1 Introduction
While EU law initially and almost exclusively focused on economic integration, it has since evolved into a comprehensive legal order. Even though this focus on economic integration has not shifted, EU law must now also take into account environmental issues. In fact, art 11 Treaty on the functioning of the European Union (TFEU) obliges the EU to “[integrate environmental protection requirements] into the definition and implementation of the Union’s policies and activities, in particular with a view to promoting sustainable development.” Likewise, art 37 Charter of Fundamental Rights of the European Union (CFR) states: “A high level of environmental protection and the improvement of the quality of the environment must be integrated into the policies of the Union and ensured in accordance with the principle of sustainable development.” Whereas the exact meaning and nature of art 37 CFR remains under debate,1 European Court of Justice (ECJ) case law is clear when it comes to the relevance of art 11 TFEU. For example, even where a decision taken by the EU and its bodies is outside the field of environmental protection, the impact of said decision on the environment and/or sustainability have at least to be taken into account.2
Notwithstanding this general obligation to consider the environmental impact of every decision taken by EU authorities, at least at first glance, EU state aid law3 does not seem to be a reference area for sustainability and
Considering its primary focus and the fact that it may appear as a rather technical matter, it might be surprising when one takes a closer look, even EU state aid law relates to both sustainability and participation. In fact, considering that the undistorted functioning of the market usually yields the most efficient and thus durable results,6 even though this would necessitate a departure from art 11 TFEU7 and may seem a rather unusual approach to the concept of sustainability, it might even be said that EU state aid law is in fact closely linked to sustainability. However, even when one focusses on a more common definition of sustainability as spelt out in art 11 TFEU and participation, state aid law touches upon both these concepts, at least in their specific meaning for state aid law. Whereas sustainability is primarily, but not exclusively, touched upon by state aid law as an objective that may justify the granting of state aid (see 2.), participation in state aid law is most prominently concerned when it comes to the procedural rights of third parties in individual state aid procedures (see 3.).
The importance of both concepts and their interplay in EU state aid law, which is of particular relevance for, but not limited to, legal proceedings, has increased in recent times (see 4.), illustrating that both sustainability and participation have made their way into the seemingly rather technical domain of EU state aid law.
2
2.1 Sustainability as Sustainability of the Market?
As pointed out above, state aid law does not primarily, and at least not specifically, address the concept of sustainability as widely understood. The rationale behind the general prohibition of state aid as enshrined in art 107 (1) TFEU is of course that all financial advantages granted by member states, except those falling under the Altmark Trans criteria8 which are rarely fulfilled, are generally subject to the Commission’s (albeit sometimes predetermined, art 107 (2) TFEU) explicit approval.9 The requirement of prior explicit approval by the Commission is thus key in preventing member states from interfering in the internal market by means of subsidies for their companies. At the outset, the primary objective of state aid law is thus the protection of the functioning of the internal market from even the slightest of distortions caused
Considering this and starting from the assumption that the free and unhindered interplay of market forces usually yields the most efficient and accepted and permanent results,12 one might say that sustainability is not only touched upon by state aid law, but that sustainability could even be considered as being at the centre of state aid law. State aid law could thus be seen as being connected with sustainability insofar as it serves to ensure that the internal market continues to function unhindered by financial infractions, permanently, and thus sustainably, ensuring that the most efficient and therefore sustainable solutions are achieved at any given moment for all goods. State aid law is thus a means to secure the functioning of the internal market as a sustainable system for the coordination of supply and demand.
While the internal market and its functioning certainly touches upon aspects of sustainability, it is also obvious that this approach to sustainability and its connection to state aid law would necessitate an understanding of ‘sustainability‘ that would at the very least be rather ‘creative‘. Furthermore, even if understood in the sense pointed out above, sustainability could only be seen as the primary object of state aid law or closely linked to it insofar as the general ban on state aid as spelled out in art 107 (1) TFEU is concerned. However, such an understanding could not explain the exemptions to the prohibition of state aid as set out in EU primary law. Subsidies falling within the scope of art 107 (1) TFEU may be authorised by the Commission. Regardless of whether they must be authorised following art 107 (2) TFEU or if their authorisation is at the discretion of the Commission in the cases covered by art 107 (3) TFEU, the Commission authorises an impairment of the otherwise unhindered
On the contrary, however, the Commission may only approve state aid for the reasons spelled out in art 107 (2) and art 107 (3) TFEU. On one hand, and roughly speaking, article 107 (2) TFEU concerns cases where the granting of subsidies has to be authorised qua legem because these subsidies either profit individuals or because the granting of subsidies is necessary to overcome particular difficulties.14 Art 107 (2) TFEU thus addresses situations in which the treaty makers assumed the (internal) market would not provide the desired results and therefore deemed subsidies to be an appropriate remedy for this anticipated failure of the (internal) market.
