to OeMAG.
(72) Control of the funds and use for a purpose
( 35 ) Case C-379/98 PreussenElektra [2001] ECR I-2099. The Court of
designated by law: Section 23 of the Act requires
Justice had to consider the German feed-in tariff system of 1998;
OeMAG to hold the revenues from the clearing price
it found that the scheme did not involve State aid. The German Act
in a dedicated bank account. The funds collected on
directly regulated relations between producers of green electricity
and electricity distributors by requiring private electricity
this account can be used only for the purpose of
distributors to buy electricity produced from renewable sources in
purchasing renewable electricity. OeMAG must grant
their area of supply at a minimum price known as the ‘feed-in tariff’
access at any time to all documents concerning the
(Einspeisetarif). Distributors were then free to decide how the addi
account to the Federal Ministry of Economic Affairs
tional cost of green electricity should be recovered from consumers.
and Labour or to the Austrian Court of Auditors. Irre
To ensure that purchases of green electricity were shared fairly,
spective of the ownership structure of OeMAG, Section
energy undertakings had to compensate one another for the
volumes of green electricity bought. This gave them larger or
15 of the Act also requires the Court of Auditors to carry
smaller volumes of green electricity purchased depending on their
out ex post audits of OeMAG.
market shares.

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EN
10.9.2011 Official
Journal
of
the
European
Union L
235/51
(77) With
regard
to
the
current
German
Renewable
Energy
nesses from the purchase obligation, the Commission
Act, it should be observed that that measure is not the
points out that, as Advocate-General Mengozzi
subject of this Decision; the Commission has not yet
explained in point 109 of his opinion in Essent, the
made an assessment of it, and consequently cannot
fact that the body designated to collect and administer
enter into detailed consideration of a supposed analogy
the charge enjoys no discretion is without bearing on the
between the Austrian Green Electricity Act and the
question whether these funds constitute State resources.
current German Renewable Energy Act.
(78) Austria
argues
furthermore
that
OeMAG
is
a
private
(84) Austria’s
last
argument
is
that
the
overall
amount
of
undertaking, and not a body governed by public law
money the electricity suppliers pay to OeMAG is not
like the corporations that were discussed in the
affected by the exemption mechanism, which changes
judgments in Air France and Salvat Père. The Austrian
only the distribution of the overall amount between
authorities can exercise control over OeMAG only by
the different categories of final electricity consumers;
verifying its accounts ex post and by withdrawing its
the Commission observes that the fact that a loss of
concession.
State revenues may be offset by an increase in State
revenues from other sources has no bearing on the
question whether State resources are being used. What
(79) The Commission points out in this regard that it is clear
is decisive is that an undertaking enjoys an advantage,
from the judgment in Essent that where the State
and that this advantage reduces the revenues to the State
designates a body to collect and administer the
from that undertaking. It is obvious that the State will
revenues of a charge, there is no need to draw any
ultimately have to find other sources of revenue to make
distinction according to whether that body is public or
good the shortfall.
private. In its findings the Court did not give any indi
cation as to whether SEP was publicly or privately
owned; it follows that this fact was not relevant to its
(85) The Commission concludes that the facts in the present
judgment. This is in line with point 106 of the
case correspond to the facts considered in Essent and
conclusions of Advocate-General Mengozzi in Essent,
Steinike: all the tests for the presence of State resources
and with the judgment of the Court of Justice in
established in Essent and Steinike are satisfied. The
Steinike ( 36 ).
measure being assessed is therefore financed from State
resources.
(80) Therefore,
the
fact
that
OeMAG
is
a
privately
controlled
undertaking does not preclude the presence of State
resources. The decisive question is whether it has been
(86) The use of the funds under the control of OeMAG is
designated by the State to collect a charge and administer
regulated by law, namely by the Green Electricity Act.
it.
The use of the funds is therefore imputable to the State.
(81) Austria
further
argues
that
the
State
budget
does
not
cover any losses that may be made by OeMAG, and
C o n c l u s i o n
that the role of the public authorities is limited to
(87) It follows that the exemption mechanism leads to a loss
setting the prices for the purchase and sale of
of State resources, and is imputable to the State.
renewable electricity; there is therefore no burden on
the State budget of the kind that was shown in Sloman
Neptun and Pearle.
5.1.3. Selectivity of the measure
(88) The
Commission
points
out
that
even
if
the
measure
(82) The
Commission
observes
that
it
was
shown
in Essent
might in theory appear to be neutral in terms of both
that money at the disposal of a private entity that had
undertakings and economic sectors, it may still be
been designated by the State to collect and administer a
selective in practice.
charge constituted a State resource. Accordingly, a
reduction in the level of the charge paid by certain
undertakings subject to the charge is sufficient to
constitute a burden on the State.
(89) Austria argues that the exemption mechanism does not
constitute State aid since it is not selective but is a
general measure open to all undertakings and sectors.
(83) With
regard
to
the
Austria’s
argument
that
E-Control
First, Austria submits that the 0,5 % threshold in the
enjoys no discretion in exempting energy-intensive busi
notified scheme does not impose any restriction in
terms of specific industries, size of undertaking or
other selective criteria ( 37 ). Second, Austria has found
( 36 ) Case 76/78 Steinike & Weinlig v Germany [1977] ECR 595,
paragraph 21: ‘The prohibition contained in Article 92(1) covers
that the measure in fact affects 2 300 undertakings in
all aid granted by a Member State or through State resources
19 different sectors; it says this shows that the measure
without its being necessary to make a distinction whether the aid
is indeed open to all undertakings and sectors of the
is granted directly by the State or by public or private bodies
economy.
established or appointed by it to administer the aid. In applying
Article 92 regard must primarily be had to the effects of the aid on
the undertakings or producers favoured and not the status of the
( 37 ) Austria provided this data on the basis of experience with the
institutions entrusted with the distribution and administration of
application of an adapted version of the scheme, with aid intensities
the aid’.
below the notification thresholds.

