JUDGMENT OF THE GENERAL COURT (Fourth Chamber, Extended Composition)

21 March 2012 (*)

(State aid — Directive 92/81/EEC — Excise duty on mineral oils — Mineral oils used as fuel for alumina production — Exemption from excise duty — Whether the exemption complies with a Council decision of authorisation under Article 8(4) of Directive 92/81 — Presumption of legality attaching to European Union measures — Legal certainty — Sound administration)

In Joined Cases T‑50/06 RENV, T‑56/06 RENV, T‑60/06 RENV, T‑62/06 RENV and T‑69/06 RENV,

Ireland, represented initially by D. O’Hagan and subsequently by E. Creedon, acting as Agents, and P. McGarry, Barrister,

applicant in Case T‑50/06 RENV,

French Republic, represented by G. de Bergues and J. Gstalter, acting as Agents,

applicant in Case T‑56/06 RENV,

Italian Republic, represented by G. Aiello, G. De Bellis and S. Fiorentino, avvocati dello Stato,

applicant in Case T‑60/06 RENV,

Eurallumina SpA, established in Portoscuso (Italy), represented by R. Denton and L. Martin Alegi, Solicitors,

applicant in Case T‑62/06 RENV,

Aughinish Alumina Ltd, established in Askeaton (Ireland), represented by J. Handoll and C. Waterson, Solicitors,

applicant in Case T‑69/06 RENV,

v

European Commission, represented by V. Di Bucci, N. Khan, D. Grespan and K. Walkerová, acting as Agents,

defendant,

APPLICATION for annulment of Commission Decision 2006/323/EC of 7 December 2005 concerning the exemption from excise duty on mineral oils used as fuel for alumina production in Gardanne, in the Shannon region and in Sardinia respectively implemented by France, Ireland and Italy (OJ 2006 L 119, p. 12),

THE GENERAL COURT (Fourth Chamber, Extended Composition),

composed of I. Pelikánová (Rapporteur), President, V. Vadapalas, K. Jürimäe, K. O’Higgins and M. van der Woude, Judges,

Registrar: N. Rosner, Administrator,

having regard to the written procedure and further to the hearing on 14 September 2011,

gives the following

Judgment

 Background to the dispute

 Alumina

1        Alumina (or aluminium oxide) is a white powder principally used in smelters to produce aluminium. It is produced out of bauxite ore by a refining process, the last step of which consists in calcination. More than 90% of the calcinated alumina is used in the smelting of aluminium metal. The remainder is further processed and used in chemical applications. There are two separate product markets: smelter-grade alumina and chemical-grade alumina. Mineral oil may be used as fuel for alumina production.

2        There is only one producer of alumina in Ireland, in Italy and in France. These are, respectively, Aughinish Alumina Ltd (‘AAL’), established in the Shannon region, Eurallumina SpA, established in Sardinia, and Alcan Inc, established in the Gardanne region. Alumina producers are also present in Germany, Spain, Greece, Hungary and the United Kingdom.

 Directives on excise duties on mineral oils

3        Council Directive 92/81/EEC of 19 October 1992 on the harmonisation of the structures of excise duties on mineral oils (OJ 1992 L 316, p. 12) sets out the rules on excise duties on mineral oils.

4        Article 1(1) and (2) of Directive 92/81 provides that Member States are to impose a harmonised excise duty on mineral oils in accordance with the Directive and are to fix their rates in accordance with Directive 92/82/EEC of 19 October 1992 on the approximation of the rates of excise duty on mineral oils (OJ 1992 L 316, p. 19).

5        Article 8(4) of Directive 92/81 empowers the Council to authorise any Member State to introduce exemptions from harmonised excise duty other than those expressly provided for in that directive. It is worded as follows:

‘The Council, acting unanimously on a proposal from the Commission, may authorize any Member State to introduce further exemptions or reductions for specific policy considerations.

A Member State wishing to introduce such a measure shall inform the Commission accordingly and shall also provide the Commission with all relevant and necessary information. The Commission shall inform the other Member States of the proposed measures within one month.

The Council shall be deemed to have authorised the exemption or reduction proposed if, within two months of the other Member States’ being informed as laid down in the second subparagraph, neither the Commission nor any Member State has requested that the matter be considered by the Council.’

6        Article 8(5) of Directive 92/81 provides as follows:

‘If the Commission considers that the exemptions or reductions provided for in paragraph 4 are no longer sustainable, particularly in terms of fair competition or distortion of the operation of the internal market, or Community policy in the areas of protection of the environment, it shall submit appropriate proposals to the Council. The Council shall take a unanimous decision on these proposals.’

7        Article 6 of Directive 92/82 fixed the minimum rate of excise duty on heavy fuel oil which the Member States were to apply as from 1 January 1993 at EUR 13 per 1 000 kg.

8        Council Directive 2003/96/EC of 27 October 2003 restructuring the Community framework for the taxation of energy products and electricity (OJ 2003 L 283, p. 51) repealed Directives 92/81 and 92/82 with effect from 31 December 2003.

9        The second indent of Article 2(4)(b) of Directive 2003/96 states that the directive is not to apply to the dual use of energy products. According to that provision, an energy product has a dual use when it is used both as heating fuel and for purposes other than as motor fuel and heating fuel. The use of energy products for chemical reduction and in electrolytic and metallurgical processes is to be regarded as dual use. Thus, since 1 January 2004 there is no longer a minimum rate of excise duty on heavy fuel oil used for alumina production.

10      Moreover, Article 18(1) of Directive 2003/96 provides that, subject to a prior review by the Council, on the basis of a proposal from the Commission of the European Communities, the Member States are authorised to continue to apply the reductions in the levels of taxation or exemptions set out in Annex II until 31 December 2006. Sections 6, 7 and 8 of Annex II refer, inter alia, to the exemption from excise duty on heavy fuel oil used as fuel for alumina production in the region of Gardanne (France), the region of Shannon (Ireland) and in Sardinia (Italy) respectively.

 Council decisions adopted on the basis of Article 8(4) of Directive 92/81

11      Ireland, the Italian Republic and the French Republic have exempted mineral oils used in alumina production from excise duty since 1983, 1993 and 1997 respectively (‘the Irish exemption’, the ‘Italian exemption’ and ‘the French exemption’ or, collectively, ‘the exemptions at issue’).

12      The Irish exemption was introduced into Irish law by Statutory Instrument No 126/1983, Imposition of Duties (No 265) (Excise Duty on Hydrocarbon Oils) Order, 1983, of 12 May 1983. It was subsequently included in Section 100(1)(e) of the Finance Act, 1999. Its application to the Shannon region was authorised by Council Decision 92/510/EEC of 19 October 1992 authorising Member States to continue to apply existing reduced rates of excise duty or exemptions from excise duty, in accordance with the procedure provided for in Article 8(4) of Directive 92/81 (OJ 1992 L 316, p. 16) to certain mineral oils, when used for specific purposes. That authorisation was reviewed and extended by the Council until 31 December 1998 by Council Decision 97/425/EC of 30 June 1997 authorising Member States to apply or to continue to apply to certain mineral oils, when used for specific purposes, existing reduced rates of excise duty or exemptions from excise duty, in accordance with the procedure provided for in Directive 92/81 (OJ 1997 L 182, p. 22). It was further extended by the Council until 31 December 2000 by Council Decision 1999/880/EC of 17 December 1999 authorising Member States to apply or to continue to apply existing reduced rates of excise duty or exemptions from excise duty, in accordance with the procedure provided for in Directive 92/81 (OJ 1999 L 331, p. 73) to certain mineral oils, when used for specific purposes.