On the other hand, 107 (3) TFEU authorises the Commission to approve state aid whenever it considers that the positive effects of state aid outweigh its negative impacts on the (internal) market. Put briefly, the grounds for approval of state aid as spelled out in art 107 (3) TFEU mostly concerns cases in which the market does not by itself provide results that are deemed desirable from political, social, environmental or cultural considerations.15
Accordingly, state aid may be authorised if its aim is to promote objectives whose importance outweighs negative impacts caused by interference to the functionality of the internal market through the granting of state aid.16 This applies, but is not limited to, state aid granted to ensure that otherwise unprofitable ferry routes are served17 or to certain cultural institutions so that they may continue to operate even if they are not profitable.18
Against this background, it may be considered that state aid can contribute to the restoration of the functioning of the market as a ‘sustainable‘ system by granting a currently incompetitive good or company an advantage it would have if the market also took into account externalities and thus functioned properly. It must of course be stressed that there is always a risk that such interferences into the market miss the set goal, making their strict limitation – as is practice of the Commission22 – even more important.23
Beyond that, and on a more general level, state aid may contribute to the achievement of a ‘sustainable’ result insofar as it may help to secure the permanent availability of goods or services which are politically considered desirable or necessary by a member state, but which the market does not provide for. As has been touched upon above, this is for example the case when it comes
2.2 The Classical Notion of Sustainability: Promoting Sustainability as Grounds for Approval of State Aid
The aforementioned examples of state aid are of course not what usually springs to mind when thinking about state aid and its relation to sustainability, with support for ferry routes even being possibly regarded as the exact opposite of sustainability.
Rather, state aid and sustainability are usually associated and, in fact, primarily concerned with those cases already referred to above where state aid is granted for the promotion of technologies or products that are themselves regarded as being sustainable or more sustainable than others. Further, at least at the time the subsidy is granted, such technologies or products cannot compete against conventional (less sustainable) alternatives for reasons mentioned above. From this perspective, while state aid itself does not become sustainable, the relationship between state aid and sustainability as commonly understood becomes clear. As pointed out above, state aid may on the one hand help to overcome a punctual market failure and thus restore the functioning of the internal market, while on the other hand the market often fails where it does not take into account externalities, which is especially true whenever economical decisions have a notable environmental impact.26
In fact, it is exactly in this respect that both conceptions of sustainability are most closely intertwined with state aid, the numerous shades of sustainability being an objective whose pursuit may generally justify the grant of state aid under EU law. While this is not immediately apparent when looking at the relevant specific provisions of primary law,27 it becomes obvious when looking, for example, at the General Block Exemption Regulation (GBER),28 which exempts certain forms of state aid from prior approval by the Commission if they do meet conditions spelled out for different sectors. In fact, the conditions that must be met for an exemption tend to be slightly less restrictive for subsidies granted to projects aimed at bolstering sustainability than for other
With regard to art 11 TFEU, it is obvious that state aid aimed at contributing to environmental protection and therefore sustainability may not only be approved by the Commission and, consequently, granted by members when it fulfils the conditions set out in the GBER. The reason for this is that while the GBER renders the formal state aid authorisation procedure oblivious in cases it covers,30 environmental aid may of course by no means only be authorised in these cases, the GBER only being a means to simplify state aid procedures.31
The same goes for the area of state aid law probably most closely linked to sustainability: state aid granted for the production of notably electricity from renewable energy sources aimed at reducing carbon dioxide emissions. While partly falling under the scope of the GBER, state aid in this area is often authorised on the basis of art 107 (3) (c) TFEU and the Climate, Energy and Environmental Aid Guidelines (CEEAG).32 While art 107 (3) (c) TFEU is the basis for the Commission’s discretionary approval of “aid to facilitate the development of certain economic activities or of certain economic areas” including renewable energy production, the CEEAG outline the conditions for discretionary approval of state aid covered by them in great detail. Even though power generation from renewable energy sources has long been addressed by EU internal market regulations,33 the answer to the question of how to
However, even where the relationship between State aid law and sustainability may seem particularly close as is the Case when it comes to Support for renewable energy, this must be put into perspective: the application of state aid law always necessitates that a member state grants aid which falls under the scope of art 107 (1) TFEU, as only then the Commission’s approval is generally necessary. The controlling or mitigating effect of state aid law is unfolded primarily through the design and interpretation of the exception rules and in particular art 107 (3) TFEU by the Commission,39 which spells out the cases in which the Commission may approve state aid at its discretion. Therefore, EU state aid law is not a means to achieve or promote sustainability by itself, but
Accordingly, it is through its practice of state aid control that the Commission may exercise considerable influence on the policies of the member states including those aimed at improving sustainability. Beyond this, when exercising its powers under art 108 TFEU, which is the main provision for state aid procedures, and even when the aid in question is not specifically targeted at improving sustainability notably by promoting environmental-friendly projects,41 the Commission also has to take into account the compatibility of the subsidy at hand with other relevant provisions of EU law. While the Commission’s powers in state aid procedures are limited by the scope of art 107 ff. TFEU, meaning its decision is only valid insofar as the relevant provisions of state aid law are concerned, it has long been established that the Commission may, on the contrary, not approve state aid that runs counter to other provisions of EU law such as the rules on the free movement of goods.42