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L 235/52
EN
Official Journal of the European Union
10.9.2011
T h e 0 , 5 % t h r e s h o l d
the existing scheme of energy tax rebates. The Austrian
court submitted two questions. First, it asked whether the
(90) A
measure
is
selective
if
it
favours
only
certain
under
fact that under the existing scheme the tax rebate was
takings or the production of certain goods. It is not
granted only to undertakings engaged in the production
selective if it applies to all undertakings in national
of goods meant that the rebate was selective. Second, it
territory, regardless of their activity.
raised the hypothetical question how the Court would
assess a tax rebate that was not confined to undertakings
engaged primarily in the production of goods but applied
to all undertakings, regardless of their activity.
(91) The Commission finds that the fact that there is only a
0,5 % threshold does not suffice to qualify the notified
scheme as a general measure. On the contrary, the
Commission finds that as a result of this threshold not
all undertakings in the national territory can take
(94) On the first question, the Court found that the restriction
advantage of the notified measure.
of the tax rebate to manufacturers did make the measure
selective. In view of the hypothetical nature of the second
question, that is to say how it would assess a tax rebate
open to all sectors of the economy, the Court answered
in rather general terms. It said that a measure was
selective if it favoured certain undertakings or the
production of certain goods, and was not selective if it
benefited all undertakings in national territory without
(92) Austria has submitted that the notified measure is
distinction ( 40 ). The Court concluded that national
reserved for undertakings whose costs increase by more
measures did not constitute State aid ‘if they apply to
than 0,5 % of their net production value as a result of
all undertakings in national territory, regardless of their
their contribution to the support of green electricity. The
activity’ ( 41 ). The Court did not give any indication
Commission notes that these conditions are very similar
whether a measure subject to a 0,35 % threshold
to the requirements of the definition of an ‘energy-
should be considered to be applicable to all undertakings.
intensive business’ in Article 17(1)(a) of the Energy Tax
This was noted by Advocate-General Jacobs in his
Directive ( 38 ). Austria argues that the 0,5 % threshold
opinion in a subsequent case before the Court: ‘the
does not suffice to qualify the notified measure as
effect of the 0,35 % threshold was not examined by
selective. In Austria’s view this conclusion is supported
the Court of Justice in Adria-Wien’ ( 42 ). The Court did
by the judgment of the Court of Justice in Adria-Wien
not need to decide whether the exemption mechanism
Pipeline. In that judgment the Court had to consider a
as such (i.e. without the restriction to undertakings
partial reimbursement of an energy tax which was
engaged primarily in the production of goods) was
granted to firms if the tax exceeded 0,35 % of their net
selective de facto. Thus the Court did not rule out the
production value. The Court held that ‘National measures
possibility that the 0,35 % threshold might be selective if
which provide for a rebate of energy taxes on natural gas
it had the effect that in practice the measure was not
and electricity do not constitute State aid within the
open to all undertakings in national territory.
meaning of Article 92 of the EC Treaty [now
Article 107 of the TFEU] … where they apply to all
undertakings in national territory, regardless of their
activity’ ( 39 ).
(95) Indeed the Commission takes the view that the Court
gave some indication that such a threshold could be
selective even if the measure was open to a number of
different sectors. In its reply to the second question, the
(93) However,
the
Commission
considers
that
that
judgment
does not preclude a finding of selectivity with regard to
Court said in particular that ‘neither the large number of
the 0,5 % threshold in the case at hand. The judgment
eligible undertakings nor the diversity and the size of the
was a preliminary ruling, given in response to an appli
sectors to which those undertakings belong provide any
cation by an Austrian court which was concerned with
grounds for concluding that a State initiative constitutes
a general measure of economic policy’ ( 43 ). According to
the case-law, many measures that are not sector-specific
( 38 ) Article 17(1)(a) of the Energy Tax Directive states that ‘An “energy-
can be regarded as selective if de facto they are not open
intensive business” shall mean a business entity, as referred to in
Article 11, where either the purchases of energy products and
electricity amount to at least 3,0 % of the production value or
( 40 ) Adria-Wien Pipeline, paragraphs 34–35.
the national energy tax payable amounts to at least 0,5 % of the
( 41 ) Adria-Wien Pipeline, paragraph 36.
added value.’
( 42 ) Opinion of Advocate-General Jacobs in Case C-368/04 Transalpine
( 39 ) Case C-143/99 Adria-Wien Pipeline [2001] ECR I-8365,
lleitung, point 72.
paragraph 36.
( 43 ) Adria-Wien Pipeline, paragraph 48.

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EN
10.9.2011 Official
Journal
of
the
European
Union L
235/53
to all undertakings in national territory ( 44 ). It follows
(98) The
Commission
concludes
that
the
0,5
%
threshold
at
that even measures which are open to all sectors can
issue in the present case is a selection criterion which
be considered selective on the grounds that de facto
limits the benefit of the notified measure to energy-
they are not open to all undertakings in the territory
intensive undertakings and excludes undertakings which
concerned.
are not energy-intensive. Irrespective of the number of
sectors that qualify, the threshold means that not all
undertakings in the national territory can benefit under
the notified measure. Consequently, the threshold renders
the notified measure selective.
(96) This
view
is
also
reflected
in
a
Commission
decision
on

the Austrian energy tax rebate
( 45 ). Following the
judgment of the Court of Justice that has just been
discussed, Austria broadened the measure to include
undertakings from all sectors. In its assessment of the
amended scheme, however, the Commission found that
the measure was still selective, because even if formally
(99) The
Commission
also
observes
that
to
qualify
for
the
speaking the rebate was open to all undertakings, in
exemption mechanism under assessment here, under
practice the only undertakings that would benefit
takings must be eligible for an energy tax rebate under
would be those with a high energy consumption in
the Austrian Energy Tax Rebate Act, which was the
relation to their net production value
(
subject of the Commission decision on the Austrian

46 ). The
Commission concluded that the tax rebate constituted
energy tax rebate. The Commission’s reasoning in that
unlawful (i.e. not notified) State aid, and was incom
decision consequently applies mutatis mutandis to the
patible with the internal market (
present case.

47 ).
(97) The
effects
of
the
Commission
decision
subsequently
led
an Austrian administrative court to request a preliminary
F o c u s o n t h e p r o d u c t i o n o f g o o d s
ruling from the Court of Justice ( 48 ). The questions
submitted by the Austrian court related to the scope of
(100) As regards Austria’s second line of argument, the
the effects of the illegality of the tax rebate, and the
Commission finds that the notified measure is selective
Court of Justice did not reopen the issue of selectivity.
also because in practice it focuses primarily on a limited
The question was however discussed by the Advocate-
number of undertakings active in the production of
General. In his opinion the Advocate-General said that ‘as
certain energy-intensive goods. According to the case-
the Commission points out, to grant rebates only to
law of the Court of Justice, a measure must be
service undertakings (in addition to production under
analysed not by reference to its causes or aims but in
takings) not excluded by the 0,35 % threshold would
relation to its effects ( 51 ). This means that even though in
be simply to enlarge the circle of beneficiaries of the
formal terms a measure is open to all sectors and all
aid. It would not however deprive the aid of its effects
undertakings, it may still be considered selective if it is
as such, since a criterion of selectivity would remain’ (
not open to all undertakings in national territory in

