HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN"EN
1.9.2012 Official
Journal
of
the
European
Union L
236/1
II
(Non-legislative acts)
DECISIONS
COMMISSION DECISION
of 25 April 2012
on State aid SA.25051 (C 19/10) (ex NN 23/10) granted by Germany to the Zweckverband
Tierkrperbeseitigung in Rhineland-Palatinate, Saarland, Rheingau-Taunus-Kreis and Landkreis
Limburg-Weilburg
(notified under document C(2012) 2557)
(Only the German text is authentic)
(Text with EEA relevance)
(2012/485/EU)
THE EUROPEAN COMMISSION,
Article 108(2) TFEU in respect of the measure (‘opening
decision’). On publishing the opening decision in the
Official Journal of the European Union on 26 October
Having regard to the Treaty on the Functioning of the European
2010, the Commission invited interested parties to
Union and in particular the first subparagraph of Article 108(2)
submit their comments on the measure ( 3 ).
thereof ( 1 ),
Having called on interested parties to submit their comments
(3) The Commission received comments from the
pursuant to the Article cited above ( 2 ) and having regard to their
complainant on 25 November 2010. In line with the
comments,
approved requests for extension of the deadline on
20 August 2010 and 18 November 2011, Germany
submitted its comments on the opening decision and
Whereas:
on the complainant’s comments in several parts on
3 March 2011, 1 April 2011, 4 April 2011, 16 May
2011, 15 July 2011, and 18 November 2011.
1. THE PROCEDURE
(1) In
a
complaint
submitted
by
Saria
Bio-Industries
AG
&
Co KG (‘the complainant’) on 23 February 2008, the
Commission was informed that Germany grants annual
(4) The
ZT
sent
written
comments
to
the
Commission
on
contributions to the Zweckverband Tierkrperbeseitigung
4 April 2011. Under Article 20(1) in conjunction with
(special-purpose association for animal carcase disposal)
Article 6 of Council Regulation (EC) No 659/1999 of
in Rhineland-Palatinate, Saarland, Rheingau-Taunus-Kreis
22 March 1999 laying down detailed rules for the appli
and Landkreis Limburg-Weilburg (‘the ZT’).
cation of Article 93 of the EC Treaty ( 4 ), the parties
concerned have to submit their comments not later
than one month after the date of publication in the
(2) The
Commission
informed
Germany
by
letter
of
20
July
Official Journal, but the ZT did not submit its
2010 of its decision to initiate the procedure laid down
comments until after four months. Only in justified indi
vidual cases can the Commission take account of
comments that are submitted late by parties to proceed
( 1 ) As of 1 December 2009, Articles 86, 87 and 88 of the EC Treaty
ings ( 5 ). The Commission can see no such justification in
were replaced by Articles 106, 107 and 108 of the Treaty on the
Functioning of the European Union (TFEU). The three Articles in
the ZT’s letter or in any other circumstances. The
each Treaty are essentially the same. For the purposes of this
Commission therefore informed the ZT in a letter of
Decision references to Articles 106, 107 and 108 TFEU should be
18 April 2011 that to take its comments into account
understood as references to Articles 86, 87 and 88 EC where appro
in the formal examination procedure would be contrary
priate. The TFEU also introduced several changes in terminology, for
instance replacing ‘Community’ by ‘Union’ and ‘common market’ by
‘internal market’. In this Decision the terminology of the TFEU is
( 3 ) See footnote 2.
used throughout.
( 4 ) OJ L 83, 27.3.1999, p 1.
( 2 ) OJ C 289, 26.10.2010, p 8.
( 5 ) Case T-366/00 Scott v Commission ECR [2007] II-797.