More recently, the ECJ has ruled and thereby confirmed43 that in state aid Procedures, the Commission must also pay due regard to environmental
Yet, as the relevant provisions of EU primary law are of a rather vague and general nature, it is doubtful whether this obligation results in any concrete consequences as far as EU primary law is concerned. It may however result in an obligation of the Commission to deny the approval of state aid in cases where either the principles enshrined art 11 TFEU are clearly violated or, more importantly, where the approval of state aid runs contrary to relevant provisions of secondary EU law aimed at protecting the environment or at fostering sustainability.45
At the same time, conversely, the Commission may not approve the grant of state aid by a member state solely because it aims to improve or achieve sustainability. This would run against the essence of EU state aid law, whose aim is to protect free market forces from distortions caused by subsidies granted by the member states. Deviations from this guiding principle may only be accepted if the advantages and importance of the goal pursued by the subsidy outweighs the negative impact on the market.46 There is no exception to this when it comes to state aid granted for environmental protection or the promotion of renewables. The GBER as well as CEEAG do in fact spell out the specific conditions for granting state aid out and thereby try to strike a predetermined balance between environmental protection/sustainability as legitimate object of state aid and the negative impacts this aid has on the internal market.47 Of course, the Commission may also approve aid solely on grounds of art 107 para 3 (c) TFEU,48 which gives the Commission discretionary powers to approve aid for certain economic activities including the promotion of renewables. It gives the Commission substantial discretion and thereby also the possibility to deviate from its guidelines, but it may only do so when this is justified by the
Summing up, just as sustainability as commonly understood touches upon almost every aspect of daily life, it is needless to say that EU state aid law, which in turn covers almost every aspect of the EU internal economy, is also connected with sustainability. Accordingly, and in line with the overarching provisions of EU primary law concerning environmental protection and sustainability, the Commission has to take into consideration the effects of state aid granted by the member states on these aspects even when the aid in question is unrelated to sustainability. As the primary aim of EU state aid law is the protection of the internal market from distortions caused by subsidies and the like, it is by itself not a means to foster sustainability. Yet, sustainability, being closely linked with environmental considerations, is an objective that may justify the approval of otherwise prohibited state aid, and it is exactly in this regard that sustainability and state aid law are most closely connected. However, and this is of particular importance, sustainability alone and by itself may not justify the granting of state aid.49
3 Participation
While the connection between EU state aid law and sustainability might seem hard to identify initially, the opposite is true when it comes to the relationship between EU state aid law and participation. Participation in this context may briefly, and on a very general level be defined as the democratic process of involving stakeholders concerned by a legislative or administrative procedure into the decision-making process by, for example, giving them the opportunity to voice concerns or lay out their position. Depending on the procedure at hand and the stakeholder, participation may also present an opportunity to point to issues of environmental protection and sustainability, notably in the framework of the Aarhus Convention.50
Given this, the first and most natural approach to the relationship of participation and state aid law would be to look at the mechanisms of participation intended for provisions of EU derived law relevant for state aid practice. From
State aid regulations such as the GBER are quite naturally of major importance not only to member states but also to individual companies. Therefore, the right to be heard for entities concerned by the corresponding regulations would therefore seem close at hand. However, EU law chooses a very different path for state aid regulations: unlike the majority of EU secondary law, state aid regulations are passed in special procedures either by the Council or by the Commission. The Council legislates state aid regulations based on art 109 TFEU and thus in a procedure where even the EP only has a right to be heard. On the other hand, the Commission is conferred legislative powers for state aid in art 108 para 4 TFEU insofar as it has been authorised to do so by Council regulations. These regulations establish an Advisory Committee for state aid that must be heard by the Commission whenever implementing decisions.51 The Advisory Committee itself does not appear to be a body that could compensate for the lack of a broader participation in the drafting of state aid regulations as it is composed of representatives of the member states and not of members of the general public.52 Its purpose thus primarily appears to be the facilitation of state aid procedures and their coordination with member states and not so much the establishment of broad participation. At least, “interested parties” are also given the chance to be heard in the drafting of tertiary state aid regulations by the Commission, but they are not accorded any specific rights beyond that which could make up for the generally limited participation of the public insofar as sustainability is concerned.53
This limitation of participatory rights also applies when it comes to the Commission’s state aid guidelines, which, as set out above, play a very important role in guiding the Commission’s state aid practice even though they are not formally binding:54 it is true that when these guidelines are drafted or revised, the respective stakeholders are regularly consulted. Accordingly, during the
The situation is, however, different when one turns to individual state aid procedures. This difference results from the fact that regardless of the object of a subsidy, whenever the Commission investigates the compatibility of state aid, the investigation may amount to a formal administrative procedure.56 This aspect is of crucial importance for the existence and extent of participatory rights granted in state aid procedures: just as in every other branch of EU law, this entails the applicability of EU law’s provisions on administrative procedures, whose core is now enshrined in 41 CFR.57 The procedural rights set out in art 41 CFR include, inter alia, the right to be heard when one’s rights are impeded by the procedure at hand; being rooted in art 41 CFR or general principles, the right to be heard in formal administrative procedures is not particular to state aid law.