49 )..
He also took the view that ‘The Commission’s reasoning
practice. The Court of Justice has held that ‘Neither the
in its 2004 decision is convincing as regards the selective
high number of benefiting undertakings nor the diversity
nature of the 0,35
% threshold in the amended
and importance of the industrial sectors to which those
scheme’ (
undertakings belong warrant the conclusion that [a]

50 ).
scheme constitutes a general measure of economic
policy’ ( 52 ).
( 44 ) The Court of First Instance had to consider an aid scheme in the
Basque country which took the form of a tax credit for investments
over a threshold of ESP 2 500 million: it held that the scheme was
de facto selective because the tax concession was available only to
undertakings with significant financial resources (Joined Cases T-
92/00 and T-103/00 Diputación Foral de lava and Others v
Commission [2002] ECR II-1385, paragraph 39 (an appeal against
(101) In its investigation the Commission found that the
this judgment was dismissed by the Court of Justice in Joined Cases
notified scheme focused primarily on a very few under
C-186/02 P and C-188/02 P Ramondín SA and Others v Commission
[2004] ECR I-10653, paragraphs 60 ff.). In another case the Court
takings, most of which were engaged in the production
of Justice found that an aid scheme for the purchase of commercial
of goods. On 9 September 2010 Austria submitted data
vehicles was selective de facto in particular because it excluded large
gathered on the basis of the scheme as it currently
enterprises (Case C-409/00 Spain v Commission [2003] ECR I-1487,
applied, that is to say with aid intensities below the
paragraph 50).
notification thresholds. Of the approximately 300 000
( 45 ) Commission Decision 2005/565/EC of 9 March 2004 on an aid
undertakings in Austria, according to this information,
scheme implemented by Austria for a refund from the energy taxes
on natural gas and electricity in 2002 and 2003, recitals 47 to 49
the number that applied for benefits under the scheme
(OJ L 190, 22.7.2005, p. 13).
was only about 2 000, or less than 1 % of all Austrian
( 46 ) Decision 2005/565/EC, recital 46.
undertakings. As the scheme was applied, approximately
( 47 ) Decision 2005/565/EC, recitals 68 to 70.
66 % of the benefits went to undertakings in the
( 48 ) Case C-368/04 Transalpine lleitung [2006] ECR I-9957.
( 49 ) Opinion of Advocate-General Jacobs in Case C-368/04 Transalpine
lleitung, point 73.
( 51 ) Case 173/73 Italy v Commission [1974] ECR 709, paragraph 13.
( 50 ) Opinion of Advocate-General Jacobs in Transalpine lleitung,
( 52 ) Case C-75/97 Belgium v Commission [1999] ECR I-3671,
point 72.
paragraph 32.

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10.9.2011
‘production of goods’ ( 53 ). The Commission observes that
the other, the mechanisms inherent in the tax system
if Austria were to increase the aid intensities above the de
itself which are necessary for the achievement of such
minimis thresholds under which the scheme is provi
objectives’. It is only the latter mechanisms that can be
sionally operating, the measure would most probably
justified by the nature or the general scheme of the tax
focus even more on undertakings active in the
system of which the measure is part ( 57 ). Any extrinsic
production of goods. This is demonstrated by the fact
objectives have to be considered at the stage when the
that, on the basis of the information provided by Austria,
aid is being assessed for compatibility ( 58 ).
only 12 undertakings would benefit from aid intensities
higher than under the version of the scheme currently
applying, and that of these only two operate in the
transport sector, while 10 are engaged in the production
of goods (
(106) Austria considers that the differentiation of charges

54 ).
introduced by Section 22c of the Act is intended to
allow for the varying capacity of undertakings to bear
additional charges. Austria also takes the view that the
exemption mechanism does not impair the environ
(102) The Commission concludes that the notified scheme will
mental benefits provided for by the Act, since the
provide little or no benefit to the majority of the sectors
amount of aid available to support the production of
of the Austrian economy, and will benefit mainly under
green electricity is not reduced. Austria contends that
takings active in one of the branches of the production
only by reducing environmental charges for certain busi
of goods. Irrespective of the number of sectors in which
nesses is it possible to establish a sustainable financing
undertakings might benefit as a result of the measure, the
mechanism for green electricity, which is necessary in
measure focuses mainly on undertakings active in the
order to ensure support for renewable energy sources.
production of goods, and is therefore to be considered
selective de facto.
(107) The Commission notes in this regard that the intrinsic
objective of the system established by the clearing price is
to raise revenues for the specific purpose of promoting
C o n c l u s i o n
renewable energy. The exemption mechanism, however,
(103) The Commission concludes that the notified exemption
pursues the objective of improving the competitiveness
mechanism is selective, both because it provides for a
of energy-intensive businesses by reducing their elec
0,5 % threshold, which confines the measure to energy-
tricity price, and thereby improving the acceptability of
intensive undertakings, and because those undertakings
the system based on the clearing price. This objective is
are active primarily in the production of goods.
extrinsic to the rationale and general scheme of the
system.
M e a s u r e s j u s t i f i e d b y t h e n a t u r e a n d
(108) The Court of Justice has held that the pursuit of such an
g e n e r a l s c h e m e o f t h e s y s t e m
extrinsic objective cannot be relied upon to justify a
(104) The Commission notes that even where a measure has a
measure by reference to the nature or general scheme
selective character it does not fulfil the condition of
of the tax system ( 59 ). It can be analysed only when the
selectivity if it is justified by the nature or the general
aid has to be assessed for compatibility ( 60 ).
scheme of the system of which it is part ( 55 ). The Court
of Justice has consistently held that it is for the Member
State to demonstrate that this is so ( 56 ).
(109) In support of its view that the exemption mechanism is
justified by the rationale and general scheme of the
system, Austria cites two State aid decisions; but there
the situation was different. State aid measure No N
(105) According to the Court, ‘a distinction must be made
271/06, the Danish tax on surplus heat, sought not to
between, on the one hand, the objectives attributed to
improve competitiveness but to place the tax treatment
a particular tax scheme which are extrinsic to it and, on
of all energy products on an equal footing. State aid
measure No N 860/06, the German energy tax
( 53 ) Within this sector there is a certain concentration on subsectors
exemption for dual-use processes, was based on the
such as the production of wood, paper, food, glass, ceramics, metals
principle that energy products should be taxed only
and chemicals.
when they were used for heating or fuel purposes.
( 54 ) Austria’s submission of 9 September 2010 (p. 17 and Table 5 on p.
17), replying to the Commission’s request for information of
19 July 2010.
( 57 ) See footnote 56.
( 55 ) Case 173/73 Italy v Commission [1974] ECR 709, paragraph 33;
( 58 ) Case C-487/06 P British Aggregates Association v Commission [2008]
Case C-75/97 Belgium v Commission [1999] ECR I-3671, paragraphs
ECR I-10505, paragraphs 84–92.
28–31; Case C-143/99 Adria-Wien Pipeline [2001] ECR I 8365,
( 59 ) Case C-88/03 Portugal v Commission (cited in footnote 31),
paragraph 41.
paragraph 82, which refers to regional development and social
( 56 ) Case C-88/03 Portugal v Commission [2006] ECR I-7115,
cohesion as extrinsic political objectives.
paragraph 81.
( 60 ) See footnote 58.