---

L 236/2
EN
Official Journal of the European Union
1.9.2012
to the procedural rules and would lead to unjustifiable
and use or disposal of animal by-products so that these
unequal treatment of the parties to the proceedings.
products do not pose a risk to human and animal health.
Nevertheless it took all the information contained in
The legislation is intended, inter alia, to prevent
the comments as a basis for the present decision.
outbreaks of transmissible spongiform encephalitis
(TSE) and other transmissible animal diseases such as
classical swine fever (CSF) or foot-and-mouth disease
(FMD).
(5) Parallel
to
the
Commission’s
formal
examination
procedure, the complainant had pursued national legal
proceedings in Germany and had brought an action
against the ZT before the Verwaltungsgericht Trier
(9) Section
4
of
Regulation
(EC)
No
1069/2009
makes
a
(Trier Administrative Court). On 2 December 2008 the
distinction between three different categories of animal
court held that the annual contributions constituted state
by-products according to the specific risks to animal and
aid within the meaning of Article 107(1) TFEU. As
human health:
regards repayment of the unlawful aid, the court
decided that the ZT did not have to repay the amount
received between 2005 and 2008 since there were
(a) Category 1 material poses substantial risks associated
special circumstances that made repayment appear
in particular with TSE and the existence of certain
disproportionate.
prohibited substances and environmental contami
nants. Material in this category consists, amongst
other things, of body parts of animals suspected of
being infected by TSE or animals in which the
(6)
Both the complainant and the ZT appealed against the
presence of TSE has been confirmed, and mixtures
judgment of the Verwaltungsgericht Trier to the Ober
of category 1 material with category 2 or category 3
verwaltungsgericht Koblenz (Koblenz Higher Adminis
material. Such materials must be disposed of through
trative Court). On 24 November 2009 the Oberverwal
incineration or processing and must not be incor
tungsgericht upheld the judgment of the Verwaltungs
porated in feed for farmed animals or in technical
gericht Trier.
products.
(7) The
complainant
and
the
ZT
then
appealed
to
the
(b) Category 2 material also poses considerable risks as it
Bundesverwaltungsgericht (‘the BVerwG’ — Federal
consists of fallen stock and other materials that
Administrative Court) against the ruling given by the
contain certain prohibited substances or contami
Oberverwaltungsgericht Koblenz. In a judgment of
nants. This category of material must be disposed
16 December 2010 (
of through incineration or processing and must not

6 ) the Bundesverwaltungsgericht
rejected the complainant’s appeal, amended the decision
be incorporated in feed for farmed animals. In some
of the Oberverwaltungsgericht Koblenz, and rejected the
cases, however, it may be used as fertiliser or for
applications as a whole, taking the view that the
technical purposes.
complaint was inadmissible in respect of the years
2005 to 2009 and that the annual contribution for
2010 did not represent aid within the meaning of
Article 107(1) TFEU.
(c) Category 3 material comprises, amongst other things,
parts of slaughtered animals which, although rejected
as unfit for human consumption, are not affected by
any signs of diseases communicable to humans or
animals and also materials originating from animals
2. DETAILED DESCRIPTION OF THE MEASURE
that are fit for human consumption but which for
economic reasons are used for other purposes, such
2.1. Legal background
as feeding stuff for farmed animals.
2.1.1. European legislation
(8) Regulation
(EC)
No
1069/2009
of
the
European
Parliament and of the Council of 21 October 2009
(10) Regulation
(EC)
No
1069/2009
is
essentially
equivalent
laying down health rules as regards animal by-products
to its predecessor, Regulation (EC) No 1774/2002 of
and derived products not intended for human
the European Parliament and of the Council ( 8 ), and
consumption and repealing Regulation (EC) No
includes provisions prohibiting the import and export
1774/2002 (Animal by-products Regulation) (
of category 1 and 2 material and requiring disposal

7 ) laying
down health rules as regards animal by-products and
plants to be approved by the competent authorities
derived products not intended for human consumption
that are to apply the provisions of the Regulation. Regu
and repealing Regulation (EC) No 1774/2002 governs
lation (EC) No 1069/2009, then, lays down specific
the collection, transport, storage, treatment, processing
provisions controlling the disposal of category 1 and 2
material. Beyond that, however, there are no
requirements under the Regulation as regards the way
( 6 ) BVerwG, 3 C 44.09 of 16.12.2010, http://www.
bundesverwaltungsgericht.de
( 7 ) OJ L 300, 14.11.2009, p. 1.
( 8 ) OJ L 273, 10.10.2002, p. 1.