What is particular to EU state aid law, however, is that while state aid procedures formally only concern the Commission and the member state granting the aid, there is in fact usually at least a triangular relationship between the member state granting the aid, the company/entity receiving the aid and the competitors of the latter. As selectivity is inherent to the notion of state aid, this implies that there are individuals or companies who are not recipients of state aid and accordingly may be disadvantaged by the granting of aid to its recipient. Because of this, the participatory rights mentioned above – especially the right to be heard – not only regularly concern the
However, although the aforementioned right to be heard is limited to the formal investigation procedure,61 during the preliminary and informal examination procedure, the granting of these participatory rights is not mandatory.62 To compensate for this lack of participation in the preliminary procedure, third parties may initiate proceedings against the Commission’s decision not to initiate a formal procedure before the EU courts claiming a violation of their right to be heard: otherwise, they would not be able to enforce their right to be heard. This point cannot be stressed enough, as it illustrates that actual participation, or the right hereto are closely linked with the possibility of initiating legal proceedings.63
To conclude, it seems fair to say that while the possibilities for formal participation at the level of rule-making in EU state aid law seem quite limited, they are somewhat broader at the level of individual state aid procedures. This is, however, not due to the fact that EU state aid law would be particular generous when it comes to participatory rights, but rather a result of the multitude of actors usually concerned by state aid procedures. Even where third parties are accorded participatory rights in state aid law, these are usually limited to the right to be heard.
4 Sustainability, Participation and EU State Aid Law: Triangulation (Im)possible?
As set out above, state aid law does not contain specific participatory rights for stakeholders or what one may also call ‘advocates of sustainability‘: just as with
Based on general EU law and notwithstanding the provisions of the Aarhus Convention, the link between sustainability and participation seems to be slightly stronger where EU Law grants third parties specific participatory rights in EU state aid law procedures. As the Commission has to pay due regard to art 11 TFEU regardless of whether the aid at hand is targeted at bolstering environmental protection, one might assume that third parties may generally challenge Commission decisions authorising state aid on grounds of incompatibility with art 11 TFEU. However, regardless of whether the Commission decides to initiate a formal investigation procedure or not, because of the rationale of state aid law, the status of interested party presupposes that the economic interests of the party in question are affected.65
Therefore, a third party only has to be consulted and therefore only is an interested party in state aid procedures when its economic interests are affected by the Commission’s decision. Conversely, this implies that by itself, the fact that a third party’s non-economic interests are adversely affected by a decision authorising state aid, is not sufficient to establish its role as participant in state aid procedures.66 Accordingly, mere advocates of sustainability such as NGO s are not considered third parties in state aid procedures and are, therefore, currently in all likelihood barred from challenging state aid authorisations based
However, and this is important to stress, even when an entity and more precisely a third party is considered an interested party and is thus accorded procedural rights, this does not necessarily imply that it might challenge state aid authorisations on grounds of substantive law and thus art 11 TFEU. While every interested party may challenge Commission decisions on grounds of violation of their procedural rights as set out before, challenging the state aid decisions on substantial grounds and, therefore, violation of EU environmental law requires the interested party to be “individually concerned” in the sense of art 263 (4) TFEU as well, and the CJEU s definition of individual concern traditionally is rather narrow.68 While it may be safe to say that everyone who is individually concerned by a state aid decision is at the same time an interested party, the opposite is not true.69 Therefore, even when the Commission would authorize state aid in flagrant contempt of art 11 TFEU and even pertinent secondary law, an interested party other than a member state, who may challenge the Commission decision without having to meet special procedural requirements, would not be able to successfully challenge this decision solely based on an alleged violation of environmental protection regulations unless it could somehow establish that it is individually concerned. This seems hard to imagine unless its procedural rights in the specific state aid procedure have been violated.70 Accordingly, general procedural law further narrows the group of possible applicants who might substantially challenge state aid decisions.
On the one hand, it has to be noted that firstly, the Aarhus Convention does not apply to legislative and judicial procedures even where they are explicitly relating to environmental law,74 meaning that, inter alia state aid regulations, as opposed to individual state aid procedures and so on, may not be challenged on grounds of the Aarhus Convention.75
On the other hand, however, one could assume that third parties and especially NGO s might be able to challenge state aid decisions concerned with environmental aspects based on art 9 (3) of the Aarhus Convention, which stipulates that “members of the public have access to administrative or judicial procedures to challenge [by] public authorities which contravene provisions of its national law relating to the environment.”. Even though this provision may appear to override the restrictions imposed by art 263 (4) TFEU,76 EU
Regardless of whether the exception of state aid procedures from the Aarhus regulation is in line with the commitments undertaken within the framework of the Aarhus Convention and if its specific provisions on judicial review (i.e. art 9 (3) of the Aarhus Convention) produce direct effect, even the inclusion of state aid procedures into the Aarhus-based procedures would most likely not be a game changer. While this would also enable third parties to challenge state aid even when they are not economically affected by the decision at hand, they could only do so successfully if they meet the criteria set out in EU legislation and especially when the Commission’s decision is actually in breach of pertinent provisions, and not only the spirit of EU environmental rules, which should rarely be the case.83
5
While it is hard to perceive sustainability as the primary object of state aid law, it certainly is an important objective that may justify the granting of state aid. Accordingly, state aid aimed at promoting sustainability such as state aid granted for renewable energy production, may be authorised by the Commission. While this possibility is not limited to state aid granted for projects aimed at promoting sustainability, given the importance of sustainability in the EU s general policy, such aid tends to be authorised easier.
