Judgments nº T-62/06 of Court of First Instance of the European Communities, December 12, 2007

• Resolution Date: December 12, 2007
• Issuing Organization: Court of First Instance of the European Communities
• Decision Number: T-62/06

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

Ireland, represented by D. O-Hagan, acting as Agent, assisted by P. McGarry, Barrister,

applicant in Case T-50/06,

French Republic, represented by G. de†Bergues and S. Ramet, acting as Agents,

applicant in Case T-56/06,

Italian Republic, represented by G. Aiello, avvocato dello Stato,

applicant in Case T-60/06,

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

applicant in Case T-62/06,

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

applicant in Case T-69/06,

v

Commission of the European Communities, represented by V. Di Bucci, N. Khan, P. Stancanelli and K. Walkerov·, acting as Agents,

defendant,

ACTIONS 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 COURT OF FIRST INSTANCEOF THE EUROPEAN COMMUNITIES (Second Chamber, Extended Composition),

composed of A.W.H. Meij, acting as President, N.J. Forwood and S.†Papasavvas, Judges,

Registrar: J. Palacio Gonz·lez, Principal Administrator,

having regard to the written procedure and further to the hearing on 13 June 2007,

gives the following

Judgment

†Legal and factual background

†Community provisions relating to State aid

1 ††††††††Under Article 87(1) EC, -[s]ave as otherwise provided in this Treaty, 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 shall, in so far as it affects trade between Member States, be incompatible with the common market-.

2 ††††††††The rules of procedure established by the Treaty with regard to State aid vary according to whether the aid is existing or new. Whilst the former is subject to Article 88(1) and (2) EC, the latter is governed, chronologically, by Article 88(3) and (2).

3 ††††††††With regard to existing aid, Article 88(1) EC gives power to the Commission to keep it under constant review with the Member States. In the context of that review, the Commission is to propose to the Member States any appropriate measures required by the progressive development or by the functioning of the common market. Article 88(2) EC then provides that if, after giving notice to the parties concerned to submit their comments, the Commission finds that aid is not compatible with the common market having regard to Article 87 EC, or that such aid is being misused, it is to decide that the State concerned must abolish or alter such aid within a period of time to be determined by the Commission.

4 ††††††††Article 1 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) includes, inter alia, the following definitions:

-(a)††††††-aid- shall mean any measure fulfilling all the criteria laid down in Article [87](1) [EC];

(b)††††††-existing aid- shall mean:

(i) ††††††- all aid which existed prior to the entry into force of the Treaty in the respective Member States -;

(ii)††††††authorised aid, that is to say, aid schemes and individual aid which have been authorised by the Commission or by the Council;

(iii)†aid which is deemed to have been authorised pursuant to Article 4(6) of this Regulation or prior to this Regulation but in accordance with this procedure;

(iv)††††††aid which is deemed to be existing aid pursuant to Article 15;

(v)††††††aid which is deemed to be an existing aid because it can be established that at the time it was put into effect it did not constitute an aid, and subsequently became an aid due to the evolution of the common market and without having been altered by the Member State. Where certain measures become aid following the liberalisation of an activity by Community law, such measures shall not be considered as existing aid after the date fixed for liberalisation;

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† Alumina

5 ††††††††Alumina (or aluminium oxide) is a white powder mainly used in foundries to produce aluminium. It is extracted from bauxite by a refining procedure the final stage of which is calcination. More than 90% of the calcined alumina is used for the fusion of aluminium. The remainder undergoes further transformation and is used in chemical applications. There are two distinct product markets, that is to say metallurgical alumina and chemical alumina. Mineral oils (including heavy fuel oil) may be used as fuel for the production of alumina.

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

†Directives concerning excise duties on mineral oils

7 ††††††††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) lays down the rules relating to excise duties on mineral oils.

8 ††††††††Under Article 1(1) and (2) of Directive 92/81, the Member States are to impose a harmonised excise duty on mineral oils in accordance with that directive and fix their rates in accordance with Council 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).

9 ††††††††Article 8(4) of Directive 92/81 allows the Council to authorise a Member State to introduce exemptions or reductions of the rates of excise duty other than those expressly laid down in that directive. It provides:

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

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

10 ††††††Under Article 8(5) of Directive 92/81, -[i]f 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 area of protection of the environment, it shall submit appropriate proposals to the Council. The Council shall take a unanimous decision on these proposals.-

11 ††††††Article 6 of Directive 92/82 fixed the minimum rate of excise duty on heavy fuel oil which the States were to impose from 1 January 1993 at ECU 13 per tonne.

12 ††††††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.

13 ††††††In accordance with the second indent of Article 2(4)(b) thereof, Directive 2003/96 does not apply to the use of energy products having a dual use. Under the same 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. Therefore, since 1 January 2004, there is no longer any minimum rate of excise duty on heavy fuel oil used for the production of alumina.

14 ††††††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, 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. Points 6, 7 and 8 of Annex II relate, inter alia, to exemption from excise duties for heavy fuel oil used as fuel in the production of alumina in the regions of Gardanne and Shannon and in Sardinia respectively.

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

15 ††††††Since 1983, Ireland has exempted from excise duty mineral oils used for the production of alumina in the Shannon region. That exemption (-the Irish exemption-) was authorised by Council Decision 92/510/EEC of 19 October 1992 authorising Member States to continue to apply to certain mineral oils when used for specific purposes, existing reduced rates of...