---

EN
1.9.2012 Official
Journal
of
the
European
Union L
236/3
in which the disposal of category 1 and 2 material
become members of the ZT (see § 1 of the ZT’s Verband
should be organised in economic terms. So Regulation
sordnung (articles of association)).
(EC) No 1069/2009 does not require disposal in a
particular area to be performed by a single undertaking
alone, as is the case in Germany.
(14) Under § 2 of its Verbandsordnung, the ZT is authorised
by its members to assume all the rights and obligations
incumbent on rural districts and urban districts in their
2.1.2. National legislation
capacity as bodies responsible for disposal under § 3 of
the TierNebG in conjunction with the laws of the indi
(11) Under
§
3
of
the
German
legislation
implementing
the
vidual German states.
Community provisions on the processing and disposal of
animal by-products not intended for human consump
tion ( 9 ) (‘the TierNebG’ — Animal By-Products Act), rural
(15) Under
German
law
a
special-purpose
association
cannot
districts (Landkreise) and urban districts (kreisfreie Stdte)
be the subject of insolvency proceedings because of its
are obliged to carry out the disposal and processing of
legal nature as a public-law entity. Its members can,
category 1 and category 2 material — referred to as
however, decide to dissolve it.
‘controlled goods’. They can perform this task themselves
or contract third parties to do it.
2.3. Disposal of fallen stock and slaughterhouse
waste
(12) The
disposal
of
category
3
material
—
known
as
‘uncon
2.3.1. The ZT’s activities
trolled goods’ — can be carried out by any processing
undertaking provided that the provisions of Regulation
(16) The
ZT
performs
not
only
the
task
assigned
to
it
under
(EC) No 1069/2009 are complied with.
its articles of association, namely to dispose of category 1
and 2 material from the area that it covers (‘internal
material’), it also disposes of category 1 and category 2
2.2. Zweckverband Tierkrperbeseitigung
material from the neighbouring German states of Baden-
Württemberg and Hessen (see the detailed description in
(13) The
ZT
is
a
public-law
entity
established
in
1979
under
paragraphs 20 ff.) plus uncontrolled category 3 material
§§ 1 and 2 of the Rhineland-Palatinate Landesgesetz zur
(together referred to as ‘external material’).
Ausführung des TierNebG ( 10 ) (‘the TierNebGAG RP’ —
Rhineland-Palatinate State law implementing the Animal
By-Products Act). In the meantime all rural districts and
(17) As can be seen from the table below, the ZT has
larger urban districts in Rhineland-Palatinate and
processed large quantities of external material in the
Saarland and two rural districts in Hessen — Rheingau-
past. On average almost half the quantity processed in
Taunus-Kreis and Landkreis Limburg-Weilburg — have
recent years consisted of external material.
Table 1
Quantities processed by the ZT in the years 1998-2009
External material
Internal material
Baden-Württemberg Northern and Central
Hessen
Category 1 and 2
Category 3
Category 1 and 2
Category 1 and 2
controlled goods
uncontrolled goods
controlled goods
controlled goods
Total
1998 Tonnes 38
055 […]
(*)
0
0 […]
% […] […] 0
% 0
% 100
%
1999 Tonnes 41
081 […]
0
0 […]
% […] […] 0
% 0
% 100
%
2000 Tonnes 44
929 […] 1
114
0 […]
% […] […] […] 0
% 100
%
2001 Tonnes 57
110 […] 14
079
0 […]
% […] […] […] 0
% 100
%
( 9 ) Published on 25 January 2004 (BGBl. I p. 82), last amended on
9 December 2010 (BGBl. I p. 1934).
( 10 ) GVBl. Rhineland-Palatinate 2010, p. 367.

---

L 236/4
EN
Official Journal of the European Union
1.9.2012
External material
Internal material
Baden-Württemberg Northern and Central
Hessen
Category 1 and 2
Category 3
Category 1 and 2
Category 1 and 2
controlled goods
uncontrolled goods
controlled goods
controlled goods
Total
2002 Tonnes 58
316 […] 14
803
0 […]
% […] […] […] 0
% 100
%
2003 Tonnes 54
325 […] 16
067
0 […]
% […] […] […] 0
% 100
%
2004 Tonnes 52
562 […] 13
228
0 […]
% […] […] […] 0
% 100
%
2005 Tonnes 48
944 […] 11
658
0 […]
% […] […] […] 0
% 100
%
2006 Tonnes 45
988 […] 11
389
0 […]
% […] […] […] 0
% 100
%
2007 Tonnes 44
544 […] 6
797
0 […]
% […] […] […] 0
% 100
%
2008 Tonnes 41
838 […] 7
046
0 […]
% […] […] […] 0
% 100
%
2009 Tonnes 36
863 […] 8
569 23
312 […]
% […] […] […] […] 100
%
Average Tonnes 47
046 […] 8
729 1
943 […]
from 1998 to
% […] […] […] […] 100
%
2009
(*) Business secret.
(18) Internal
material
consists
of
fallen
stock
and
slaught
public law was concluded between the ZT and the
erhouse waste. The ZT carries out both collection and
Zweckverband Neckar-Franken. Under the agreement
processing (hereafter jointly referred to as ‘disposal’). In
collection was carried out locally by the Zweckverband
order to cover the costs involved, the ZT applies charges.
Neckar-Franken and the material was then delivered to
Different scales of charges are applied to fallen stock and
the ZT for processing.
slaughterhouse waste.
(19) As category 3 material is traded on the free market, the
(21) In
2007
the
ZT
also
bid
to
dispose
of
controlled
goods
ZT agrees the charges for disposal under private law.
in the rural districts of North and Central Hessen under
While most private disposal plants dispose of category
an invitation to tender and was awarded the contract.
3 material separately in order to achieve higher sales
Before ZT took over the task of disposal on 1 April
revenue by processing it — for example into pet food
2009, disposal was carried out by one of the
— the ZT processes category 3 material jointly with
complainant’s group companies.
controlled goods, as it does not have a separate plant.
Consequently only lower-value end products — such as
oil and fats — can be obtained from processed controlled
goods.
(22) ZT
thus
sought
to maximise
utilisation
of its
plant
capacity not only by processing internal material, but
also by engaging quite heavily, beyond its formal task,
(20) Since
2000
the
ZT
has
also
been
processing
category
1
in processing both category 3 material, which is freely
and category 2-slaughterhouse waste from Baden-Würt
tradable, and category 1 and 2 material from outside the
temberg. To this end a special-purpose agreement under
area covered by the association. Between 2002 and 2008