However, there currently are no specific mechanisms in EU state aid law allowing for participation in state aid procedures in ways that promote sustainability by, for example, giving NGO s a specific right to be heard. Even though, while in state aid procedures, third parties will probably be affected more often than in other branches of EU Law, and thus will have to be accorded participatory rights. The status of interested third party is dependent on the third party being affected economically by the state aid procedure at hand, usually meaning that the third party has to be a competitor of the company receiving the aid. And even where this is the case, given the state of EU law and ECJ jurisdiction, and notwithstanding the fact that this might be in contravention of the Aarhus Convention, it seems hard to imagine that a third party may challenge a Commission decision authorising state aid solely based on the fact that the decision in question is in disregard of EU environmental law, as there would have to be a clear breach of the corresponding rules.
While the link between sustainability and participation therefore currently seems to be rather weak in the context of EU state aid procedures, the increasing focus on sustainability in EU politics84 may also lead to an extension of corresponding participatory rights for the general public. This may in turn also lead to an extension of the possibilities of challenging state aid decisions before EU courts. On the one hand, this appears to be the most promising avenue for the enforcement of sustainability rules, but on the other hand, risks placing a, maybe unduly, heavy burden on state aid procedures since both worlds have long been separated.85 Thus, given the current state of the relevant provisions, they might in the end collide in a way that neither would profit from. Therefore, notwithstanding the question whether such an extension seems
Whereas the EU General Court, Case T-600/15 PAN Europe and others [2016], para 48 characterised art 37 CFR as a mere “principle”, the ECJ may appear to lean into a different direction, see ECJ, Case C-444/15 Associazione Italia Nostra Onlus [2016], para 62; ECJ, Case C-594/18 P Austria/Commission [2020], para 42.
See ECJ, Case C-594/18 P Austria/Commission [2020]; further on this below at 2.2 and 4.
When referring to state aid law, this chapter primarily refers to primary state aid law and state aid procedures conducted by the Commission, thereby mostly setting aside legislative procedures concerning state aid regulations and state aid procedures conducted by member states. This focus is not only dictated by considerations of space, but mostly by the fact that – as will be shown below – sustainability and participation and their interplay are of particular importance when it comes to individual state aid procedures.
For an extensive study of the relationship between State aid law and environmmental protection see Olivier Peiffert, L’application du droit des aides d’État aux mesures de protection de l’environnement (Bruylant 2015).
Vincent Verouden and Philipp Werner, ‘Introduction – The Law and Economics of EU State aid Control’ in Philipp Werner and Vincent Verouden (eds), EU State aid Control (Kluwer 2017), 9, 11 ff.
Cf, however, art 3 (1) Treaty on European Union (TEU) whereby “[the internal market] shall work for the sustainable development of Europe based on […] a high level of protection and improvement of the quality of the environment.“
ECJ, Case C-280/00 Altmark Trans [2003], ECR I-7747. According to this judgment, subsidies are not caught by art 107 (1) TFEU if they are to be regarded as compensation for the services provided by the recipient undertakings in order to discharge public service obligations. This requires four conditions to be fulfilled simultaneously:
the recipient undertaking is actually required to discharge public service obligations and those obligations have been clearly defined.
the parameters on the basis of which the compensation is calculated have been established beforehand in an objective and transparent manner.
the compensation does not exceed what is necessary to cover all or part of the costs incurred in discharging the public service obligations, taking into account the relevant receipts and a reasonable profit for discharging those obligations.
fourth, where the undertaking which is to discharge public service obligations is not chosen in a public procurement procedure, the level of compensation needed has been determined on the basis of an analysis of the costs which a typical undertaking, well run and adequately provided with means of transport so as to be able to meet the necessary public service requirements, would have incurred in discharging those obligations, taking into account the relevant receipts and a reasonable profit for discharging the obligations.
However, measures falling within the scope of state aid regulations based on art 108 (4) TFEU are exempt from prior approval if they meet the exact criteria set out in the respective regulation, see art 3 ff. of the General Block Exemption Regulation (GBER), Commission Regulation (EU) 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty [2014], OJ L 187/1, art 3 Commission Regulation (EU) 1407/2013 of 18 December 2013 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid [2013], OJ L 352/1. The GBER has been modified several times (last amendment by Commission Regulation (EU) 2021/1237 of 23 July 2021 amending Regulation (EU) No 651/2014 [2021], OJ L 270/39), however the provisions cited in this chapter have remained (largely) unchanged.
Vincent Verouden and Philipp Werner, ‘Introduction – The Law and Economics of EU state aid Control’ in Philipp Werner and Vincent Verouden (eds), EU state aid Control (Kluwer 2017) 7, 9 ff.
Therefore, subsidies granted by a member state to companies regardless of their company seat, but limited to EU companies, generally do not pose problems from a state aid point of view. Subsidies granted exclusively to EU companies may however raise questions regarding WTO law.
Cf Vincent Verouden and Philipp Werner, ‘Introduction – The Law and Economics of EU State aid Control’ in Philipp Werner and Vincent Verouden (eds), EU State aid Control (Kluwer 2017) 7, 41 ff.