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(110) It follows that the notified exemption for energy-
(116) In aid cases falling under Article 107(3) TFEU the
intensive industries is not justified by the nature or
Commission has wide discretion ( 64 ). In the exercise of
general scheme of the system of which it is part.
its discretion it has issued guidelines and notices setting
forth criteria for declaring certain types of aid compatible
with the internal market under Article 107(3) TFEU. The
Court of Justice has consistently held that the
Commission is bound by the guidelines and notices
C o n c l u s i o n
that it issues in the area of supervision of State aid
(111) The Commission concludes that the notified measure
where they do not depart from the rules in the Treaty
fulfils the condition of selectivity because it is selective
and are accepted by the Member States ( 65 ).
de facto and is not justified by the nature and general
scheme of the system.
5.1.4. Distortion of competition and impact on trade
(117) In the first place, therefore, it must be considered

whether the notified aid falls within the scope of one
(112) The beneficiaries of the measure, which in the
or more sets of guidelines or notices, and can be
Commission’s view constitutes operating aid, are for
declared compatible with the internal market because it
the most part engaged in the production of energy-
satisfies the tests of compatibility set out therein.
intensive goods such as metal or paper products ( 61 ).
These are industries where there is trade between
Member States, and undertakings in one Member State
are subject to competition from undertakings in others.
The measure in question is therefore liable to distort
competition and to affect trade in the internal market.
(118) Austria claims that the notified measure falls within the
scope of the Environmental Aid Guidelines ( 66 ), or that
the Environmental Aid Guidelines are applicable by
analogy. In addition, it also claims that the aid falls
5.1.5. Conclusion
within the scope of the General Block Exemption Regu
lation ( 67 ).
(113) The Commission concludes that the exemption
mechanism constitutes State aid within the meaning of
Article 107(1) TFEU, because it has the effect of reducing
State resources and thereby conferring a selective
advantage on energy-intensive businesses. Consequently,
the measure has the potential to affect trade between
(119) However, there are clearly defined situations in which
Member States and to distort competition in the
operating aid may be granted. In particular, operating
internal market.
aid in the form of reductions of taxes may be granted,
on specific conditions, under Chapter 4 of the Environ
mental Aid Guidelines ( 68 ) or under Article 25 of the
General Block Exemption Regulation ( 69 ). Under certain
5.2. Lawfulness of the aid
conditions aid may also be assessed directly under
Article 107(3)(c) TFEU.
(114) Austria has undertaken not to put the aid into effect until
the European Commission has approved it. Austria
notified the measure before putting it into effect, and
has thus complied with its obligation under
Article 108(3) TFEU ( 62 ).
5.3.1. The Environmental Aid Guidelines
(120) The Environmental Aid Guidelines define their scope of
5.3. Compatibility of the aid
application as follows (


70 ):
(115) Under Article 107(3) TFEU the Commission may declare
( 64 ) Case C-142/87 Belgium v Commission [1990] ECR I-959, paragraph
State aid compatible with the internal market. It is settled
56; Case C-39/94 Syndicat franais de l’Express international (SFEI) and
case-law that the burden of proof for demonstrating that
Others v La Poste and Others [1996] ECR I-3547, paragraph 36.
a measure is compatible lies on the Member State (
( 65 ) Case C-313/90 Comité International de la Rayonne et des Fibres Synthé

63 ).
tiques (CIRFS) and Others v Commission [1993] ECR I-1125,
paragraph 36; Case C-311/94 Ijssel-Vliet Combinatie BV v Minister
( 61 ) See footnote 54.
van Economische Zaken [1996] ECR I-5023, paragraph 43; Case
( 62 ) Pending a final Commission decision, Austria has been granting the
C-351/98 Spain v Commission [2002] ECR I-8031, paragraph 53.
benefit of the exemption mechanism as de minimis aid.
( 66 ) See footnote 3.
( 63 ) Case C-364/90 Italy v Commission [1993] ECR I-2097, paragraph
( 67 ) Regulation (EC) No 800/2008.
20; Joined Cases T-132/96 and T-143/96 Freistaat Sachsen and
( 68 ) See footnote 3.
Others v Commission [1999] ECR II-3663, paragraph 140; Case
( 69 ) Regulation (EC) No 800/2008.
C-372/97 Italy v Commission [2004] ECR I-3679, paragraph 81.
( 70 ) See footnote 3.

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‘(58) These Guidelines apply to State aid for environ
cap. The average electricity price paid by energy-intensive
mental protection. They will be applied in
businesses consequently decreases for each additional
accordance with other Community policies on
kilowatt-hour they consume above the threshold.
State aid, other provisions of the Treaty estab
Rather than encouraging energy efficiency, the
lishing the European Community and the Treaty
exemption mechanism actually reduces it.
on European Union and legislation adopted
pursuant to those Treaties.
(125) The Commission concludes that the exemption
(59) These Guidelines apply to aid to support environ
mechanism does not fall within the scope of the Envi
mental protection in all sectors governed by the EC
ronmental Aid Guidelines.
Treaty. They also apply to those sectors which are
subject to specific Community rules on State aid
(steel processing, shipbuilding, motor vehicles,
synthetic fibres, transport, coal agriculture and
fisheries) unless such specific rules provide
(126) But even if the measure did fall within the scope of the
otherwise.’
Guidelines — which it does not — the Commission
observes that it could not be declared compatible on
this basis, as the tests of Chapter 4 of the Guidelines
are not satisfied, for the following reasons.
(121) Point 70(1) of the Guidelines defines ‘environmental
protection’ as ‘any action designed to remedy or
prevent damage to physical surroundings or natural
resources by a beneficiary’s own activities, to reduce
the risk of such damage or to lead to more efficient
(127) For purposes of the assessment of compatibility, Chapter
use of natural resources, including energy-saving
4 of the Guidelines distinguishes between harmonised
measures and the use of renewable sources of energy’.
and non-harmonised environmental taxes. The parafiscal
Point 151 states that for a measure to fall within the
levy represented by the clearing price is not an environ
scope of the Guidelines it is enough that it should
mental tax that has been harmonised at Union level. The
improve the level of environmental protection indirectly.
Renewable Energy Directive sets obligatory targets for

