Language of document : ECLI:EU:T:2022:853

Case T626/20

Landwärme GmbH

v

European Commission

Judgment of the General Court (Seventh Chamber, Extended Composition), 21 December 2022

(State aid – Biogas market – Tax exemptions compensating for additional production costs – Decisions not to raise objections – Action for annulment – Interest in bringing proceedings – Admissibility – Failure to initiate the formal investigation procedure – Serious difficulties – Article 108(2) and (3) TFEU – Article 4(3) and (4) of Regulation (EU) 2015/1589 – Guidelines on State aid for environmental protection and energy 2014-2020 – Cumulation of aid – Aid granted by several Member States – Imported biogas – Principle of non-discrimination – Article 110 TFEU)

1.      Action for annulment – Natural or legal persons – Measures of direct and individual concern to them – Commission decision finding State aid compatible with the internal market without opening the formal investigation procedure – Action by parties concerned within the meaning of Article 108(2) TFEU – Action designed to safeguard the procedural rights of the persons concerned – Admissibility

(Arts 108(2) and (3) and 263, fourth para., TFEU; Council Regulation 2015/1589, Arts 1(h), 4(3), and 6(1))

(see paragraphs 18-32)

2.      Action for annulment – Natural or legal persons – Interest in bringing proceedings – Need for a vested and present interest – Commission decision finding State aid compatible with the internal market without opening the formal investigation procedure – Action by parties concerned within the meaning of Article 108(2) TFEU – Action designed to safeguard the procedural rights of the persons concerned – Action brought by a potential beneficiary of the aid at issue – Admissibility

(Art. 263, fourth para., TFEU)

(see paragraphs 35-48)

3.      State aid – Prohibition – Exceptions – Discretion of the Commission – Adoption by the Commission of guidelines governing the compatibility of aid with the internal market – Consequences – Self-limitation of its discretion

(Art. 107(3)(c) TFEU; Commission Communication 2014/C 200/1)

(see paragraph 51)

4.      State aid – Planned aid – Examination by the Commission – Preliminary review and main review – Compatibility of aid with the internal market – Difficulties of assessment – Commission’s duty to initiate the main review procedure – Serious difficulties – Burden of proof – Available information – Circumstances enabling the existence of such difficulties to be established – Insufficiency or incompleteness of the examination carried out by the Commission during the preliminary investigation procedure

(Art. 108(2) and (3) TFEU; Council Regulation 2015/1589, Art. 4)

(see paragraphs 64-75, 83-100)

5.      State aid – Examination by the Commission – Compatibility of aid with the internal market – Discretion – Compliance with the coherence between the provisions governing State aid and other provisions of the Treaty – Tax exemption granted by a Member State on the purchase of biogas with a view to compensating for additional production costs – Producers of biogas established in other Member States and receiving production aid – Obligation to take into account the aid granted by those other Member States when examining the compatibility of the tax exemption with the internal market – Principle of non-discrimination – Comparability of situations – Article 110 TFEU – Objective criterion – Reverse discrimination

(Arts 107(1) and 108 TFEU)

(see paragraphs 101-128)


Résumé

On 1 April 2020, the Kingdom of Sweden notified the European Commission of its intention to modify and extend until 31 December 2030 two aid schemes that had already been approved by the Commission until 31 December 2020 (‘the schemes at issue’). Under those schemes, the purchase of certain renewable fuel gases (‘biogas’) is exempted from the payment of certain excise duties on fossil gases used for the same purposes.

Without initiating the formal investigation procedure provided for in Article 108(2) TFEU, the Commission considered, by decisions of 29 June 2020 (1) (‘the contested decisions’), that the notified measures concerned State aid compatible with the internal market under Article 107(3)(c) TFEU. According to that provision, aid to facilitate the development of certain economic activities or of certain economic areas may be considered to be compatible with the internal market, where such aid does not adversely affect trading conditions to an extent contrary to the common interest. In particular, the Commission found, first, that the schemes at issue were necessary, on the ground that, without the total tax exemptions provided for by those schemes, biogas would be more expensive than fossil gases and, second, that it could be excluded that the aid granted under those schemes exceeded the amount required to compensate for the higher costs of biogas production compared to fossil gas production and thus gave rise to overcompensation of those higher costs (‘overcompensation’).

The applicant, Landwärme GmbH, a producer of biomethane in Germany, brought an action for annulment of the contested decisions. In upholding that action, the General Court, after finding that the action was admissible, rules that, in the light of the serious difficulties raised by the assessment of the compatibility of the notified measures with the internal market, the Commission should have initiated the formal investigation procedure.

Findings of the Court

As regards the admissibility of the action, first of all, the Court notes that the applicant complains, inter alia, that the Commission did not initiate the formal investigation procedure despite the fact that that institution could not have been unaware of the existence of serious difficulties as to the possible cumulation of the aid granted in Sweden under the schemes at issue with other aid, granted by other Member States to biogas producers (‘the cumulation at issue’), that cumulation being liable to give rise to overcompensation in favour of those producers when they sell biogas in Sweden. Next, the Court notes that the applicant, as a potential indirect beneficiary of the aid provided for by those schemes and as a competitor of the current beneficiaries of that aid, is an interested party within the meaning of Article 108(2) TFEU and Article 1(h) of the regulation laying down detailed rules for the application of Article 108 TFEU. (2) Lastly, the Court considers that the applicant has an interest in bringing proceedings, since, in the event of annulment of the contested decisions, it could exercise the procedural rights guaranteed to interested parties in the context of the formal investigation procedure, by submitting observations to the Commission on the changes to be made to the schemes at issue in order to make them compatible with the internal market. Accordingly, the action is admissible, at least in so far as the applicant thereby raises the complaint relating to the cumulation at issue.