Cf Vincent Verouden and Philipp Werner, ‘Introduction – The Law and Economics of EU State aid Control’ in Philipp Werner and Vincent Verouden (eds), EU State aid Control (Kluwer 2017) 7, 29, 51–53.
This assumption is of course not any more correct when it comes to art 107 (2) (c) TFEU, as the economic problems of German reunification can probably be considered as largely solved and at least may not be assimilated to a “special event” anymore.
Cf Vincent Verouden and Philipp Werner, ‘Introduction – The Law and Economics of EU State aid Control’ in Philipp Werner and Vincent Verouden (eds), EU State aid Control (Kluwer 2017) 7, 29–53.
Cf Vincent Verouden and Philipp Werner, ‘Introduction – The Law and Economics of EU State aid Control’ in Philipp Werner and Vincent Verouden (eds), EU State aid Control (Kluwer 2017) 7, 52 ff.
See, e.g, art 51 GBER and for an example of recent Commission practice Commission decision (EU) 2022/756 of 30 September 2021 on the measures SA.32014 […] [2022], OJ L 138/19.
See art 107 (3) (d) TFEU and further art 53 GBER.
Cf Kai Struckmann and Geza Sapi, ‘Energy and Environmental Aid’, in Philipp Werner and Vincent Verouden (eds), EU State aid Control (Kluwer 2017) 663, 666 ff.
On the measures taken by the EU to promote sustainability in the energy sector see eg Farah Jerrari, ‘La durabilité énergétique en droit de l’Union européenne’, [2021] Revue Trimestrielle de Droit Européen 87.
See recitals 55 ff. of the GBER: “The area of environmental protection is confronted with market failures so that, under normal market conditions, undertakings may not necessarily have an incentive to reduce the pollution caused by them since any such reduction may increase their costs without corresponding benefits. When undertakings are not obliged to internalize the costs of pollution, society as a whole bears these costs.”
For a relatively recent overview on Commission practice in the area of state aid for renewables see Julia Schimpfhuber, ‘Beihilfen für Grüne Energie: Neue Fälle’ in Thomas Jaeger and Birgit Haslinger (eds), Beihilferecht Jahrbuch 2019 (NWV 2019), 339. Cf recital 3 and art 3 GBER.
Cf Vincent Verouden and Philipp Werner, ‘Introduction – The Law and Economics of EU State aid Control’ in Philipp Werner and Vincent Verouden (eds), EU State aid Control (Kluwer 2017) 7, 29–53 and see below n 32 for the case of the Environmental and Energy aid Guidelines.
Communication from the Commission on state aid for films and other audiovisual works [2013], OJ C 332/1, para 16.
See n 17.
See n 21.
This goes especially for art 107 (3) (c) TFEU which is usually the basis for these authorisations and which does not contain the slightest reference to environmental aspects.
Art 36 ff. GBER.
For the “generous” treatment of subsidies granted to nature preservatives and national parks see, eg, Thomas Müller and Daniel Wächter, ‘Schwerpunkt Infrastruktur III: Natur- und Nationalparks im Fokus des Beihilferechts’ in Thomas Jaeger and Birgit Haslinger (eds), Beihilferecht Jahrbuch 2019 (NWV 2019), 411.
Cf recital 3 and art 3 GBER.
See for the possibility to approve state aid directly on grounds of art 107 (3) (c) TFEU below n 48.
For the current guidelines, see Communication from the Commission – Guidelines on state aid for climate, environmental protection and energy 2022 [2022] OJ C 80/1. For the previous guidelines of the Commission see Communication from the Commission – Guidelines on state aid for environmental protection and energy 2014–2020 [2014] OJ C 200/1. See in more detail Kai Struckmann and Geza Sapi, ‘Energy and Environmental Aid’, in Philipp Werner and Vincent Verouden (eds), EU State aid Control (Kluwer 2017), 663, 695 ff.; Rike U. Krämer, ‘Die neuen Leitlinien für Umweltbehilfen’, in Thomas Jaeger and Birgit Haslinger (eds), Beihilferecht Jahrbuch 2015 (NWV 2015), 327.
See European Parliament and Council Directive 2001/77/EC of 27 September 2001 on the promotion of electricity produced from renewable energy sources in the internal electricity market [2001] OJ L 283/33; European Parliament and Council Directive 2009/28/EC of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC [2009] OJ L 140/16; European Parliament and Council Directive 2018/2001 of 11 December 2018 on the promotion of the use of energy from renewable sources (recast) [2018] OJ L 328/82.
While electricity generated from nuclear power is carbon-neutral, its sustainability may be questionable considering the impact of nuclear waste.
While internal market legislation has addressed the necessity to promote renewables relatively early on, more precise rules for promotion schemes have only been introduced into the corresponding directives recently, see art 4 ff. Directive 2018/2001 (n 33). The ECJ did not oppose member states limitation of promotion schemes to electricity generated on their territory, see ECJ, Case C-573/12 Ålands Vindkraft AB [2014].
See for the example of the French support system ECJ, Case C-262/12 Vent de Colère [2013].
See, e.g., ECJ, Case C-372/97 Italy v Commission [2004], ECR I-3679, para 83.
See, for example, the Commission’s most recent approval of the German support scheme (EEG), C (2021) 2960 of 29 april 2021 [2021], p. 104: “compatible with the internal market pursuant to Article 107(3) (c) of the (TFEU)”.