renewable energy, but leaves it to the Member States
to decide how they achieve these targets.
(122) Austria considers that the exemption mechanism
contributes indirectly to environmental protection, for
two reasons: it is a necessary precondition for ensuring
(128) The exemption mechanism would therefore have to be
political support for increasing the clearing price to a
assessed under the rules for non-harmonised environ
higher level, which is necessary to finance the further
mental taxes in Chapter 4 of the Guidelines (
increase in the production of renewable electricity; and

72 ).
it increases the price of electricity use, thereby giving an
incentive to be more energy-efficient.
(129) According to those provisions, the Member State has to
provide information on the respective sectors or
(123) On the first argument, the Commission observes that
categories of beneficiaries covered by the exemptions
there is no necessary link between the clearing price
or reductions, on the situation of the main beneficiaries
and an increase in the level of production of renewable
in each sector concerned and on how the taxation may
electricity. By virtue of Directive 2009/28/EC of the
contribute to environmental protection. The exempted
European Parliament and of the Council of 23 April
sectors should be properly described, and a list of the
2009 on the promotion of the use of energy from
largest beneficiaries for each sector should be provided
renewable sources and amending and subsequently
(considering notably turnover, market shares and size of
repealing Directives 2001/77/EC and 2003/30/EC (‘the
the tax base) ( 73 ). On the basis of this information the
Renewable Energy Directive’) ( 71 ), Austria is under an
Commission has to assess whether the reductions of or
obligation to increase production of electricity from
exemptions from environmental taxes are necessary and
renewable sources. It is, however, free to choose how
proportional. With regard to necessity, the choice of
it wishes to finance this. It could, for example, use tax
beneficiaries must be based on objective and transparent
revenues. Thus the exemption mechanism is not
criteria, and the environmental tax without reduction
necessary in order to increase production of renewable
must lead to a substantial increase of production costs
energy.
that cannot be passed on to consumers without leading
to important sales reductions ( 74 ). With regard to propor
tionality, the Member State has to demonstrate that each
(124) With regard to the second argument, the Commission
observes that the exemption mechanism functions as a
( 72 ) As explained above, the Commission considers that the feed-in
tariff is clearly not a harmonised environmental tax.
( 73 ) Point 156 of the Guidelines.
( 71 ) OJ L 140, 5.6.2009, p. 16.
( 74 ) Point 158 of the Guidelines.

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individual beneficiary pays a proportion of the national
harmonised energy taxes under Chapter 4 of the Envi
tax level which is broadly equivalent to its environmental
ronmental Aid Guidelines were applied to parafiscal
performance, or at least 20 % of the national tax, unless
levies by analogy.
a lower rate can be justified, and that the reductions or
exemptions are conditional on the conclusion of
agreements aimed at achieving environmental
objectives ( 75 ).
(134) According to the settled case-law of the Court of Justice,
a rule of Union law can be applied by analogy if the
following two conditions are met. First, the rules
applicable to the case must be very similar to the ones
which it is sought to have applied by analogy. Second,
(130) Although the Commission repeatedly asked it to do so,
the rules applicable to the case must contain an omission
however, Austria did not provide this information (
which is incompatible with a general principle of EU law

76 ).
The Commission has consequently been unable to
and which can be remedied by analogy ( 77 ). In view of
assess whether the aid is necessary and proportional or
these conditions, the Commission observes that analogy
how it might contribute to the protection of the
can be invoked in EU law only in exceptional circum
environment.
stances.
S i m i l a r i t y o f t h e r u l e s
5.3.2. Analogy with Chapter 4 of the Guidelines
(135) First,
the rules applicable to the case must be very similar
to the ones which it is sought to have applied by
(131) Given that the notified exemption mechanism does not
analogy. Since Chapter 4 of the Environmental Aid
contribute to environmental protection even indirectly,
Guidelines deals with reductions of or exemptions from
the Commission has considered whether it might be
environmental taxes, the rules governing the notified
approved by analogy with Chapter 4 of the Environ
levies under the Green Electricity Act should be similar
mental Aid Guidelines.
to those applying to environmental taxes.
However, the Commission finds that the legal position
(132) According to Austria, the exemption mechanism can be
with regard to environmental taxes under EU law is not
assessed by analogy with the rules on tax reductions for
comparable to the legal position with regard to parafiscal
harmonised energy taxes set out in points 152– 153 of
levies under EU law. While there are no specific rules in
the Environmental Aid Guidelines. Chapter 4 of the
EU law with regard to parafiscal levies, there are specific
Guidelines provides for two types of assessment of
rules on energy taxes. These include in particular the
reductions of environmental taxes, which may lead to
minimum tax levels set by the Energy Tax Directive,
different conclusions. First, it lays down rules for the
and exceptions to these minimum levels under the
reduction of energy taxes harmonised under the Energy
conditions set out in Chapter 4 of the Environmental
Tax Directive, which can be declared compatible without
Aid Guidelines and Article 25 of the General Block
further analysis provided the minimum tax levels set out
Exemption Regulation. For parafiscal levies there are no
in the Energy Tax Directive are respected. Second, it lays
rules on exemptions or reductions and no rules on
down specific rules for the assessment of reductions of
minimum levels either.
environmental taxes that have not been harmonised and
reductions of harmonised energy taxes that are below the
minimum tax levels set in the Energy Tax Directive. In
either case the Member State has among other things to
provide detailed information on the necessity and
(136) The Commission concludes that the parafiscal levies
proportionality of the measure. Austria argues that the
established under the Austrian scheme are not
Commission could approve the exemption mechanism
governed by rules similar to those which apply to envi
for parafiscal levies on the basis that the beneficiaries
ronmental taxes under EU law.
pay at least the minimum levels of Austrian energy taxes.
O m i s s i o n ( l a c u n a ) i n c o m p a t i b l e w i t h E U
l a w
(133) The Commission observes
that there are no precedents in
(137) Second, the rules applicable to the case must contain an
its own decisions or in the judgments of the European
omission which is incompatible with a general principle
courts in which the rules for the assessment of
of EU law and which can be remedied by analogy.
( 75 ) Point 159 of the Guidelines.
( 77 ) Case 165/84 Krohn v Bundesanstalt für Landwirtschaftliche Mark
( 76 ) Austria did not reply to the questions on this point asked by the
tordnung [1985] ECR 3997, paragraph 14; Case 6/78 Union
Commission on 21 June 2010 and 19 July 2010.
franaise de Céréales v Hauptzollamt Hamburg-Jonas [1978] ECR 1675.