---

EN
1.9.2012 Official
Journal
of
the
European
Union L
236/5
only 54 % to 58 % of the quantities processed by the ZT
tonnes a week, over and above the normal figure, for
were internal material. In 2009 — partly owing to the
processing in the event of an epidemic (see also Table 3
inclusion of material from North and Central Hessen —
in section 9.3.1).
this proportion fell considerably to just 39 %, accounting
for not even half the total quantity processed by the ZT.
2.4. Annual contribution and public task
2.3.2. The ZT’s plant capacity
(29) The
annual
contributions
that
the
ZT
receives
from
its

members (rural and urban districts) have their legal basis
(23) The
ZT
has
two
disposal
plants,
in
Rivenich
and
Sander
in the ZT’s Verbandsordnung. The purpose of the annual
smühle. In normal operation both plants run an average
contributions is to offset the costs that are not covered
of two shifts on five weekdays (5-day 2-shift operation).
by revenue (see § 9(1) of the Verbandsordnung).
A maximum of 2 160 tonnes per week can be processed
in this time. This normal operating capacity was, on
average, sufficient to process the 88 000 tonnes arising
annually in recent years, which amounts to 1 700 tonnes
per week.
(30) The amount of the annual contributions is fixed on the

basis of the annual budget statute, which first has to be
approved by the general meeting of the members. As
soon as the budget statute has been adopted, the ZT is
(24) Like
other
disposal
companies,
the
ZT
has
operational
entitled to claim payment of the annual contribution by
spare capacity in the shape of the unused shifts that
way of an administrative act.
occur in the course of normal operation during the
week and at weekends. This spare operational capacity
can be used to process the additional carcases in the
event of an epidemic.
(31) In February 2010 the ZT’s Verbandsordnung was
amended with retroactive effect from 1 January 2009.
Until then the Verbandsordnung contained no rules
2.3.2.1. S h o r t - t e r m
s p a r e
o p e r a t i o n a l
regarding the use and calculation of annual contributions
c a p a c i t y
beyond the provisions of § 9(1), but in February 2010
the following new provisions were introduced.
(25) According to the information supplied by the ZT, the
plants can be operated in three shifts on all seven days
of the week (7-day 3-shift operation) for a short period
of 6 to 12 weeks. This means that a weekly capacity of
up to 4 536 tonnes is available for short periods.
(32) Under § 9(2) of the Verbandsordnung the annual
Continuous three-shift operation on seven days cannot,
contribution now has to be fixed in advance. The rules
however, be maintained due to wear and tear and staff
also state that the annual contribution may only be
fatigue.
levied as compensation for costs that arise from the