Cf CEEAG (n 32), para 22 ff.
See for an example Commission Decision on state aid SA.21918 (C17/07) (ex NN 17/07) implemented by France of 12 June 2021 – Regulated electricity tariffs in France [2012], OJ C 398/10, whereby France conceded to open up access to parts of its nuclear power capacities for new market entrants.
The answer to the question of whether a project is sustainable or not is facilitated by the provisions of EP and Council Regulation (EU) 2020/852 of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 [2020] OJ L198/13.
This has long been established, see ECJ, Case 73/79 Commission/Italy (“sovraprezzo”) [1980] ECR 1534, para 11.
See ECJ, Case C-594/18 P Austria/Commission [2020]. It is however a question of one’s point of view whether the ECJ confirmed or invented this position. Further on this Merit Olthoff and Andreas von Bonin, ‘Das “Hinkley Point”-Urteil des EuGH: Berücksichtigung von Nachhaltigkeitsaspekten in der beihilferechtlichen Prüfung sowie allgemein im EU- Kartell und Fusionskontrollrecht‘[2021] EuZW, 181; Birgit Peters [2021] EuZW 83 (note); Jean-Noël Caubet-Hilloutou, ‘L’affaire de la centrale nucléaire Hinkley Point, un bouquet d’énergie où économie et environnement tenten de fusionner‘ (2020) 12 Energie-Environnement-Infrastructures 30; Julius Ecker, ‘Das Endurteil Hinkley Point C‘ in Thomas Jaeger and Birgit Haslinger (eds), Beihilferecht Jahrbuch 2021 (NWV 2021), 341.
ECJ, Case C-594/18 P Austria/Commission [2020], para 44 ff., 100.
Cf Christian Wagner, ‘Über Århus nach Luxemburg – Neue Rechtsbehelfsmöglichkeiten im Beihilferecht?‘ [2021] EuZW 817, 818.
Cf Vincent Verouden and Philipp Werner, ‘Introduction – The Law and Economics of EU State aid Control’ in Philipp Werner and Vincent Verouden (eds), EU State aid Control (Kluwer 2017), 7, 29, 51–53.
Cf CEEAG (n 32), para 23 ff., 77 ff. and, inter alia, art 4 (1) (s) GBER.
See Kai Struckmann and Geza Sapi, ‘Energy and Environmental Aid’ in Philipp Werner and Vincent Verouden (eds), EU State aid Control (Kluwer 2017), 663, 691 ff., 715, who also correctly note that the Commission may also approve state aid based on art 106 (2) TFEU (693).
This is regardless of the provisions of EP and Council Regulation (EU) 2020/852 of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 [2020] OJ L198/13.
See further that below 4.
Art 7 ff. Council Regulation (EU) 2015/1588 of 13 July 2015 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to certain categories of horizontal State aid (codification) [2015] OJ L248/1.
Art 7 Council Regulation (EU) 2015/1588 (n 52).
Cf art 6 Council Regulation (EU) 2015/1588 (n 52).
ECJ, Case C-288/96 Germany/Commission [2000] ECR I-8237, para 62 and more recently ECJ, Case C-439/11 P Ziegler SA/Commission [2013], para 59. Further on the relevance of Commission guidelines particularly in state aid procedures Jörg Gundel, ‘Der prozessuale Status der Beihilfenleitlinien der EU-Kommission’ [2016] EuZW 606.
Even when a measure duly notified by a member state to the Commission amounts to state aid, this is not necessarily followed by the initiation of formal state aid procedure, cf. art 108 (3) TFEU, art 4 (3) 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 (codification) [2015] OJ L 248/9.
Unlike in most other areas of the CFR, the corresponding preexisting general principles are still of particular importance for the member states and procedures conducted by the member states, cf. ECJ, Case C-419/14 WebMindLicenses [2015], para 83 ff.; ECJ, Case C-521/15 Spain/Council [2017], paras 61, 88 ff.
See n 56.
See for example EU General Court, Case T-168/17 CBA Spielapparate- und Restaurantbetriebs GmbH [2019]; further on the position of recipients of State aid Ludger Giesberts and Michael Gayger, ‘Kein Akteneinsichtsrecht des Beihilfenempfängers?’ [2019] EuZW 669.
See below n 65.
See Art 6 (1) of the regulation on state aid procedures [n 56].
See for example ECJ, Case C-198/91 Cook/Commission [1993] ECR I-2487, para 22 ff.
See for example ECJ, Case C-367/95 P Commission/Sytravel [1998] ECR I-1719, para 40.
See above n 43 ff.
Cf art 1 (h) of the regulation on state aid procedures [n 56], whereby “interested party means (…) in particular the beneficiary of the aid, competing undertakings and trade associations.” (My italics). See also, and with an emphasis on the requirements imposed by art 263 (4) TFEU, ECJ, Case C-640/16 P Greenpeace Energy and others/Commission [2017], para 38. This has recently also been pointed out by the EU General Court, Case T-777/19 CAPA [2021], paras 88 ff.
Cf recital 37 of the regulation on state aid procedures [n 56]: Commission as “defender” of public interest before national courts, whereas there is no mention of public interest in this regulation in other places.