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(138) However, measures which do not fall within the scope of
5.3.3. Analogy with Article 25 of the General Block
the Environmental Aid Guidelines can nevertheless be
Exemption Regulation
assessed under Article 107(3)(c) TFEU. The Commission
has consequently found no omission in the Guidelines
(143) The Commission has also considered whether it could
that might be grounds for assessing the notified measures
approve the exemption mechanism on the basis of an
by analogy. This conclusion is the same whether the
analogy with Article 25 of the General Block Exemption
analogy is to be drawn with harmonised or non-
Regulation.
harmonised taxes.
(139) Furthermore, the absence of rules on exemptions from
(144) Austria takes the view that the differences between the
parafiscal levies could not in any event be remedied by
wordings of Chapter 4 of the Environmental Aid
analogy to the rules that govern reductions of energy
Guidelines and Article 25 of the General Block
taxes under EU law. If the rules governing reductions
Exemption Regulation leave some room for an
of harmonised energy taxes were to be applied by
approval of the measure by analogy with Article 25 of
analogy to non-harmonised parafiscal levies, under
the Regulation. Austria points out that point 152 of the
takings would be able to meet the minimum tax levels
Environmental Aid Guidelines reads as follows:
set in the Energy Tax Directive by paying such parafiscal
levies. Such an approach is therefore not in the spirit of
the Energy Tax Directive. The Commission considers that
the minimum rates in the Energy Tax Directive were set
solely with a view to their application within the
‘In order to be approved under Article 87 of the EC
harmonised energy tax system. Using them as a
Treaty, reductions of or exemptions from harmonised
benchmark outside the harmonised area would give
taxes, in particular those harmonised through Directive
them an application that they were not meant to have.
2003/96/EC, must be compatible with the relevant
The minimum rates were clearly not set with the aim of
applicable Community legislation and comply with the
defining the overall burden that energy-intensive busi
limits and conditions set out therein’,
nesses ought to bear as a result of environmental regu
latory measures, such as in particular those arising out of
financing mechanisms for feed-in tariffs. Such an
approach would also overlook the fact that State aid
policy accepts a lenient attitude to tax exemptions
(145) whereas Article 25 of the General Block Exemption
above a harmonised minimum level because a level
Regulation reads as follows:
playing field is ensured at least to some extent by
compliance with the minimum rates that are applicable
in all Member States. This argument does not apply to
the burdens stemming from feed-in tariff systems, which
are not harmonised, and where any deviation from the
standard contributions can cause distortion of
‘Environmental aid schemes in the form of reductions in
competition.
environmental taxes fulfilling the conditions of Directive

2003/96/EC shall be compatible with the common
market within the meaning of Article 87(3) of the
Treaty and shall be exempt from the notification
(140) It follows that the absence of rules on the reduction of
requirement of Article 88(3) of the Treaty, provided
parafiscal levies does not constitute an omission which is
the conditions laid down in paragraphs 2 and 3 of this
incompatible with a general principle of EU law and
Article are fulfilled’ ( 78 ).
which could be remedied by analogy with the existing
rules on reductions of harmonised energy taxes.
(146) Austria concludes that Article 25 of the Regulation may
(141) In any event, even if those rules could be applied by
be broader in scope than point 152 of the Guidelines.
analogy, the exemption mechanism could not be
While point 152 of the Guidelines may apply only to
considered compatible, for the reasons set out in
taxes harmonised by the Energy Tax Directive, Austria
recitals 129–133.
argues, Article 25 of the Regulation requires only that
the exemption mechanism respect the minimum tax
levels set in the Energy Tax Directive, even if it is not
C o n c l u s i o n
a harmonised energy tax. Article 25 of the Regulation

(142) The Commission concludes that it cannot draw an
( 78 ) Article 25(2) of the General Block Exemption Regulation states that
analogy between the notified exemption mechanism
‘The beneficiaries of the tax reduction shall pay at least the
and the rules for the assessment of reductions of
Community minimum tax level set by Directive 2003/96/EC’ (the
harmonised energy taxes under Chapter 4 of the Envi
Energy Tax Directive). Article 25(3) of the General Block Exemption
ronmental Aid Guidelines, and that it consequently
Regulation states that ‘Tax reductions shall be granted for
maximum periods of 10 years. After such 10-year period,
cannot approve the exemption mechanism on the basis
Member States shall re-evaluate the appropriateness of the aid
of such an analogy.
measures concerned’.

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can therefore be applied to reductions of non-
5.3.4. Compatibility under Article 107(3)(c) TFEU
harmonised environmental taxes, which can be found
compatible provided that the overall taxation system
(149) The Commission notes that Austria has not claimed that
respects the minimum energy tax levels. Austria
the exemption mechanism can be declared compatible
acknowledges that the contributions paid under the
directly on the basis of Article 107(3)(c) TFEU. It is for
Green Electricity Act are not a tax (
the Member State to put forward any grounds of