13      The Italian exemption was introduced into Italian law by decreto legislativo 26 ottobre 1995 n° 504, Testo unico delle disposizioni legislative concernenti le imposte sulla produzione e sui consumi e relative sanzioni penali e amministrative (Legislative Decree No 504 of 26 October 1995, Consolidated Text of Legislative Provisions relating to duties on production and consumption and related criminal and administrative penalties) (Ordinary Supplement to GURI No 279 of 29 November 1995). Its application to Sardinia was authorised until 31 December 1994 by Council Decision 93/697/EC of 13 December 1993 authorising certain Member States to apply or to continue to apply reduced rates of excise duty or exemptions from excise duty, in accordance with the procedure provided for in Article 8(4) of Directive 92/81 (OJ 1993 L 321, p. 29) to certain mineral oils, when used for specific purposes. That authorisation was first extended by the Council, until 31 December 1996, by Council Decision 96/273/EC of 22 April 1996 authorising certain Member States to apply or to continue to apply to certain mineral oils, when used for specific purposes, reduced rates of excise duty or exemptions from excise duty, in accordance with the procedure provided for in Article 8(4) of Directive 92/81 (OJ 1996 L 102, p. 40). It was extended a second time by the Council until 31 December 1998 by Decision 97/425. The authorisation was extended a third time by the Council, until 31 December 1999, by Council Decision 1999/255/EC of 30 March 1999 authorising, in accordance with Directive 92/81, certain Member States to apply or to continue to apply reduced rates of excise duty or exemptions from excise duty, and amending Decision 97/425 (OJ 1999 L 99, p. 26) to certain mineral oils. It was extended a fourth time by the Council, until 31 December 2000, by Decision 1999/880.

14      The French exemption was introduced into French law by Article 6 of the loi de finances rectificative pour 1997 n° 97‑1239 (Amending Finance Law for 1997 No 97‑1239) of 29 December 1997 (JORF, 30 December 1997, p. 19101). Its application to the Garonne region was authorised until 31 December 1998 by Council Decision 97/425. That authorisation was extended for the first time by the Council, until 31 December 1999, by Decision 1999/255. It was extended a second time by the Council, until 31 December 2000, by Decision 1999/880.

15      Council Decision 2001/224/EC of 12 March 2001 concerning reduced rates of excise duty and exemptions from such duty on certain mineral oils when used for specific purposes (OJ 2001 L 84, p. 23), that is, the last Council decision concerning the exemptions at issue, extended the authorisation to be applied to the exemptions until 31 December 2006. Recital 5 in the preamble thereto states that the decision is to be ‘without prejudice to the outcome of any procedures relating to distortions of the operation of the single market that may be undertaken, in particular under Articles 87 [EC] and 88 [EC]’ and that ‘[i]t does not override the requirement for Member States to notify instances of potential State aid to the Commission under Article 88 [EC]’.

 Administrative procedure

16      By letter of 28 January 1983, Ireland informed the Commission that it was planning to implement for the benefit of AAL an undertaking, given in April 1970 to the investors in a project for the extraction of alumina from bauxite in the Shannon estuary, relating to an exemption from excise duty on heavy fuel oil used in alumina production. By letter of 22 March 1983, the Commission indicated that the exemption constituted State aid which must be notified. It also stated that if the aid was only then to be implemented, the Commission could regard the letter of 28 January 1983 as a notification for the purpose of Article 93(3) of the EEC Treaty. By letter of 6 May 1983, Ireland requested the Commission to consider the letter as such. No decision was adopted by the Commission further to that correspondence.

17      By letters of 29 May and 2 June 1998, the Commission requested information from the Italian Republic and the French Republic respectively in order to verify whether the Italian exemption and the French exemption fell within the scope of Articles 87 EC and 88 EC. Following a reminder from the Commission of 16 June 1998, the Italian Republic replied on 20 July 1998. Having requested an extension of the period of time for reply on 10 July 1998, which was granted on 24 July 1998, the French Republic responded by letter of 7 August 1998.

18      By letters of 17 July 2000, the Commission requested the French Republic, Ireland and the Italian Republic to notify to it the exemptions at issue. The French authorities replied by letter of 4 September 2000. By letters of 27 September 2000, the Commission repeated its request to Ireland and the Italian Republic and sought further information from them and also from the French Republic. The Irish authorities replied to that request by letter of 18 October 2000. Following a reminder sent by the Commission on 20 November 2000, the Italian and French authorities also replied on 7 and 8 December 2000 respectively.

19      By Decisions C(2001) 3296, C(2001) 3300 and C(2001) 3295 of 30 October 2001, the Commission initiated the formal investigation procedure under Article 88(2) EC with regard to the Irish exemption, the Italian exemption and the French exemption respectively. Those decisions were notified to Ireland, the Italian Republic and the French Republic by letters of 5 November 2001 and were published on 2 February 2002 in the Official Journal of the European Communities (OJ 2002 C 30, pp. 17, 21 and 25).

20      The Commission received comments from AAL, Eurallumina, Alcan and the Association européenne de l’aluminium. The comments were communicated to Ireland, the Italian Republic and the French Republic on 26 March 2002.

21      Having requested an extension of the time-limit for response by fax of 1 December 2001, which was granted on 7 December 2001, Ireland submitted its comments by letter of 8 January 2002. By letter of 18 February 2002, the Commission requested Ireland to submit to it proof that it had given a binding undertaking in respect of AAL prior to its accession. Ireland complied with that request by letter of 26 April 2002. The Italian Republic submitted its comments by letter of 6 February 2002. After requesting an extension of the time-limit for responding by letter of 21 November 2001, granted on 29 November 2001, the French Republic submitted its comments by letter of 12 February 2002.

 The contested decision

22      On 7 December 2005, the Commission adopted Decision 2006/323/EC concerning the exemption from excise duty on mineral oils used as fuel for alumina production in Gardanne, in the Shannon region and in Sardinia respectively implemented by France, Ireland and Italy (OJ 2006 L 119, p. 12) (‘the contested decision’).

23      The contested decision relates to the period prior to 1 January 2004, when Directive 2003/96 became applicable. It nevertheless extended the formal investigation procedure to the period after 1 January 2004.

24      The enacting terms of the contested decision are worded as follows:

‘Article 1

The exemptions from excise duty granted by France, Ireland and Italy in respect of heavy fuel oils used in the production of alumina until 31 December 2003 constitute State aid within the meaning of Article 87(1) [EC].

Article 2

Aid granted between 17 July 1990 and 2 February 2002, to the extent that it is incompatible with the common market, shall not be recovered as this would be contrary to the general principles of Community law.

Article 3

The aid referred to in Article 1 granted between 3 February 2002 and 31 December 2003 is compatible with the common market within the meaning of Article 87(3) [EC] in so far as the beneficiaries pay at least a rate of EUR 13,01 per 1000 kg of heavy fuel oils.

Article 4

The aid … granted between 3 February 2002 and 31 December 2003 is incompatible with the common market within the meaning of Article 87(3) [EC] insofar as the beneficiaries did not pay a rate of EUR 13,01 per 1000 kg of heavy fuel oils.

Article 5

1.      France, Ireland and Italy shall take all necessary measures to recover from the beneficiaries the incompatible aid referred to in Article 4.

…

5.      France, Ireland and Italy shall order, within two months of the date of notification of this Decision, the beneficiaries of the incompatible aid referred to in Article 4 to repay the aid unlawfully granted plus interest.’

 Proceedings before the General Court and the Court of Justice

25      By applications lodged at the Registry of the General Court on 16 February 2006 (Case T‑60/06), 17 February 2006 (Cases T‑50/06 and T‑56/06) and 23 February 2006 (Cases T‑62/06 and T‑69/06) respectively, the applicants, namely the Italian Republic, Ireland, the French Republic, Eurallumina and AAL, brought the present actions for annulment in full or in part of the contested decision.

26      By separate document, received at the Registry of the General Court on 22 March 2006, AAL lodged an application for interim measures under Article 242 EC, seeking suspension of the operation of the contested decision in so far as it was concerned. By order of 2 August 2006 in Case T‑69/06 R Aughinish Alumina v Commission, not published in the ECR, the President of the General Court rejected that application and ordered that the costs be reserved.

27      Pursuant to Article 14 of the Rules of Procedure of the General Court and acting on a proposal from the Second Chamber, the General Court decided, after the parties had been heard in accordance with Article 51 of those rules, to refer the present cases to a Chamber sitting in extended composition.

28      By order of 24 May 2007, the President of the Second Extended Chamber of the General Court decided, having heard the parties, to join the present cases for the purposes of the oral procedure, in accordance with Article 50 of the Rules of Procedure.