Before examining that complaint, the Court rejects the Commission’s argument that the Guidelines on State aid for environmental protection and energy 2014-2020, (3) the illegality of which had not been relied on by the applicant, do not allow any role to be attributed to the cumulation at issue for the purpose of assessing the compatibility of the schemes at issue with the internal market. Those guidelines do not prevent the Commission from examining the overcompensation which is liable to result from that cumulation.

As regards the merits of that complaint, the Court notes that, in the contested decisions, the Commission examined only the overcompensation which is liable to result from the cumulation of several aid measures granted by the Kingdom of Sweden and that, in so doing, it excluded the possibility that the cumulation at issue might give rise to serious difficulties in determining the compatibility of the schemes at issue with the internal market. The Court further states that, where the Commission adopts a decision based on Article 107(3)(c) TFEU at the end of the preliminary examination procedure, it must be in a position to conclude, without that issue raising serious difficulties, that the relevant aid will not affect trade between Member States.

Having recalled that, according to the case-law, if the examination carried out by the Commission during the preliminary examination procedure is insufficient or incomplete, this constitutes an indication of the existence of serious difficulties in the assessment of the notified aid measure, the Court notes that the question of the absence of overcompensation is closely linked to that of the proportionality of the schemes at issue. Accordingly, the fact that the Commission, despite the information available to it concerning the possible effects of the cumulation at issue, analysed the absence of overcompensation in an insufficient and incomplete manner may suffice, in the present case, to establish the existence of serious difficulties.

Before finding that the compatibility of the schemes at issue with the internal market raised serious difficulties on account of the overcompensation which is liable to result from the cumulation at issue, the Court examines the arguments of the Commission and the Kingdom of Sweden that, in essence, compliance with the principle of non-discrimination or with Article 110 TFEU requires that the tax exemptions provided for by the schemes at issue apply irrespective of the origin of the biogas sold in Sweden, without drawing any distinction according to whether or not the Member State in which the biogas was produced granted aid for the production of energy from biogas.

As regards compliance with the principle of non-discrimination, the Court points out that the objective of the schemes at issue is to make biogas competitive with fossil gases by compensating for the former’s higher production costs. In the light of that objective, the sale of biogas for which the additional production costs have been compensated is not a situation comparable to that of the sale of biogas for which the additional production costs have not yet been compensated. The Court states that the difference between those two situations exists even where the compensation for those additional costs stems from aid granted by Member States other than the Kingdom of Sweden. Consequently, without objective justification, those two types of sales cannot benefit from the same tax exemption, irrespective of whether the biogas sold in Sweden was produced on national territory or was imported.

As regards Article 110 TFEU, which prohibits Member States from imposing on imported products taxation in excess of that imposed on similar domestic products, the Court notes that the existence of overcompensation may be regarded as an objective criterion allowing the tax exemption provided for by the schemes at issue to be applied only to biogas, whether domestic or imported, the additional production costs of which as compared with fossil gases have not already been compensated for by other aid. That differentiation, based on an objective criterion, is such as to avoid the discrimination which would result from compensation already granted to biogas imported from certain Member States. The Court also states that the schemes at issue give rise to reverse discrimination against biogas produced in Sweden in favour of biogas produced in other Member States which grant aid for energy production from biogas. That outcome cannot be regarded as being imposed by the obligation to comply with Article 110 TFEU, the rationale of which is to prevent a Member State from favouring its own production to the detriment of that of other Member States.

In the light of those considerations, the Court concludes that, when examining the compatibility of the schemes at issue with the internal market, the Commission should have experienced serious difficulties, linked to the overcompensation which is liable to result from the cumulation at issue, which necessitate the initiation of the formal investigation procedure. The Court therefore upholds the action and annuls the contested decisions.


1      Commission Decision C(2020) 4489 final of 29 June 2020 on State aid SA.56125 (2020/N) – Sweden – Prolongation and modification of scheme SA.49893 (2018/N) – Tax exemption for non-food based biogas and bio-propane in heat generation, and Commission Decision C(2020) 4487 final of 29 June 2020 on State aid SA.56908 (2020/N) – Sweden – Prolongation and modification of biogas scheme for motor fuel in Sweden, summaries of which have been published in the Official Journal of the European Union (OJ 2020 C 245, p. 2 and OJ 2020 C 260, p. 4, respectively).


2      Council Regulation (EU) 2015/1589 of 13 July 2015 laying down detailed rules for the application of Article 108 of the Treaty on the Functioning of the European Union (OJ 2015 L 248, p. 9).


3      Communication from the Commission – Guidelines on State aid for environmental protection and energy 2014-2020 (OJ 2014 C 200, p. 1).