79 ), but submits
that the notified exemption mechanism can be assessed
compatibility ( 80 ) and to demonstrate that the conditions
and approved by analogy with the provision on environ
thereof are met, and for this reason alone Austria is
mental taxes in Article 25 of the General Block
prevented from relying on this ground of compatibility.
Exemption Regulation.
(150) The Commission has nevertheless considered whether it
could declare the exemption mechanism compatible on
(147) In the Commission’s view, however, there is no scope for
this legal basis.
an analogy with Article 25 of the General Block
Exemption Regulation. First, the rules applicable to the
case are not similar to the ones which it is sought to
have applied by analogy. The wording of Article 25 of
the General Block Exemption Regulation clearly indicates
that the Article applies only to environmental taxes
harmonised under the Energy Tax Directive. Classifi
(151) Article 107(3)(c) TFEU states that ‘aid to facilitate the
cation as an energy tax is thus a ‘condition’ for the
development of certain economic activities or of certain
applicability of Article 25 of the Regulation. This inter
economic areas, where such aid does not adversely affect
pretation is supported by the fact that it follows from the
trading conditions to an extent contrary to the common
rationale of the system of the General Block Exemption
interest’ may be considered to be compatible with the
Regulation that it cannot have a scope wider than the
internal market. According to the case-law, the
Environmental Aid Guidelines to which it refers.
Commission may declare State aid compatible with the
Article 25 of the Regulation therefore clearly applies
internal market if the aid contributes to the attainment of
only to energy taxes harmonised by the Energy Tax
an objective of common interest ( 81 ), is necessary for the
Directive. As explained above, the contributions paid
attainment of this objective ( 82 ), and does not adversely
under the Green Electricity Act are not environmental
affect trading conditions to an extent contrary to the
taxes, and the rules of the Energy Tax Directive do not
common interest.
apply to them. It follows that the rules governing energy
taxes are not similar to the rules governing the Austrian
feed-in tariffs. Second, the rules applicable to the case do
not contain an omission which is incompatible with a
general principle of EU law and which can be remedied
by analogy. Tax reductions or similar measures which are
not covered by the General Block Exemption Regulation
(152) Accordingly, it is established Commission practice that
are not automatically incompatible with EU law: they
measures may be declared compatible directly under
merely have to abide by the general obligation to
Article 107(3)(c) TFEU if they are necessary and propor
notify under Article 108 TFEU. They can then be
tionate and if the positive effects for the common
assessed and found compatible under the Environmental
objective outweigh the negative effects on competition
Aid Guidelines, or, if the Guidelines do not apply,
and trade ( 83 ). The Commission considers it appropriate
directly under Article 107(3)(c) TFEU. It follows that
here to ask the following questions:
the rules applicable to the assessment of the Austrian
aid scheme do not contain an omission incompatible
with EU law.
1. Is the aid measure aimed at a well-defined objective of
common interest?
(148) The Commission concludes that it cannot draw an
( 80 ) See footnote 63.
(
analogy between the contributions paid under the

81 ) Case T-162/06 Kronoply v Commission [2009] ECR II-1, especially
paragraphs 65, 66, 74 and 75.
Green Electricity Act and the harmonised energy taxes
( 82 ) Case T-187/99 Agrana Zucker und Strke v Commission [2001] ECR
referred to in Article 25 of the General Block Exemption
II-1587, paragraph 74; Case T-126/99 Graphischer Maschinenbau v
Regulation, that it consequently cannot approve the
Commission [2002] ECR II-2427, paragraphs 41-43; Case C-390/06
exemption mechanism on the basis of such an analogy.
Nuova Agricast [2008] ECR I-2577, paragraphs 68-69.
( 83 ) Community framework for State aid for research and development
and innovation, point 1.3 (OJ C 323, 30.12.2006, p. 1);
( 79 ) Austrian submission of 9 September 2010, p. 19, replying to the
Community guidelines on State aid for environmental protection,
Commission’s request for information of 19 July 2001.
point 1.3 (OJ C 82, 1.4.2008, p. 1).

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2. Is the aid well designed to deliver the objective of
A p p r o p r i a t e p o l i c y i n s t r u m e n t
common interest? In particular:
(157) According to the case-law, ‘operating aid, that is to say,
aid intended to relieve an undertaking of the expenses
which it would itself normally have had to bear in its
(a) is the aid measure an appropriate and necessary
day-to-day management or its usual activities, does not
instrument, or are there other, more suitable
in principle fall within the scope of Article 92(3) [now
instruments?
Article 107(3) TFEU]’ ( 84 ). As the courts have said,
‘According to the relevant case-law, the effect of such
aid is in principle to distort competition in the sectors
(b) is there an incentive effect, or in other words does
in which it is granted, whilst nevertheless being
the aid change the behaviour of undertakings?
incapable, by its very nature, of achieving any of the
objectives of the aforesaid exceptions’ ( 85 ). In the case
at hand the Commission finds that the exemption
mechanism constitutes operating aid, because it relieves
(c) is the aid measure proportional, or in other words
the beneficiaries from part of their electricity
could the same change in behaviour be obtained
procurement costs, which they would normally have
with less aid?
had to bear in their day-to-day operations.
3. Are the distortions of competition and the effect on
trade limited, so that the overall balance is positive?
(158) Even if the improvement of competitiveness was an
objective of common interest, therefore, the Commission
considers that operating aid would in any event not be
an appropriate policy instrument for achieving that
O b j e c t i v e o f c o m m o n i n t e r e s t
objective.
(153) Austria submits that the main objective of the measure is
environmental protection. However, as demonstrated
above in recitals 126–129, the exemption mechanism
(159) With regard to environmental taxes the Commission has
does not contribute to environmental protection.
accepted a limited exception to this principle, but with a
specific objective in mind. Reductions of and exemptions
from environmental taxes concerning certain sectors or
(154) In addition,
any environmental effect of the measure is to
categories of undertakings are admissible under Chapter
be achieved through an overall increase in feed-in tariffs,
4 of the Environmental Aid Guidelines if they make it
which in Austria’s opinion would not be possible
feasible to adopt higher taxes for other undertakings,
without ensuring the continued competitiveness of
thus resulting in an overall improvement of cost inter
energy-intensive businesses by means of the notified
nalisation, and to create further incentives to improve on
exemption mechanism. As the Austrian authorities in
environmental protection. Here the Commission has
fact acknowledge in their submissions, the objective of
taken the view that this type of aid might be necessary
the exemption mechanism is to improve the competi
to address negative externalities indirectly by facilitating
tiveness of energy-intensive businesses in Austria vis-à-
the introduction or maintenance of relatively high
vis their competitors in other Member States. In its
national environmental taxation.
decisions the Commission has never accepted that such
aid contributes to an objective of common interest.
(160) However, the Commission finds that the contributions to
the support of green electricity from which the bene
(155) The only exception to this practice is Chapter 4 of the
ficiaries are to be exempted under the notified scheme
Environmental Aid Guidelines. But even where the
do not constitute an environmental tax within the
Commission accepts a reduction of an environmental
meaning of points 70(14) and 151 of the Guidelines.
tax, it still requires that a minimum level of tax be
Taxes are charges which are paid into the general
paid. This means that the total contribution to overall
budget of the State. The contributions from which the
tax revenues of the undertaking benefiting from the tax
beneficiaries are to be exempted under the notified
reduction still increases with each unit of pollution. In
scheme are not paid into the general budget of the
the present case the situation is different. The
State. They are used exclusively to finance the
contribution is capped at 0,5 % of the net production
contributions to OeMAG, which supports green elec
value. Any additional units of pollution are no longer
tricity producers through feed-in tariffs. Consequently,
subject to the parafiscal levy. Thus the contribution per
these contributions do not constitute an environmental
unit of pollution decreases for each additional unit.
tax.
Rather than encouraging resource efficiency, therefore,
the system provides an incentive for using additional
(
resources.