29      By judgment of 12 December 2007 in Joined Cases T‑50/06, T‑56/06, T‑60/06, T‑62/06 and T‑69/06 Ireland and Others v Commission, not published in the ECR, the General Court joined the present cases for the purposes of the judgment. It annulled the contested decision on the ground that, in that decision, the Commission had failed to fulfil the obligation to state reasons imposed on it by Article 253 EC with regard to the non‑application in the present cases of Article 1(b)(v) of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article [88] EC (OJ 1999 L 83, p. 1). Moreover, in Case T‑62/06 the General Court rejected the action as to the remainder, having ruled inadmissible the heads of claim by which Eurallumina requested that the Court should either: (i) make a declaration to the effect that the Italian exemption authorised by Decision 2001/224 was lawful until 31 December 2006 and that all the sums forgone or to be forgone by the Italian Republic up to that date, or least until 31 December 2003, were not to be regarded as unlawful State aid or not to be recovered; or (ii) amend Articles 5 and 6 of the contested decision.

30      By application filed on 26 February 2008, the Commission lodged an appeal against the judgment of the General Court.

31      By its judgment on appeal in Case C‑89/08 P Commission v Ireland and Others [2009] ECR I‑11245, the Court of Justice set aside the judgment in Ireland and Others v Commission, paragraph 29 above, in so far as that judgment had annulled the contested decision on the ground that, in the decision, the Commission had failed to fulfil the obligation to state reasons with regard to the non‑application in the present cases of Article 1(b)(v) of Regulation No 659/1999 and had ordered the Commission to bear its own costs and to pay the applicants’ costs, including those relating to the proceedings for interim measures in Case T‑69/06 R. It also referred Joined Cases T‑50/06, T‑56/06, T‑60/06, T‑62/06 and T‑69/06 back to the General Court and ordered that the costs be reserved.

32      Following the judgment referring the cases back to the General Cour and pursuant to Article 118(1) of the Rules of Procedure, the present cases were assigned to the Second Chamber, Extended Composition, by decision of the President of the General Court of 18 December 2009.

33      In accordance with Article 119(1) of the Rules of Procedure, the parties lodged their statements of written observations on 1 February 2010 for Ireland in Case T‑56/06 RENV, 4 February 2010 for the Italian Republic in Case T‑60/06 RENV, 12 February 2010 for Eurallumina in Case T‑62/06 RENV, 16 February 2010 for the French Republic in Case T‑56/06 RENV and for AAL in Case T‑69/06 RENV, respectively, and 28 April 2010 for the Commission in respect of all the present cases. In its statement of written observations, the French Republic stated, in the light of the position adopted by the Court of Justice in its judgment referring the case back, that it was abandoning one of the pleas relied on in its application, alleging breach of the obligation to state reasons.

34      By order of 1 March 2010 of the President of the Second Chamber, Extended Composition, the present cases were joined for the purposes of the written procedure, the oral procedure and the judgment.

35      After a change in the composition of the Chambers of the General Court, the Judge-Rapporteur was assigned to the Fourth Chamber and the present cases were then assigned to the Fourth Chamber, Extended Composition, by decision of 20 September 2010.

36      On hearing the report of the Judge-Rapporteur, the Court decided to open the oral procedure and, by way of measures of organisation of procedure provided for in Article 64 of its Rules of Procedure, invited the parties and the Council of the European Union to reply to certain questions. The parties and the Council complied with that request within the period prescribed.

37      The parties presented oral argument and replied to the Court’s questions at the hearing on 14 September 2011.

 Forms of order sought by the parties in the proceedings after referral back to the General Court

38      In Case T‑50/06 RENV, Ireland claims that the Court should:

–        annul the contested decision in so far as it relates to the Irish exemption;

–        order the Commission to pay the costs.

39      In case T‑69/06 RENV, AAL claims that the Court should:

–        annul the contested decision in so far as it relates to AAL;

–        order the Commission to pay the costs.

40      In Case T‑60/06 RENV, the Italian Republic claims, in essence, that the Court should:

–        annul the contested decision in so far as it relates to the Italian exemption;

–        order the Commission to pay the costs.

41      In Case T‑62/06 RENV, Eurallumina claims, in essence, that the Court should:

–        annul the contested decision in its entirety or Articles 1 and 4 to 6 thereof or, in the alternative, Articles 5 and 6 of the decision, in so far as that decision or those provisions relate to Eurallumina;

and/or

–        declare that the Italian exemption, authorised by Decision 2001/224, is lawful until 31 December 2006 and that any sums forgone or to be forgone by the Italian Republic are not to be considered as unlawful State aid, or at least not recovered;

–        order the Commission to pay the costs.

42      In Case T‑56/06 RENV, the French Republic claims, in essence, that the Court should:

–        annul the contested decision in its entirety or, in the alternative, Article 5 of the decision, in so far as that decision or that provision relates to the French exemption;

–        order the Commission to pay the costs.

43      In the present cases, the Commission contends that the Court should:

–        dismiss the applications;

–        order the applicants to pay the costs.

 Law

 Eurallumina’s heads of claim seeking certain declaratory relief from the Court

44      It is no longer necessary to consider Eurallumina’s heads of claim seeking a declaration by the General Court to the effect that the Italian exemption authorised by Decision 2001/224 is lawful until 31 December 2006 and that all sums forgone or to be forgone by the Italian Republic should not be considered as unlawful State aid or, at least, not recovered. Those heads of claim have already been rejected as inadmissible by the judgment in Ireland and Others v Commission cited in paragraph 29 above. Since the parts of that judgment dealing with that point were not set aside in Commission v Ireland and Others cited at paragraph 31 above, they have acquired the force of res judicata.

 Summary of the pleas and grounds of complaint raised by the applicants

45      In support of their claims for annulment, the applicants rely, in essence, on a series of pleas and grounds of complaint which overlap to a certain extent, even though their purpose is formally different, since each of the applicants challenges the contested decision only in so far as, with regard to the Italian Republic (Case T‑60/06 RENV) and Eurallumina (Case T‑62/02 RENV), it relates to the Italian exemption, with regard to Ireland (Case T‑50/06 RENV) and AAL (Case T‑69/06 RENV), it relates to the Irish exemption, and, with regard to the French Republic (Case T‑56/06 RENV), it relates to the French exemption. Those pleas and grounds of complaint allege breach of the principle of legal certainty, the principle of the presumption of legality and effectiveness attaching to European Union measures, the principle of lex specialis derogat legi generali, the principle of sound administration, the principle of estoppel, the principle that decisions must be adopted within a reasonable time, the principle of protection of legitimate expectations, as well as infringement of Article 3(1)(m) EC, Article 87(1) and (3) EC, Article 88 EC and Article 157 EC, of the rules codified in Article (1)(b)(i), (iii) and (iv) of Regulation No 659/1999, of Article 14(1) and Articles 17 to 19 of that regulation, Article 18 of Directive 2003/96, read in conjunction with the provisions of Annex II thereto, the rules for environmental protection aid, in particular paragraph 82(a) of the Community guidelines on State aid for environmental protection (OJ 2001 C 37, p. 3), and the Guidelines on national regional aid (OJ 1998 C 74, p. 9), as well as breach of the obligation to state reasons.

46      First, it should be noted that the pleas and grounds of complaint raised by the applicants are directed inter alia at the result at which the Commission arrived in the contested decision by applying the rules on State aid to the exemptions at issue. The applicants submit, in essence, that that result could not lawfully counteract the legal effects produced by the Council’s decisions of authorisation, most recently by Decision 2001/224. That applies to the contested decision, which finds, or is based on the finding, that the exemptions at issue granted by the Italian Republic, Ireland and the French Republic until 31 December 2003 constitute State aid within the meaning of Article 87(1) EC and orders the recovery of such aid from the beneficiaries to the extent that it is incompatible with the common market, even though the Council had authorised the Member States concerned to apply those exemptions until 31 December 2006. Moreover, AAL argues that the application of the rules on State aid cannot, as a matter of law, lead in the present case to a result which is contrary to the aim pursued by Article 3(1)(m) EC and Article 157 EC, namely the safeguarding and strengthening of the competitiveness of European Union industry. Instead, the contested decision weakens the competitive position of European Union industry at international level.

47      Second, the pleas and grounds of complaint raised by the Italian Republic, the French Republic and AAL are directed inter alia against the contested decision in so far as it classifies, or is based on the Commission’s classification of, the exemptions at issue granted until 31 December 2003 as State aid within the meaning of Article 87(1) EC.