assigned obligation to dispose of category 1 and 2
material and to keep capacity in reserve to cope with
epidemics.
(26) So
in
the
short
term
—
over
a
period
of
up
to
12
weeks
— the ZT has spare operational capacity, over and above
the normal figure, of 2 376 tonnes a week available for
processing in the event of an epidemic (see also Table 3
(33) Under
§ 10(2) of the Verbandsordnung the reserve
in section 9.3.1).
capacity for epidemics that had to be provided for each
of the years 2009 and 2010 was set at 7 110 tonnes,
which had to be processed within a period of six weeks
2.3.2.2. L o n g - t e r m
s p a r e
o p e r a t i o n a l
(equivalent to six times 1 185 tonnes per week). When
c a p a c i t y
fixing the size of the epidemic reserve, account was taken
of the fact that, besides the ZT’s own capacity, a further
(27) Over the longer term the plants could, however, be used
5 000 tonnes of alternative disposal capacity were
for a maximum of three shifts on five days a week (5-day
available per annum in the event of an epidemic. The
3-shift operation) to process additional material arising
costs of the epidemic reserve must be laid down in
from an epidemic, since weekends would be required for
advance in the relevant business plan, and the only
maintenance work in the event of higher utilisation for a
costs that can be taken into account are the appropriate
fairly long period. In this case up to 3 240 tonnes could
proportion of fixed costs (depreciation, taxes, insurance,
be processed per week.
interest on borrowings), the cost of outside maintenance
contracts, and the proportion of staff costs required to
maintain constant operational readiness. The costs of the
epidemic reserve must be recorded in specific accounts,
(28) So
in
the
longer
term
—
over
a
period
of
more
than
12
separately from the undertaking’s other costs and are
weeks — the ZT has spare operational capacity of 1 080
allocated in proportion to the relevant share of capacity.

---

L 236/6
EN
Official Journal of the European Union
1.9.2012
(34) From
its
founding
in
1979
up
to
2011
the
ZT
received
principle bear the cost of disposing of animal by-prod
annual contributions totalling EUR 66 493 680. The
ucts ( 14 ). In certain very limited circumstances, however,
annual figures since 1998 were as follows:
aid is permitted for TSE tests and the disposal of fallen
stock ( 15 ). No aid at all may be granted for the disposal of
1998:
EUR 2 114 192 (DM 4 135 000)
slaughterhouse waste ( 16 ). Moreover aid is compatible
with the internal market only if it can be demonstrated
1999:
EUR 2 432 216 (DM 4 575 000)
that the aid goes solely to farmers and not to production
enterprises further downstream (such as slaughterhouses
2000 and 2001: EUR 2 249 684
(DM
4 400 000)
or animal disposal plants) ( 17 ).
annually
2002 to 2008: EUR 2 250 000 annually
2.5.1. Commission Decision of 29 January 2004 in aid case
2009: EUR
1
961
515
NN 33/03
2010: EUR
2
212
392
(40) In
2004
the
Commission
approved
a
State
aid
scheme
to
counter the threat of TSE in Rhineland-Palatinate that
2011: EUR
1
962
515
was notified by Germany under Article 107(3)(c) TFEU,
the Community TSE guidelines, and the Community
guidelines for State aid in the agriculture sector of
12 August 2000 ( 18 ). The aim of the scheme was to
(35) The annual contributions from 1998 to 2011 amounted
prevent the spread of BSE, inter alia, by reimbursing
to a total of EUR 30 932 198.
farmers for the additional costs they had incurred for
the proper disposal of risk material owing to the intro
duction of the ban on feeding cattle with meat and bone
(36) According
to
the
profit
and
loss
accounts
presented,
the
meal.
ZT made an aggregate loss of EUR 4 562 795 between
1998 and 2009 after the annual contributions are
included. Leaving out the contributions, which totalled
EUR 26 757 292, the aggregate loss for 1998 to 2009
(41) Alongside
other
measures,
the
Commission
approved
a
comes to EUR 31 320 678. The annual contributions
one-off aid of 100 % for the disposal costs of specified
were therefore not sufficient to offset the overall losses
risky slaughterhouse waste that had accumulated from
in full.
October 2000 to September 2001 as a result of the
ban on feeding meat and bone meal. However, the bene
ficiaries of the aid were considered to be the slaughter
houses and not the ZT.
2.5. Approved State aid in connection with TSE
tests, fallen stock and slaughterhouse waste
(37) The
polluter
pays
principle
under
Article
191(2)
TFEU
2.5.2. Commission Decision of 6 July 2004 in aid case
applies in general to the disposal of animal by-products.
N 15/04
It is thus primarily the responsibility of producers to see
to the disposal of fallen stock and slaughterhouse waste
(42) Under
the
second
aid
scheme
also
authorised
in
2004,
and to bear the costs involved ( 11 ).
farmers in Rhineland-Palatinate were to receive compen
sation for the costs of collecting and processing fallen
stock for which they had paid contributions to the Tier
(38) However,
because
of
the
TSE
crisis,
there
was
a
need
to
seuchenkasse ( 19 ) (animal sickness fund). The charges
ensure the proper treatment of fallen stock and slaught
applied by the ZT for collecting and processing internal
erhouse waste consisting of category 1 and 2 materials
fallen stock are borne in equal parts by the German
and to support farmers through State aid. The European
states (Rhineland-Palatinate, Hessen, Saarland), the
Commission set up corresponding arrangements in the
members of the association, and the Tierseuchenkasse
Community guidelines for State aid concerning TSE tests,
of the respective states. However, in the case of the
fallen stock and slaughterhouse waste of 24 December
processing costs, the owners of farmed animals have to
2002 ( 12 ) (‘the Community TSE guidelines’). These
make a contribution of 25 per cent.
arrangements were incorporated and tightened in
section V.B.4 of the Community guidelines for State
( 14 ) Community TSE guidelines, paragraphs 27 and 37; agricultural aid
aid in the agriculture and forestry sector 2007 to
guidelines 2007–2013, paragraphs 132(g) and 132(h).
2013 (
(