84 ) Case T-459/93 Siemens SA v Commission [1995] ECR II-1675,

paragraph 48.
( 85 ) Case T-459/93 Siemens SA v Commission [1995] ECR II-1675,
paragraph 48. See also Case T-396/08 Freistaat Sachsen and Land
Sachsen-Anhalt v Commission, 8 July 2010, not yet reported,
(156) The Commission consequently considers that the aid
paragraphs 46-48; Case C-156/98 Germany v Commission [2000]
does not contribute to an objective of common interest.
ECR I-6857, paragraph 30, with further references.

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(161) The Commission considers that any exception from the
(166) According to those provisions, the Member State has to
general rule of incompatibility of operating aid which is
provide information on the respective sectors or
stated in the Environmental Aid Guidelines should be
categories of beneficiaries covered by the exemptions
interpreted strictly. Being an exception, therefore,
or reductions, on the situation of the main beneficiaries
Chapter 4 of the Guidelines must be restricted to envi
in each sector concerned and on how the taxation may
ronmental taxes.
contribute to environmental protection. The exempted
sectors should be properly described and a list of the
largest beneficiaries for each sector should be provided
(considering notably turnover, market shares and size of
the tax base) ( 87 ). On the basis of this information the
Commission has to assess whether the reductions of or
(162) Furthermore, as explained above, the application of
exemptions from environmental taxes are necessary and
Chapter 4 of the Guidelines to parafiscal levies would
proportional. With regard to necessity, the choice of
contradict the objectives of those rules and of the
beneficiaries must be based on objective and transparent
Energy Tax Directive with regard to harmonised energy
criteria, and the environmental tax without reduction
taxes. Such an approach might also result in the general
must lead to a substantial increase of production costs
application of these provisions to parafiscal levies in the
that cannot be passed on to consumers without leading
area of environmental protection (e.g. parafiscal levies on
to important sales reductions ( 88 ). With regard to propor
waste or the like). Such a wide application goes beyond
tionality, the Member State has to demonstrate that each
the scope and the objectives of Chapter 4 of the
individual beneficiary pays a proportion of the national
Guidelines.
tax level which is broadly equivalent to its environmental
performance, or at least 20 % of the national tax, unless
a lower rate can be justified, or that the reductions or
exemptions are conditional on the conclusion of
agreements aimed at achieving environmental
objectives ( 89 ).
(163) Consequently, the Commission considers that operating
aid in the form of reductions of parafiscal levies is not an
appropriate instrument for improving environmental
protection. The Commission has never yet applied the
conditions of Chapter 4 of the Environmental Aid
Guidelines to other types of charges and parafiscal levies.
(167) Although the Commission repeatedly asked it to do so,
however, Austria did not provide this information ( 90 ).
The Commission has consequently been unable to
assess whether the aid is necessary and proportional or
how it might contribute to the protection of the
environment.
(164) The Commission observes that the volume of an envi
ronmental tax, even if only the reduced rate applies, is
directly proportionate to the level of pollution created by
the undertaking in question. In the present case,
however, the contribution is capped at a certain level.
(168) Finally, Austria also failed to show that the exemption
Any consumption that goes beyond that level is no
mechanism would have any incentive effect.
longer taxed. This exemption mechanism deprives the
parafiscal levy of any incentive for resource-efficient
behaviour.
D i s t o r t i o n o f c o m p e t i t i o n a n d i m p a c t
o n t r a d e
(169) According to the case-law, operating aid threatens to
N e c e s s i t y , i n c e n t i v e e f f e c t a n d p r o p o r
distort competition and to affect trade ( 91 ). In the
t i o n a l i t y
present case, the distortive effect is aggravated by the
(165) In the event that it were to be accepted that operating
fact that those undertakings eligible for the exemption
aid in the form of reductions of parafiscal levies was an
mechanism already receive operating aid in the form of a
appropriate policy instrument, the operating aid involved
reduced rate of energy taxation. Granting them a second
would have to be tested for necessity and proportionality
form of operating aid, which in addition is not limited in
in the same way as reductions of non-harmonised envi
time, would lead to distortion of competition and affect
ronmental taxes under Chapter 4 of the Environmental
trade to an extent contrary to the common interest.
Aid Guidelines ( 86 ), because the assessment of non-
harmonised environmental taxes under Chapter 4
( 87 ) See footnote 73.
reflects the general principles of the detailed economic
( 88 ) See footnote 74.
analysis under Article 107(3)(c) TFEU
( 89 ) See footnote 75.
( 90 ) Austria did not reply to the questions on this point asked by the
Commission on 21 June 2010 and 19 July 2010.
( 86 ) As already explained, the Commission considers that the feed-in
( 91 ) Case T-459/93 Siemens SA v Commission [1995] ECR II-1675,
tariff is clearly not a harmonised environmental tax.
paragraph 48.

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C o n c l u s i o n
HAS ADOPTED THIS DECISION:
(170) The Commission concludes that the exemption
mechanism cannot be declared compatible under
Article 107(3)(c) TFEU.
Article 1
The State aid in the form of a partial exemption from the
obligation to purchase green electricity which Austria plans to
grant to energy-intensive businesses is incompatible with the
5.4. Conclusion
internal market.
(171) In the light of the considerations set out above the
Commission has assessed the support scheme for green
The aid may accordingly not be implemented.
electricity producers and the exemption mechanism for
energy-intensive businesses. In its opening decision of
22 July 2009 the Commission found that the support
Article 2
scheme for green electricity producers constituted State
aid, but was compatible with the internal market. The
Austria shall inform the Commission, within two months of
decision initiated a formal investigation into the
notification of this Decision, of the measures taken to comply
exemption mechanism; the Commission now finds that
with it.
that measure too constitutes State aid caught by
Article 107(1) TFEU. However, the Commission
considers that the exemption mechanism is pure
Article 3
operating aid, and is not eligible for any of the
exemptions that the TFEU allows from the general
This Decision is addressed to the Republic of Austria.
prohibition of State aid.
Done at Brussels, 8 March 2011.
Having regard to all the facts brought to the Commission’s
For the Commission
attention, the Commission concludes that the State aid that
Austria plans to grant to energy-intensive businesses must be
Joaquín ALMUNIA
considered incompatible with the internal market,
Vice-President

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