48      Third, the pleas and grounds of complaint raised by the Italian Republic, Ireland and AAL are directed against the contested decision in particular in so far as it classifies, or is based on the Commission’s classification of, the Italian exemption and the Irish exemption granted until 31 December 2003 — with the exception, as regards the latter, of the period before 17 July 1990 — as new aid, as opposed to existing aid within the meaning of Article 88 EC.

49      Fourth, the pleas and grounds of complaint raised by the Italian Republic are directed against the contested decision in particular in so far as it finds that the State aid purportedly granted until 31 December 2003 on the basis of the Italian exemption cannot be deemed compatible with the common market within the meaning of Article 87(3) EC on the ground that that aid was closely linked to Eurallumina’s attainment of environmental protection objectives or that it facilitated economic development in Sardinia.

50      Fifth, the pleas and grounds of complaint relied on by the applicants are directed against the contested decision in particular in so far as it orders the French Republic, Ireland and the Italian Republic to recover from the beneficiaries the State aid purportedly granted until 31 December 2003 on the basis of the exemptions at issue.

51      In the present case, it is appropriate to examine, first of all, the pleas and grounds of complaint raised by the applicants which allege, in essence, the unlawful application of the rules on State aid to the exemptions at issue granted by the Italian Republic, Ireland and the French Republic until 31 December 2003 on the basis of and in conformity with the Council’s decisions of authorisation, most recently Decision 2001/224.

 The pleas and grounds of complaint alleging unlawful application of the rules on State aid to the exemptions granted on the basis of the Council’s decisions of authorisation and in conformity with those decisions

52      In Case T‑50/06 RENV, in its second and fourth pleas, Ireland submits that, in the contested decision, the Commission infringed the principle of legal certainty and the principle of estoppel in concluding that the Irish exemption granted until 31 December 2003 was partially incompatible with the common market, in the light of the rules on State aid, even though that exemption had been granted on the basis of the Council’s decisions of authorisation, most recently Decision 2001/224, and in conformity with those decisions. It observes that the Commission has never disputed the legality of the Council’s decisions authorising the exemptions. Moreover, by its fourth plea, Ireland claims, in particular, that the Commission infringed the principle of estoppel in the contested decision in that it applied the rules on State aid to the Irish exemption too long after the date on which it became aware of the aid purportedly granted on the basis of that exemption.

53      In Case T‑56/06 RENV, in its second plea, the French Republic complains that the Commission infringed the principle of legal certainty in the contested decision in that it ordered the recovery of the aid purportedly granted between 3 February 2002 and 31 December 2003 on the basis of the French exemption, even though it had been authorised to apply that exemption by the Council’s decisions of authorisation, most recently by Decision 2001/224.

54      In Case T‑60/06 RENV, in its sixth plea, the Italian Republic claims that, in the contested decision, the Commission infringed inter alia the principle of the presumption of legality attaching to European Union measures in that it ordered the recovery of the aid purportedly granted between 3 February 2002 and 31 December 2003 on the basis of the Italian exemption, even though it had been authorised to apply that exemption by the Council’s decisions of authorisation, most recently by Decision 2001/224.

55      In Case T‑62/06 RENV, in its second plea, Eurallumina complains that, in the contested decision, the Commission infringed the principle of legal certainty, the principle of the presumption of legality and effectiveness attaching to European Union measures and the principle of lex specialis derogat legi generali in that it concluded that the Italian exemption granted until 31 December 2003 was partially incompatible with the common market, in the light of the rules on State aid, even though that exemption was granted on the basis of the Council’s decisions of authorisation, most recently by Decision 2001/224, and in conformity with those decisions. Moreover, in its third plea, Eurallumina submits that the Commission infringed the principle of sound administration in the contested decision in that it ordered the recovery of the aid purportedly granted between 3 February 2002 and 31 December 2003 on the basis of the Italian exemption without taking account of the fact that the Italian Republic had been authorised to apply that exemption by the Council’s decisions of authorisation, most recently by Decision 2001/224.

56      In Case T‑69/06 RENV, in its second plea, AAL complains, in particular, that the Commission infringed the principle of legal certainty, the principle of the effectiveness of European Union measures and the principle lex specialis derogat legi generali and also exceeded its powers in the contested decision in that it concluded that the Irish exemption granted until 31 December 2003 was partially incompatible with the common market in the light of the rules on State aid, even though that exemption had been granted on the basis of the Council’s decisions of authorisation, most recently by Decision 2001/224, and in conformity with those decisions. Moreover, in its fifth plea, AAL submits that, in the contested decision, the Commission infringed the principle of legal certainty, the principle that decisions must be adopted within a reasonable time and the principle of sound administration in so far as it applied the rules on State aid to the Irish exemption too long after the date on which it became aware of that exemption. Lastly, in its fourth plea, AAL contends that the Commission infringed, in particular, the principle of legal certainty by adopting the contested decision, in which it ordered the recovery of the aid which was purportedly granted to it between 3 February 2002 and 31 December 2003 on the basis of the Irish exemption, even though Ireland had been authorised to apply that exemption by the Council’s decisions of authorisation, most recently by Decision 2001/224.

57      In Cases T‑50/06 RENV, T‑56/06 RENV, T‑60/06 RENV, T‑62/06 RENV and T‑69/06 RENV, the Commission disputes all the arguments put forward by the applicants and contends that the Court should reject the pleas and grounds of complaint which allege that, in the contested decision, it unlawfully applied the rules on State aid to the exemptions granted on the basis of the Council’s decisions of authorisation and in conformity with those decisions.

58      In accordance with the principle of procedural economy, it is appropriate to examine, first, the pleas and grounds of complaint alleging infringement of the principle of legal certainty and/or the principle of the presumption of lawfulness attaching to European Union measures. By those pleas and grounds, the applicants essentially complain that, in the contested decision, by deciding that the exemptions at issue granted by the Italian Republic, Ireland and the French Republic until 31 December 2003 constitute State aid within the meaning of Article 87(1) EC and ordering that the aid be recovered from the beneficiaries to the extent that it is incompatible with common market, the Commission partially nullified the legal effects produced by the Council’s decisions of authorisation, most recently Decision 2001/224, which authorised the Member States concerned to apply those exemptions until 31 December 2006.

59      It should be noted in that regard that acts of the institutions of the European Union are in principle presumed to be lawful and, accordingly, produce legal effects until such time as they are withdrawn, annulled in an action for annulment or declared invalid following a reference for a preliminary ruling or a plea of illegality (see, Case C‑475/01 Commission v Greece [2004] ECR I‑8923, paragraph 18 and case-law cited).

60      By way of exception to that principle, measures tainted by an irregularity whose gravity is so obvious that it cannot be tolerated by the European Union legal order must be treated as having no legal effect, even provisional, that is to say, they must be regarded as legally non-existent. The purpose of this exception is to maintain a balance between two fundamental, but sometimes conflicting, requirements with which a legal order must comply, namely, stability of legal relations and respect for legality (see Commission v Greece, paragraph 59 above, paragraph 19 and the case‑law cited).

61      The gravity of the consequences attaching to a finding that a measure of a Community institution is non-existent presupposes that, for reasons of legal certainty, such a finding be reserved for quite extreme situations (see Commission v Greece, paragraph 59 above, paragraph 20 and the case‑law cited).

62      It is also settled case‑law that the principle of legal certainty aims to ensure that situations and legal relationships governed by European Union law remain foreseeable (Case C‑305/00 Schulin [2003] ECR I‑3525, paragraph 58, and Case C‑199/03 Ireland v Commission [2005] ECR I‑8027, paragraph 69). To that end, it is essential that the European Union institutions observe the principle that they may not alter measures which they have adopted and which affect the legal and factual situation of persons, so that they may amend such acts only in accordance with the rules on competence and procedure (see Case T‑229/94 Deutsche Bahn v Commission [1997] ECR II‑1689, paragraph 113 and the case‑law cited). However, breach of the principle of legal certainty cannot effectively be pleaded if the person whose legal and substantive position was affected by the decision in question did not observe the conditions laid down in that decision (see Case T‑37/97 Forges de Clabecq v Commission [1999] ECR II‑859, paragraph 98 and the case‑law cited). Respect for the principle of legal certainty also requires that the institutions of the European Union must, as a matter of principle, avoid inconsistencies that might arise in the implementation of the various provisions of European Union law. This is all the more necessary when those provisions pursue the same objective, such as undistorted competition in the common market (see, to that effect and by analogy, Case C‑225/91 Matra v Commission [1993] ECR I‑3203, paragraphs 41 and 42, and Case T‑156/98 RJB Mining v Commission [2001] ECR II‑337, paragraph 112 and the case‑law cited).