13 ) (‘the agricultural aid guidelines 2007–2013’).

15 ) Community TSE guidelines, sections III.C and IV.C; agricultural aid
guidelines 2007–2013, paragraph 134.
( 16 ) Community TSE guidelines, section V.C; agricultural aid guidelines
2007–2013, paragraph 135(b).
(39) Under the Community TSE guidelines and the agri
( 17 ) Community TSE guidelines, paragraphs 32 and 33; agricultural aid
cultural aid guidelines 2007–2013, the polluter must in
guidelines 2007–2013, paragraph 135(a).
( 18 ) OJ C 232, 12.8.2000, p. 17.
( 19 ) The Tierseuchenkassen, which exist in all the Lnder, are public-law
( 11 ) Case C-126/01, Ministère de l’conomie, des Finances et de l’Industrie v
bodies with the task of paying compensation to animal owners for
GEMO ECR [2003] I-13769, paragraphs 31 and 32.
animals that die from certain notifiable diseases or are put down by
( 12 ) OJ C 324, 24.12.2002, p. 2.
veterinary order. The Tierseuchenkassen are funded by
( 13 ) OJ C 319, 27.12.2006, p. 1.
contributions from animal owners and grants from the Lnder.

---

EN
1.9.2012 Official
Journal
of
the
European
Union L
236/7
(43) The
aid,
paid
direct
to
the
ZT,
was
approved
for
the
not include in its charges the additional costs arising
period from 1 January 1999 until 31 December 2013.
from processing category 3 material at the same
It was subject to the condition that it went exclusively to
time.
farmers and was not cumulated with other aid.
(b) In the tendering procedure for the disposal of
controlled goods in Northern and Central Hessen,
(44) As the aid compensated for a proportion of the charges
the ZT was able to win the contract only because
fixed in advance (100 % for collection and 75 % for
its fixed costs for maintaining reserve capacity were
processing), the Commission concluded that it went
already covered by the annual contribution and it
exclusively to farmers and did not create any economic
was therefore able to offer lower rates of charges.
advantage for the ZT.