EU General Court, Case T-382/15 Greenpeace Energy and others/Commission [2016], where of course the standing of the applicants was denied by the General court, whose decision was however upheld by the ECJ, see ECJ, Case C-640/16 P (n 65).
See for example in the specific context of state aid and sustainability EU General Court, Case T-382/15 (n 67) and ECJ, Case 640/16 P (n 65). This is also true for the rules Intervention of third parties in pending proceedings, see Juliette Delarue and Sebastian D. Bechtel, “Access to justice in state aid: how recent legal developments are opening ways to challenge Commission state aid decisions that may breach EU environmental law” (2021) 22 ERA Forum, 253, 259 ff.
EU General Court, Case T-382/15 (n 67), para 39.
Cf. EU General Court, Case T-777/19 (n 65), para 96, whereby an association of fishermen is not considered to be immediately affected by a Commission decision authorizing state aid for renewable energy production solely because the establishment of offshore wind power might have an impact on fishing grounds because the impact depends on numerous factors not covered by the Commission’s decision.
Convention on Access to Information, Public participation in Decision-Making and Access to Justice in Environmental Matters, entered into force 30 October 2001, 2161 UNTS 447.
EP and Council Regulation (EC) 1367/2006 of 6 September 2006 on the application of the provisions of the Aarhus Convention on Access to Information, Public participation in Decision-making and Access to Justice in Environmental Matters to Community institutions and bodies [2006] OJ L264/13.
See art 4 of the Aarhus Convention (n 71).
Cf art 2 of the Aarhus Convention (n 71).
However, art 2 (1) c) of the Aarhus regulation (n 72) gives the public a right to access environmental information even where this information is produced in legislative procedures.
See Juliette Delarue and Sebastian D. Bechtel, ‘Access to justice in state aid: how recent legal developments are opening ways to challenge Commission state aid decisions that may breach EU environmental law’ (2021) 22 ERA Forum 253, 262 ff.
For a recent example of the relevance of the Aarhus Convention in proceedings before the EU courts see EU General Court, Case T-9/19 ClientEarth/EIB [2021], para 126.
Cf art 2 (2) EP and Council Regulation (EC) 1367/2006 of 6 September 2006 (n 72).
See the position of the Commission in Aarhus Compliance Committee, Findings and recommendations with regard to communication ACCC/2015/128 concerning compliance by the European Union of 17 march 2021, ECE/MP.PP/C.1/2021/21, <https://unece.org/sites/default/files/2021-10/ECE_MP.PP_C.1_2021_21_E.pdf> last accessed 09 August 2022, para 52.
Cf art 2 of the Aarhus Convention (n 71).
See Aarhus Compliance Committee, Findings and recommendations with regard to communication ACCC/2015/128 (…) of 17 March 2021 (n 79).
See EP and Council Regulation (EU) 2021/1767 of 6 October 2021 amending Regulation (EC) No 1367/2006 on the application of the provisions of the Aarhus Convention on Access to Information, Public participation in Decision-making and Access to Justice in Environmental Matters to Community institutions and bodies [2021] OJ L356/1 and Christian Wagner, ‘Über Århus nach Luxemburg – Neue Rechtsbehelfsmöglichkeiten im Beihilferecht?’ [2021]EuZW 817 ff.
This has already been highlighted by Christian Wagner, ‘Über Århus nach Luxemburg – Neue Rechtsbehelfsmöglichkeiten im Beihilferecht?’ [2021]EuZW 817, 818; Birgit Peters [2021] EuZW 83 (note); see also Julius Ecker, ‘Das Endurteil Hinkley Point C’ in Thomas Jaeger and Birgit Haslinger (eds), Beihilferecht Jahrbuch 2021 (NWV 2021), 341, 359.
See Communication from the Commission “The European Green Deal”, COM(2019) 640 final [2019] of 11 December 2019 and more on that Rainer Luktis, ‘Der europäische Grüne Deal’ in Thomas Jaeger and Birgit Haslinger (eds), Beihilferecht Jahrbuch 2021 (NWV 2021), 317.
Cf Julius Ecker, ‘Das Endurteil Hinkley Point C‘ in Thomas Jaeger and Birgit Haslinger (eds), Beihilferecht Jahrbuch 2021 (NWV 2021), 341, 358 ff.
Bibliography
Delarue J, and Bechtel SD, “Access to justice in State aid: how recent legal developments are opening ways to challenge Commission State aid decisions that may breach EU environmental law” (2021) 22 ERA Forum, 253.
Ecker J, “Das Endurteil Hinkley Point C” in Jaeger T, and Haslinger B, (eds), Beihilferecht Jahrbuch 2021 (NWV 2021), 341.
EU General court, Case T-382/15 Greenpeace Energy and others/Commission [2016].
EU General Court, Case T-777/19 CAPA [2021].
ECJ, Case C-594/18 P Austria/Commission [2020].
Peiffert O, L’application du droit des aides d’État aux mesures de protection de l’environnement (Bruylant 2015).
Struckmann K, and Sapi G, “Energy and Environmental Aid”, in Werner P, and Verouden V, (eds), EU State aid Control (Kluwer 2017), 663.