63      Moreover, in so far as the pleas and grounds of complaint under consideration raise the question of the relationship between the rules governing the harmonisation of fiscal legislation, including the rules on excise duties, and the rules on State aid, the following matters should be noted.

64      At the material time, Article 2 EC provided, inter alia, that the Community’s task was to be achieved ‘by establishing a common market’. For the purposes set out in Article 2 EC, Article 3(1)(c) and (g) EC provided that the activities of the Community were to include, as provided in the EC Treaty and in accordance with the timetable set out therein, ‘an internal market characterised by the abolition, as between Member States, of obstacles to the free movement of goods, persons, services and capital’ and ‘a system ensuring that competition in the internal market is not distorted’.

65      The EC Treaty empowered the Community to take measures to eliminate various types of distortion that harmed the proper functioning of the internal market.

66      The purpose of Article 93 EC is to reduce obstacles to trade resulting from differences between domestic systems of taxation, even when they are applied in a non-discriminatory manner (Case 171/78 Commission v Denmark [1980] ECR 447, paragraph 20). In the version in force at the material time, it provided that ‘[t]he Council, acting unanimously on a proposal from the Commission and after consulting the European Parliament and the Economic and Social Committee, [was to] adopt provisions for the harmonisation of legislation concerning turnover taxes, excise duties and other forms of indirect taxation to the extent that such harmonisation [was] necessary to ensure the establishment and the functioning of the internal market within the time limit laid down in Article 14’. Thus, under Article 93 EC, the Council was empowered to harmonise domestic legislation on excise duty to the extent necessary to ensure the establishment and the functioning of the internal market (see, to that effect, Case C‑166/98 Socridis [1999] ECR I‑3791, paragraph 25, and the Opinion of Advocate General Mischo in that case, ECR I‑3793, paragraph 53).

67      It is clear from the preamble to and Article 1(1) of Directive 92/81, adopted on the basis of Article 93 EC, that the directive is intended, through harmonisation of excise duties on mineral oils, to give effect to the free movement of the products concerned and thereby promote the proper functioning of the internal market (Case T‑184/97 BP Chemicals v Commission [2000] ECR II‑3145, paragraph 61).

68      Moreover, it is apparent from the sixth recital and Article 8(4) of Directive 92/81 that, in the areas covered by the harmonisation of excise duties on mineral oils, further exemptions may not be introduced unilaterally by Member States, but require the intervention of the Council, which, acting unanimously on a proposal from the Commission, may authorise Member States to apply such derogations for specific policy considerations if and for so long as that is compatible with the proper functioning of the internal market.

69      The sixth recital of Directive 92/81 thus states that ‘it is appropriate to permit Member States to apply on an optional basis certain other exemptions or reduced rates within their own territory where this does not give rise to distortions of competition’. It is clear from that recital that the whole of Article 8(4) of Directive 92/81 must be interpreted in the light of the distortions of competition which may arise as a result of the measures applying that provision (see, to that effect an by analogy, BP Chemicals v Commission, paragraph 67 above, paragraph 62).

70      That is confirmed by the eighth recital of Directive 92/81, which refers to the need ‘to provide for a review procedure for all the exemptions or reduced rates provided for in this Directive in order to monitor their continued compatibility with the proper functioning of the internal market’, and by Article 8(5) of the directive, which provides that the Council, taking a unanimous decision on a proposal from the Commission, is to review its decisions of authorisation if the Commission considers that the exemptions or reductions that have been authorised are no longer sustainable, particularly in terms of unfair competition or distortion of the operation of the internal market.

71      Distortions of competition deriving from State aid are examined by the Commission under a system of prior Commission authorisation, which is subject to review by the European Union courts. Under Article 88(3) EC, State aid measures must be notified to the Commission. That procedure applies to all State aid, including fiscal aid. Member States may not put their proposed measures into effect without the Commission’s prior approval. The Commission’s examination as to compatibility with the internal market is based not on the form which such aid may take, but in terms of its effect. The principle of incompatibility with the common market set out in Article 87 EC applies to aid ‘in any form whatsoever’, including certain fiscal measures. The Commission may decide that the Member State concerned must amend or abolish aid which it finds incompatible with the internal market. Where the aid has already been implemented in breach of the procedural rules, the Member State must in principle recover it from the recipients.

72      It is apparent from paragraphs 64 to 71 above that the rules governing the harmonisation of domestic fiscal legislation, including the rules on excise duties, laid down in Article 93 EC and in Directive 92/81, and the rules on State aid set out in Articles 87 EC to 89 EC pursue the same objective, namely to promote the proper functioning of the internal market by combating, especially, distortion of competition. In the light of their common objective, and contrary to the view advocated by the Commission, in order for those different rules to be implemented consistently, the notion of distortion of competition must be regarded as having the same scope and the same meaning with regard to both the harmonisation of domestic fiscal legislation and State aid. Moreover, it is clear from paragraphs 66 to 70 above that the rules governing the harmonisation of domestic fiscal legislation, including the rules on excise duties, laid down in Article 93 EC and in Directive 92/81 expressly confer on the European Union institutions — that is to say, the Commission, which submits a proposal and the Council, which enacts a measure — the responsibility for assessing whether competition may be distorted. The purpose of this is to decide whether or not to authorise a Member State to apply, or continue to apply, an exemption from the harmonised excise duty under Article 8(4) of Directive 92/81, or whether there may be unfair competition or distortion of the operation of the internal market justifying a review of an authorisation already granted under that provision, as provided for in Article 8(5) of Directive 92/81. If there is a negative assessment, the Commission must propose to the Council that it should not authorise the exemption sought or, where appropriate, amend or abolish the authorisation for exemption already granted. If the Council arrives at a different assessment, the Commission may have recourse to its powers under Article 230 EC to bring an action before the European Union courts for annulment of the Council’s decision to authorise an exemption or to maintain an authorisation for exemption already granted so that those courts may review whether, from an objective point of view, there is no distortion of competition, unfair competition or distortion of the operation of the internal market as a result of such exemption.

73      Lastly, it should be recalled that, according to case‑law, the concept of State aid within the meaning of Article 87(1) EC corresponds to an objective situation and does not depend on the conduct or statements of the institutions (see, to that effect, Commission v Ireland and Others, paragraph 31 above, paragraph 72). Article 87(1) EC states that any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods is incompatible with the common market, in so far as it affects trade between Member States. That provision therefore applies to the decisions of Member States by which, in pursuit of their own economic and social objectives, they give, by unilateral and autonomous decisions, resources to undertakings or other persons or procure for them advantages intended to encourage the attainment of the economic or social objectives sought (Case 61/79 Denkavit italiana [1980] ECR 1205, paragraph 31, and Case T‑351/02 Deutsche Bahn v Commission [2006] ECR I‑1047, paragraph 100).

74      Therefore, for advantages to be capable of being categorised as aid within the meaning of Article 87(1) EC, they must, in particular, be imputable to the State (see Case C‑482/99 France v Commission [2002] ECR I‑4397, paragraph 24 and the case-law cited, and Deutsche Bahn v Commission, paragraph 73 above, paragraph 101), bearing in mind that the imputability of aid to a State is separate from the question whether aid was granted through State resources (see Deutsche Bahn v Commission, paragraph 103 and the case‑law cited).

75      It is necessary to examine in the light of the rules referred to at paragraphs 59 to 74 above whether, as the applicants maintain, the Commission infringed the principle of legal certainty and the principle of the presumption of legality attaching to European Union measures in so far as it nullified certain legal effects produced by the Council’s decisions of authorisation, most recently by Decision 2001/224, by applying, in the contested decision, the rules on State aid to the exemptions at issue that were granted until 31 December 2003.

76      In the present case, the Commission does not dispute that the Italian Republic, Ireland and the French Republic relied on the Council’s decisions of authorisation, most recently on Decision 2001/224, in order to apply or continue to apply the exemptions at issue until 31 December 2003 in Sardinia, the Shannon region and the Gardanne region for the benefit of Eurallumina, AAL and Alcan respectively. As observed at paragraph 68 above, those decisions were an essential prerequisite for enabling the Member States concerned to grant those exemptions lawfully. Moreover, as is clear from recital 99 of the contested decision, the Commission accepts that ‘the Member States … were entitled to rely on the wording of Decisions 92/510/EEC, 93/697/EC, 96/273/EC, 97/425/EC, 1999/255/EC, 1999/880/EC and 2001/224/EC’.