(49) Germany contends, on the other hand, that the annual
2.5.3. Relationship between the approved aid schemes
contribution was necessary to cover ZT’s costs arising
NN 33/03 and N 15/04 and the annual
from its obligation to provide reserve capacity to cope
contributions
with epidemics. In support, Germany submitted an
expert study from the Fraunhofer Institute of March
(45) Both
aid
schemes
(‘the
agricultural
aid’)
are
entered
as
2007 ( 20 ) (‘the Fraunhofer study’) to show that the cost
income in the ZT’s books. Consequently the losses
of the epidemic reserve amounted to 50 % of the total
shown in recial 36 not including the annual
capacity costs. It was also argued that the annual
contributions already take into account the fact that
contribution was necessary to cover the clean-up costs
the ZT received agricultural aid as income.
for contaminated sites.
(46) In
other
words,
the
ZT
received
the
annual
contributions
(50) In
its
provisional
examination
the
Commission
initially
as well as the agricultural aid to finance its outstanding
found that the annual contributions provide an economic
losses.
advantage for the ZT, as they reduce its current expen
diture, and that the other criteria for the existence of aid
were met.
3. REASONS FOR INITIATING THE PROCEDURE
(51) The
Commission
pointed
out
that
such
aid
is
generally
(47) The
complainant
maintains
that
the
ZT
could
not
survive
prohibited. It went on to spell out its doubts as to
economically if its members did not cover the annual
whether the annual contribution could be justified as
losses arising from the disposal of internal and external
compensation for maintaining an epidemic reserve. The
material by paying annual contributions. The ZT, with a
Commission based its argument on the four criteria laid
monopoly for the disposal of internal material and thus
down in the Altmark judgment ( 21 ):
no competition, offered below-market prices on the open
markets for external material. The ZT’s price policy was
only oriented towards maximising utilisation at its plants,
which have high spare capacity.
(a) The recipient undertaking must actually have public
service obligations to discharge, and those obligations
must be clearly defined.
(48) The complainant sees many kinds of distortion of
competition that arise through the annual contribution
(b) The parameters on the basis of which compensation
payments. In particular it criticised the ZT’s pricing for
is calculated should be drawn up objectively and
category 3 material and in the invitation to tender for the
transparently in advance.
disposal contract in Northern and Central Hessen:
(c) The compensation should not exceed what is
(a) The ZT offered to dispose of slaughterhouse waste at
necessary to cover, wholly or partially, the costs of
charges which were not dependent on the quantity
fulfilling public service obligations taking account of
processed but at a fixed price per animal. This makes
the income obtained and an appropriate profit from
it attractive for smaller slaughterhouses to dispense
the fulfilment of these obligations.
with separation, as separating controlled and uncon
trolled goods involves higher costs than for larger
( 20 ) Fraunhofer Institut, Untersuchung von Verarbeitungskapazitt und
and better equipped slaughterhouses, and to hand
Seuchenreserve der Tierkrperbeseitigung in Rheinland-Pfalz (Study
over category 3 material to the ZT together with
of processing capacity and epidemic reserve for disposal of animal
category 1 and 2 slaughterhouse waste. The ZT
carcases in Rhineland-Palatinate), March 2007.
( 21 ) Case C-280/00 Altmark Trans GmbH and Regierungsprsidium
thus offers to dispose of slaughterhouse waste at
Magdeburg v Nahverkehrsgesellschaft Altmark GmbH ECR [2003]
prices that do not cover its costs because it does
I-7747.

---

L 236/8
EN
Official Journal of the European Union
1.9.2012
(d) Where the undertaking that is to discharge public
(‘the environmental aid guidelines’), such aid can only be
service obligations is not chosen in a public
deemed compatible with the internal market if the bene
procurement procedure that would allow for the
ficiary cannot be made liable under national law, which
selection of the tenderer capable of providing those
apparently is not the case in this instance.
services at the least cost to the community, the level
of compensation needed must be determined on the
basis of an analysis of the costs which a typical, well
run undertaking would have incurred in discharging
4. NATIONAL COURT PROCEEDINGS
those obligations.
(58) In
its judgment of 16 December 2010 the highest
German administrative court, the BVerwG held that the
(52) On the question of the existence of a service of general
2010 contributions were not state aid under the terms of
economic interest, the Commission expressed doubts as
Article 107(1) TFEU, since the Altmark criteria were met.
to whether there is a public interest in the provision of
The BVerwG did not make any pronouncement on
an epidemic reserve since, under the polluter pays prin
earlier contributions because it took the view that the
ciple, farmers are under an obligation to dispose of fallen
appeal was not admissible with respect to the
stock and slaughterhouse waste and are supported by the
contributions paid prior to 2010.
abovementioned aid approved by the Commission under
the TSE Community guidelines. It is also questionable
whether the annual contribution is necessary since the
practice of other German states shows that the plants of
4.1. First Altmark criterion
private operators have sufficient spare capacity to cope
with animal epidemics without receiving additional
(59) The
BVerwG
held
that
the
disposal
of
animal
by-products
compensation for providing it.
under the animal by-products Regulation and § 3(1) of
the TierNebG constitutes a service of general economic
interest and includes the provision of reserve capacity in
(53) The
Commission
also
doubted
whether
the
Verband
the event of epidemics.
sordnung governing the ZT fulfils the requirements of
a transparent entrustment act since, before 2010, the
provision of an epidemic reserve was not defined as a
public interest obligation to be provided by the ZT and
(60) The
BVerwG
distinguished
between
capacity
that
is
used
because it did not set out the necessary parameters for
for normal operations, including spare operational
calculating the cost.
capacity, and idle capacity that is normally unused. If
the annual contributions covered the costs of normal
capacity, including an essential epidemic reserve, the
(54) Regarding
the
need
for
a
compensation
payment,
the
BVerwG would agree that the annual contributions
Commission raised the question as to whether the
were state aid because of the polluter pays principle.
annual contributions do not, in fact, finance the losses
arising from unprofitable spare capacity. It is ques
tionable whether an additional annual contribution is
necessary if in other German states all the costs are
(61) However,
if
the
annual
contributions
only
covered
the
covered by the charges paid by polluters.
costs of the spare capacity that is held solely for the
outbreak of an epidemic, they would not constitute
state aid. It is of no significance that the spare capacity
(55) Since the ZT was not selected through a public invitation
may be higher than dictated by operational requirements
to tender, it is doubtful whether the ZT is a typical well
because, by its very nature, it is not normally being used.
run undertaking.
Only if there were indications that the spare capacity had
also been used for normal operations (e.g. for the
disposal of category 3 material) would a different
conclusion follow. However, as this did not seem to be
(56) Consequently the Commission came to the provisional
the case, the annual contributions were only compen
conclusion that a detailed examination was needed to
sating the costs arising from the public service obligation
ascertain whether the annual contribution to the ZT is
to provide an epidemic reserve.
actually necessary to ensure that there is an epidemic
reserve or whether the market itself would not provide
sufficient free plant capacity in the event of an epidemic.
4.2. Second Altmark criterion
(57) Finally
doubts
were
cast
on
Germany’s
argument
that
the
(62) As to the transparency requirement, the BVerwG noted
annual contributions could be justified as compensation
that the Verbandsordnung had been modified on
for the clean-up costs of contaminated sites. Under
2 February 2010, immediately before the 2010
paragraph 132 of the Community guidelines on State
contributions were fixed. The BVerwG held that § 9 of
aid for environmental protection of 1 April 2008 ( 22 )
the 2010 Verbandsordnung made it clear that the annual
contributions only compensated for the cost of providing
( 22 ) OJ C 82, 1.4.2008, p. 1.
reserve capacity in the event of epidemics.