77      The Council’s decisions of authorisation, most recently Decision 2001/224, authorised, in clear and unambiguous terms, the Italian Republic, Ireland and the French Republic to apply or continue to apply exemptions from excise duty on mineral oils used as fuel for alumina production in Sardinia, the Shannon region and the Gardanne region respectively, most recently until 31 December 2006, subject only to the possibility of prior review by the Council, on the basis of a proposal submitted by the Commission in accordance with the procedure laid down in Article 8(5) of Directive 92/81 (see paragraph 6 above). In so far as certain restrictive conditions of a geographical and temporal nature were attached to them, those decisions were binding on the Member States concerned, a fact which was, moreover, taken into account by the Commission in recitals 17 and 63 of the contested decision.

78      It is not disputed that the Italian Republic, Ireland and the French Republic fully complied with the restrictive conditions of a geographical and temporal nature imposed by the Council’s decisions of authorisation. They applied or continued to apply the exemptions at issue only in the regions indicated in the Council’s decisions of authorisation, that is, in Sardinia, the Shannon region and the Gardanne region respectively. Moreover, they granted the exemptions at issue during the period in which the Council’s decisions of authorisation produced their effects, namely the period up to 31 December 2006.

79      The Commission argues that the Council’s decisions of authorisation, although an essential prerequisite for enabling the Member States concerned to grant the exemptions at issue, were not in themselves sufficient to do so. In its view, those decisions were without prejudice to the fact that, if the exemptions at issue constituted State aid within the meaning of Article 87(1) EC, they had to be notified to the Commission and authorised by it, in accordance with Article 88 EC. It contends that the conditional nature of Council decisions of authorisation, as opposed to any subsequent application of State aid procedures and rules, is attested by recital 5 of Decision 2001/224, which expressly refers to any procedures and Commission decisions under Articles 87 EC and 88 EC.

80      In that regard it should be noted, first, that, as the Commission itself accepted at recital 97 of the contested decision, the Council’s decisions of authorisation prior to Decision 2001/224 ‘[did not] mention any possible contradiction with the State aid rules nor did they make any reference to the obligation to notify’. The Council cannot therefore be regarded as having expressly made the effects produced by those decisions conditional on the requirement that the Member States concerned notify the exemptions at issue to the Commission, in accordance with Article 88 EC, and that the Commission adopt a decision not to raise any objection or a positive State aid decision.

81      Second, contrary to the Commission’s contention, recital 5 of Decision 2001/224, as partially reproduced at paragraph 15 above, cannot be construed as an express manifestation of the Council’s intention to make the effects of its authorisation conditional on compliance by the Member States concerned with their obligation to notify the exemptions at issue to the Commission, in accordance with Article 88 EC, and on the Commission’s adopting a decision not to raise any objections or a positive decision in that regard, for the reasons set out below.

82      The principle reason is that the interpretation of recital 5 of Decision 2001/224 advocated by the Commission was implicitly but necessarily rebutted by the Council in its reply to the questions put by the Court (see paragraph 36 above). Invited to express its view on whether an examination of the exemptions at issue in the light of the rules on State aid, resulting, as in the present case, in a final negative decision by the Commission, was capable of putting an early end to those exemptions, notwithstanding the terms of Article 1 of Decision 2001/224, according to which the Italian Republic, Ireland and the French Republic were authorised to continue to apply the exemptions at issue until 31 December 2006, the Council replied that, in the absence of any action on the part of the Commission, either by exercising the powers conferred on it by Article 230 EC or by submitting a fresh proposal under Article 8(4) of Directive 92/81, as provided for in Article 8(5) thereof, ‘Decision 2001/224 remained valid and the Member States [concerned] were entitled to rely on its authorisation to maintain the contested exemptions’. It is clear from that reply that the Council did not intend make the effects of Decision 2001/224 conditional on any subsequent procedures or Commission decisions relating to State aid.

83      In any event, the interpretation advocated by the Commission of recital 5 of Decision 2001/224 and of the reference in that recital to any procedures and decisions under Articles 87 EC and 88 EC cannot be accepted since it would result, in the circumstances of the present case, in inconsistent implementation of the rules governing the harmonisation of fiscal legislation, including the rules on excise duty, and the rules on State aid, which would be contrary to the requirements arising from respect for the principle of legal certainty (see paragraph 62 above).

84      First, that interpretation does not lead to a consistent implementation of the various rules of European Union law which are relied on in the present case, since the rules set out at paragraphs 66 to 68 above provide that the successive decisions of authorisation adopted by the Council, acting unanimously on a proposal from the Commission, were based on a common assessment by the Council and the Commission that the exemptions at issue did not give rise to distortions of competition or interfere with the working of the internal market, with the result that one of the elements of the definition of State aid within the meaning of Article 87 EC, namely the requirement that it distorts competition, is a priori lacking.

85      That joint assessment on the part of the Council and the Commission is confirmed by the fourth recital of Decision 92/510, which states that ‘it is accepted by the Commission and by all Member States that all of these exemptions … do not give rise to distortions in competition or interfere with the working of the internal market’, and by a similar consideration referred to in the fourth recital of Decision 93/697 and Decision 96/273.

86      It is also confirmed by the judgment in Commission v Ireland and Others, paragraph 31 above (paragraph 83), where the Court of Justice states that ‘the Commission had taken the view, when the decisions authorising the exemptions at issue were adopted by the Council, that those exemptions did not give rise to distortions in competition or interfere with the working of the internal market’.

87      It is also confirmed by the Council in its reply to the questions put by the Court (see paragraph 36 above) when it states that ‘acting on the basis of the powers conferred upon it in the framework of Article 93 EC, and therefore having taken account of the requirement of the proper functioning of the internal market, it authorised the three Member States concerned, in a situation known to it to comprise three specific beneficiaries and three other operators in other Member States also producing alumina, to maintain in force [the exemptions at issue], whose content, extent and effect were well known to both [it] and the Commission, until a fixed date’.

88      Moreover, according to the joint assessment of the Council and the Commission in the fifth recital of Decision 97/425, the fourth recital of Decision 1999/255, recital 4 of Decision 1999/880 and, in the same terms, in the fourth recital of Decision 1999/255, it was provided that ‘the … exemptions [would] be regularly reviewed by the Commission to ensure that they [were] compatible with the operation of the internal market and other objectives of the [EC] Treaty’.

89      Lastly, the Commission itself accepted, at recital 97 of the contested decision, that when the decisions of authorisation, most recently Decision 2001/224, were adopted by the Council, acting unanimously on a proposal from the Commission, ‘it appear[ed] that one of the elements of the definition of State aid in Article 87 of the Treaty, namely the distortion of competition, [was] missing’.

90      In the light of the joint assessment of the Council and the Commission, which served as the basis for all the Council’s decisions of authorisation, to the effect that the exemptions at issue did not give rise to distortions in competition or interfere with the working of the internal market, it would be inconsistent to interpret recital 5 of Decision 2001/224 and the reference in that recital to any procedures or decisions under Articles 87 EC and 88 EC as meaning that the Council intended to make the effects of Decision 2001/224 conditional upon any procedures or Commission decisions relating to State aid. On the contrary, that common assessment is consistent with the opposite interpretation, namely that the Council did not intend to make the effects of Decision 2001/224 conditional upon the outcome of any subsequent procedures or decisions relating to State aid.

91      Second, the interpretation advocated by the Commission does not lead to a consistent implementation of the various rules of European Union law which are relied on in the present case, because the fact that the exemptions at issue were regionally selective was a direct consequence of the Council’s decisions of authorisation, which defined the restrictive conditions for the application of the exemptions at issue on a geographical basis. As the Commission itself stated in recitals 17 and 63 of the contested decision, the exemptions at issue could not, contrary to the provisions of the relevant national legislation, be applied throughout the territory of the Member States concerned but only in the regions specified in Annex I to Decision 2001/224, to which Article 1(1) of that decision referred, and, as stated in recital 63 of the contested decision, they ‘were regionally selective, because these Decisions [of authorisation on the part of the Council] only authorised exemptions in certain regions and potential investors interested to make investments in alumina production in other regions could not be sure to receive similar treatment’. Consequently, the fact that those measures were regionally selective could not a priori be attributed to the Member States concerned but was an effect of the Council’s decisions of authorisation.

92      In view of the fact that the regionally selective nature of the exemptions at issue was the result, not of unilateral and autonomous decisions of the Member States concerned, but of the Council’s decisions of authorisation, it would be inconsistent to interpret recital 5 of Decision 2001/224 and the reference in that recital to any procedures and decisions under Articles 87 EC and 88 EC, as meaning that the Council intended to make the effects of Decision 2001/224 conditional upon any procedures and Commission decisions relating to State aid. On the contrary, that fact is consistent with the opposite interpretation, namely that the Council did not intend to make the effects of Decision 2001/224 conditional upon the outcome of any subsequent procedures or decisions relating to State aid.

93      Third, the interpretation advocated by the Commission does not lead to a consistent implementation of the various rules of European Union law which are relied on in the present case, since the fact that the Italian Republic, Ireland and the French Republic did not apply the minimum rate of excise duty set by Directive 92/82, which, for the period under consideration, was EUR 13 per 1 000 kg, was consistent with the Council’s decisions of authorisation, most recently Decision 2001/224, which authorised the Member States concerned to apply or continue to apply the exemptions at issue until 31 December 2006. As the Commission itself stated at recital 76 of the contested decision, ‘all three exemptions [authorised by the Council] were full exemptions’. They were thus distinguished from the reduced rates of excise duty or the application of differential rates of excise duty which were authorised by the Council’s decisions of authorisation, most recently Decision 2001/224, subject to the express condition that the rates applied complied with the requirements laid down in Directive 92/82, including the minimum rates of excise duty set by that directive. Consequently, the non‑payment by Eurallumina, AAL and Alcan before 31 December 2006 of duty corresponding at least to the minimum rate of excise duty set by Directive 92/82, which, for the period in question, was EUR 13 per 1 000 kg, can be attributed to the Council’s decisions authorising the Italian Republic, Ireland and the French Republic to continue to apply, until that date, full exemptions from excise duty on mineral oils used as fuel for alumina production in Sardinia, the Shannon region and the Garonne region respectively.

94      In view of the nature of the measures which it authorised, namely full exemptions from excise duty, as opposed to reduced rates of excise duty which complied with the minimum rate of excise duty set by Directive 92/82, it would have been paradoxical if, by recital 5 of Decision 2001/224, the Council had intended to express its intention to make the effects of that decision conditional upon a subsequent Commission decision relating to State aid, such as the contested decision, under which — subject to the requirement that the rates applied complied with the minimum rate of excise duty of EUR 13 per 1 000 kg set by Directive 92/82 (see recital 76 and Article 4 of the contested decision) — only reduced rates of excise duty could lawfully be implemented by the Member States concerned. On the contrary, the nature of the measures authorised by the Council is consistent with the opposite interpretation, namely that the latter did not intend to make the effects of Decision 2001/224 conditional upon the outcome of any subsequent procedures or decisions relating to State aid.

95      It is apparent from paragraphs 83 to 94 above that recital 5 of Decision 2001/224 and the reference in that recital to any procedures or Commission decisions under Articles 87 EC and 88 EC cannot, contrary to the Commission’s contention, relate to cases in which Member States apply reduced rates of excise duty or exemptions from excise duty by complying purely and simply with an authorisation granted by a European Union institution (see, to that effect and by analogy, Commission v Greece, paragraph 59 above, paragraphs 15, 16, 24 and 25, and Case C‑582/08 Commission v United Kingdom [2010] ECR I‑7195, paragraphs 47 to 52). Such an interpretation would be at odds with the overriding need to ensure consistent implementation of the various provisions of European Union law which are relied on in the present case, a need which itself stems from the principle of legal certainty (paragraph 62 above). That recital and that reference therefore relate, a priori, to situations other than those in the present case, in which Member States apply reduced rates of excise duty or exemptions from excise duty by exercising a margin of discretion reserved to them by European Union law (see, to that effect, Deutsche Bahn v Commission, paragraph 73 above, paragraph 113; see also to that effect and by analogy, Socridis, paragraph 66 above, paragraphs 19 and 20) or by failing to comply with the conditions expressly laid down by that law to ensure the proper functioning of the internal market, such as the minimum rates of excise duty set in Directive 92/82.

96      Accordingly, there is no basis for the Commission’s claim that, by continuing to apply the exemptions at issue during the period up to 31 December 2003, the Italian Republic, Ireland and the French Republic disregarded a condition laid down in the Council’s decisions of authorisation, including Decision 2001/224, which made the effects produced by those decisions conditional upon the outcome of any subsequent procedures and Commission decisions relating to State aid.

97      It follows that all the conditions laid down in the Council’s decisions of authorisation, most recently Decision 2001/224, were complied with by the Member States concerned, so that they granted the exemptions at issue until 31 December 2003 not only in reliance on the Council’s decisions of authorisation but also in pure and simple compliance with the conditions laid down in those decisions.

98      Moreover, it is necessary to reject the Commission’s arguments that the Council’s decisions of authorisation, most recently Decision 2001/224, could not have the effect in any event of freeing the Italian Republic, Ireland and the French Republic from their obligation to comply with State aid rules and procedures and that the Council was not entitled, in exercising its powers in fiscal harmonisation matters, to encroach on the Commission’s virtually exclusive powers relating to State aid. As is apparent from the case‑law cited at paragraphs 73 and 74 above, in order to be classified as State aid within the meaning of Article 87(1) EC, any advantages which the exemptions at issue might have conferred on their beneficiaries would have had to be attributable to a unilateral and autonomous decision of the Member States concerned. In the present case, however, those Member States granted the advantages in question in reliance of the Council’s decisions of authorisation, most recently Decision 2001/224, and complied with all the conditions set out in those decisions. As the applicants correctly observed in their replies to the questions put by the Court and at the hearing, those advantages must therefore be imputed to the European Union, which, through one of its institutions, authorised the Italian Republic, Ireland and the French Republic to continue to apply the exemptions at issue until 31 December 2006 on the ground, inter alia, that those exemptions did not give rise to distortion of competition.

99      It follows that, as long as the Council’s decisions of authorisation, most recently Decision 2001/224, remained in force and had not been amended by the Council or annulled by the European Union courts, the Commission was not entitled, even in the exercise of its virtually exclusive powers under Articles 87 EC and 88 EC, to classify the exemptions at issue as State aid within the meaning of Article 87(1) EC. Moreover, since the procedural requirements laid down in Article 88 EC stemmed from the classification of the measures in question as State aid within the meaning of Article 87(1) EC, there is no basis for the Commission’s complaint that the Member States concerned failed to notify to it the exemptions at issue which they had granted until 31 December 2003 on the basis of the Council’s decisions of authorisation, most recently Decision 2001/224, and in compliance with the conditions laid down in those decisions.

100    Although responsible for so doing (see paragraph 72 above), the Commission never used the powers available to it to seek amendment or abolition of the Council’s decisions of authorisation, most recently Decision 2001/224, annulment of those decisions or a declaration to the effect that Directive 92/81 is invalid, either in its entirety or only as regards Article 8(4) of the directive. The Commission itself recognised, at recital 96 of the contested decision, that ‘[o]ne would generally not expect [it] to submit proposals to the Council authorising national measures that may be held incompatible with other provisions of the Treaty without hinting at such a possibility, especially when the proposals concern a very specific issue and a small number of beneficiaries, as in this case, and when those provisions are intended to avoid distortions of competition within the Community’, or ‘expect [it] to propose that the Council authorise an extension of an existing exemption, if it were to consider that any aid in the existing exemption could be found incompatible with the common market’. Similarly, it was not to be expected, having regard to the Commission’s obligation to ensure that the rules on State aid are implemented in a manner that is consistent with the other provisions of European Union law applicable to the exemptions at issue (paragraph 61 above), that the Commission — if it considered that certain effects produced by the Council’s decisions of authorisation or by Directive 92/81 were incompatible with the rules on State aid — would have refrained from exercising its powers to secure an amendment or partial annulment of those decisions, or a declaration to the effect that Article 8(4) of Directive 92/81, on the basis of which those decisions were adopted, was invalid.