---

EN
1.9.2012 Official
Journal
of
the
European
Union L
236/9
4.3. Third Altmark criterion
(69) The
polluter
pays
principle
is
also
recognised
in
the
relevant German legislation, where farmers and slaughter
(63) The
modified
§
9
of
the
Verbandsordnung
ensured
that
houses are regularly referred to as polluters who must
the annual contributions only compensated for the cost
bear the disposal costs ( 24 ).
of providing of providing the epidemic reserve.
5.2. Second Altmark criterion
(64) Moreover, the BVerwG noted that the decision on the
size of the reserve was not a business decision that had
(70) The
complainant
maintains
that
the
ZT
only
began
to
to be taken on the basis of its economic cost-effec
claim that it had always been entrusted with the task of
tiveness. By its very nature, keeping reserve capacity for
providing reserve capacity after the national and
the outbreak of an epidemic is uneconomic because the
Commission investigations got under way. Until the
cost of this reserve is disproportionate to the likelihood
Verbandsordnung was modified in 2010 there had
of large-scale outbreaks of animal disease.
been no explicit entrustment act concerning the
provision of reserve capacity by the ZT nor had the
parameters for the calculation of the compensation
been set in advance.
4.4. Fourth Altmark-criterion
(65) The
BVerwG
held
that
it
was
not
possible
to
apply
the
fourth Altmark-criterion in this case because the disposal
5.3. Third Altmark Criterion
of category 1 and category 2 material is performed
(71) The complainant maintains that the requirement
to
separately from the disposal of category 3 material.
maintain an epidemic reserve does not entail any net
There is no overlap between the public and the
costs for animal disposal plants.
commercial services provided by the ZT while, in the
Altmark-case, a private bus company was subject to a
large number of public service requirements (e.g.
concerning number of stops and timetable) that substan
5.3.1. Epidemic reserve covered out of operational spare
tially changed the way in which the underlying transport
capacity
service was performed. The annual contributions to the
ZT therefore served to compensate it for the cost of
(72) German
animal
disposal
plants
are
generally
run
in
two
providing a public service outside the market.
shifts on five or six weekdays, with fluctuations of
+/– 5 % in terms of operating hours. Seasonal fluctu
ations in demand are dealt with by operating three
shifts in times of strong demand or scaling back to
(66) The
BVerwG
also
held
that
a
public
body
is
entitled
to
five-day two-shift operations when demand is weak.
carry out its public-interest tasks by itself without being
The Bckenhoff study ( 25 ) confirmed that the third shift
obliged to have recourse to private service providers. As
during the week and further shifts at weekends provide a
regards the case-law of the Court of Justice on public
sufficient epidemic reserve to cope with the increase