101    The fact that it was not possible in the present case to classify the exemptions at issue as State aid within the meaning of Article 87(1) EC does not alter the fact that they were still governed by Article 8(5) of Directive 92/81, so that they may have been subject to ‘any procedures relating to distortions of the operation of the single market’, as provided for in recital 5 of Decision 2001/224. Article 1(2) of Decision 2001/224 thus confirms that the authorisation granted by the Council was to expire on 31 December 2006 ‘[s]ubject to a prior review by the Council, on the basis of a proposal from the Commission’, in accordance with the procedure laid down in Article 8(5) of Directive 92/81. It is not disputed, however, that the Commission never submitted to the Council, pursuant to that provision, an appropriate proposal based on the view that the exemptions at issue could no longer be maintained, particularily on the grounds of unfair competition or distortion of the operation of the internal market.

102    Furthermore, the Commission did not use the powers conferred on it by Article 230 EC to seek annulment of one or other of the Council’s decisions of authorisation on the ground that one or other of the decisions was flawed by an error of assessment as to whether, from an objective point of view, there was no distortion of competition, unfair competition or distortion of the operation of the internal market as a result of the exemptions at issue. Moreover, it did not raise any argument, on the basis of Article 241 EC (now Article 277 TFEU), to the effect that Directive 92/81 is unlawful, either in its entirety or in respect only of Article 8(4) of the directive. Indeed, neither the Council’s decisions of authorisation nor Directive 92/81 were, either totally or partially, annulled or declared invalid by the European Union courts.

103    Lastly, the Commission has never claimed, even in its written submissions in the present cases, that the Council’s decisions of authorisation, most recently Decision 2001/224, or Directive 92/81, considered in its entirety or solely in respect of Article 8(4) thereof, were to be regarded as non-existent measures or even simply that such measures were tainted by illegality.

104    It follows that, as the Council correctly submitted in its reply to the questions put by the Court (see paragraph 36 above), when the Commission adopted the contested decision, Decision 2001/224 was in existence and remained valid. Decision 2001/224, the Council’s decisions of authorisation which preceded it and Directive 92/81, in particular Article 8(4) thereof, benefited from the presumption of legality attaching to any act of the European Union. They produced all their legal effects. Consequently, the Italian Republic, Ireland and the French Republic were entitled to rely on the Council’s decisions of authorisation, most recently Decision 2001/224, in order to continue to apply the exemptions at issue in Sardinia, the Shannon region and the Garonne region respectively until 31 December 2003. Those decisions precluded the Commission, in principle, from being able, in the contested decision, to attribute the exemptions at issue referred to above to the Member States concerned and, therefore, from being able to classify them as State aid within the meaning of Article 87(1) EC and ordering the partial recovery of the exemptions to the extent that it regarded them as incompatible with the internal market for the purpose of Article 87(3) EC.

105    In the particular circumstances of the present case, the Court finds that, in so far as it calls directly into question the validity of the exemptions at issue granted by the Italian Republic, Ireland and the French Republic until 31 December 2003, the contested decision also calls into question, indirectly but necessarily, the validity of the Council’s decisions of authorisation, most recently Decision 2001/224, and the effects arising from those decisions. The contested decision thereby infringes the principle of legal certainty and also the principle of the presumption of legality attaching to European Union measures.

106    Consequently, the pleas and grounds of complaint alleging breach of the principle of legal certainty and/or the principle of the presumption of legality attaching to European Union measures in Joined Cases T‑50/06 RENV, T‑56/06 RENV, T‑60/06 RENV, T‑62/06 RENV and T‑69/06 RENV must be upheld.

107    With regard, secondly, to the complaint alleging breach of the principle of sound administration raised by Eurallumina in Case T‑62/06 RENV, it is established case‑law that that principle does not, in itself, confer rights upon individuals (Case T‑196/99 Area Cova and Others v Council and Commission [2001] ECR II‑3597, paragraph 43), except where it constitutes the expression of specific rights (Case T‑193/04 Tillack v Commission [2006] ECR II‑3995, paragraph 127, and the judgment of 13 November 2008 in Case T‑128/05 SPM v Council and Commission, not published in the ECR, paragraph 127.

108    It is apparent from the considerations set out above that, by adopting the contested decision, the Commission attacked, in particular, exemptions from excise duty which, as is clear from recitals 18, 20 and 63 of the contested decision, had been granted by the Italian Republic to Eurallumina for its factory in Sardinia in accordance with the authorisation granted by the Council in Decision 2001/224. However, so long as the Council’s decisions of authorisation, most recently Decision 2001/224, were in force and had been neither amended by the Council nor annulled by the European Union courts, the principle of legal certainty and the principle of the presumption of legality attaching to European Union measures precluded the Commission from adopting, in the exercise of its virtually exclusive powers in matters of State aid, a decision which conflicted with the effects produced by Decision 2001/224 by calling into question, inter alia, specific rights which the Italian Republic had conferred on Eurallumina in accordance with that decision.

109    It follows that, by adopting the contested decision without taking account of the specific rights which the Italian Republic had conferred on Eurallumina, in accordance with Decision 2001/224, and which, as a consequence of that decision, were legally protected by the principle of legal certainty and the principle of the presumption of legality attaching to European Union measures, the Commission also infringed the principle of sound administration.

110    Without there being any need to examine the other pleas and grounds of complaint raised by Ireland in Case T‑50/06 RENV, by AAL in Case T‑69/06 RENV, by the Italian Republic in Case T‑60/06 RENV, by Eurallumina in Case T‑62/06 RENV and by the French Republic in Case T‑56/06 RENV, the contested decision must therefore be annulled, in so far as it finds, or is based on the finding, that the exemptions from excise duty on mineral oils used as fuel for alumina production granted by the French Republic, Ireland and the Italian Republic until 31 December 2003 constituted State aid within the meaning of Article 87(1) EC and in so far as it ordered the French Republic, Ireland and the Italian Republic to take all necessary measures to recover the exemptions from the beneficiaries to the extent that they did not pay excise duty at the rate of at least EUR 13.01 per 1 000kg of heavy fuel oils.

 Costs

111    Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.

112    Since the Commission has been unsuccessful, it must be ordered to pay the costs, including those of the application for interim measures in Case T‑69/06 R, in accordance with the forms of order sought by the applicants.

On those grounds,

THE GENERAL COURT (Fourth Chamber, Extended Composition)

hereby:

1.      Annuls Commission Decision 2006/323/EC of 7 December 2005 concerning the exemption from excise duty on mineral oils used as fuel for alumina production in Gardanne, in the Shannon region and in Sardinia respectively implemented by France, Ireland and Italy, in so far as it finds, or is based on the finding, that the exemptions from excise duty on mineral oils used as fuel for alumina production granted by the French Republic, Ireland and the Italian Republic until 31 December 2003 constitute State aid within the meaning of Article 87(1) EC and in so far as it orders the French Republic, Ireland and the Italian Republic to take all measures necessary to recover those exemptions from the beneficiaries to the aextent that the latter did not pay excise duty at the rate of at least EUR 13.01 per 1 000kg of heavy fuel oils;

2.      Orders the European Commission to bear its own costs and to pay the costs incurred by Ireland in Case T‑50/06 RENV, by the French Republic in Case T‑56/06 RENV, by the Italian Republic in Case T‑60/06 RENV, by Eurallumina Spa in Case T‑62/06 RENV and by Aughinish Alumina Ltd in Case T‑69/06 RENV, including the costs of the application for interim measures in Case T‑69/06 R.

Pelikánová Vadapalas Jürimäe

O’Higgins       Van der Woude

Delivered in open court in Luxembourg on 21 March 2012.

[Signatures]

Table of contents

Background to the dispute

Alumina

Directives on excise duties on mineral oils

Council decisions adopted on the basis of Article 8(4) of Directive 92/81

Administrative procedure

The contested decision

Proceedings before the General Court and the Court of Justice

Forms of order sought by the parties in the proceedings after referral back to the General Court

Law

Eurallumina’s heads of claim seeking certain declaratory relief from the Court

Summary of the pleas and grounds of complaint raised by the applicants

The pleas and grounds of complaint alleging unlawful application of the rules on State aid to the exemptions granted on the basis of the Council’s decisions of authorisation and in conformity with those decisions

Costs

* Languages of the case: English, French and Italian.