Judgments nº T-417/16 of Tribunal General de la Unión Europea, September 12, 2019

• Resolution Date: September 12, 2019
• Issuing Organization: Tribunal General de la Unión Europea
• Decision Number: T-417/16

(State aid - Aid to Klaipėdos Nafta for the construction and management of an LNG terminal at the Klaipėda Seaport - Decision declaring the aid compatible with the internal market - Article 106(2) TFEU - Article 107(3)(c) TFEU - Decision not to raise any objections - Security of supply - Service of general economic interest)

In Case T-417/16

Achemos Grupė UAB, established in Vilnius (Lithuania),

Achema AB, established in Jonava (Lithuania),

represented initially by R. Martens and C. Maczkovics, and subsequently by R. Martens and V. Ostrovskis, lawyers,

applicants,

v

European Commission, represented by É. Gippini Fournier, N. Kuplewatzky and L. Armati, acting as Agents,

defendant,

supported by

Republic of Lithuania, represented initially by D. Kriaučiūnas and R. Dzikovič, and subsequently by R. Dzikovič, acting as Agents,

and by

Klaipėdos Nafta AB, established in Klaipėda (Lithuania), represented by K. Kačerauskas and V. Vaitkutė Pavan, lawyers,

interveners,

APPLICATION pursuant to Article 263 TFEU for annulment of Commission Decision C(2013) 7884 final of 20 November 2013, whereby State aid SA.36740 (2013/NN) granted by Lithuania to Klaipėdos Nafta was declared compatible with the internal market (OJ 2016, C 161, p. 1),

THE GENERAL COURT (Seventh Chamber),

composed of V. Tomljenović, President, A. Marcoulli and A. Kornezov (Rapporteur), Judges,

Registrar: E. Artemiou,

having regard to the written part of the procedure and further to the hearing on 20 March 2019,

gives the following

Judgment

Background to the dispute

1 The Parliament of the Republic of Lithuania, by Resolution X-1046 of 18 January 2007, approved the national energy strategy for 2008-2012 which highlighted the need to look into the possibility of building a liquefied natural gas terminal (‘the LNG terminal’) in order to ensure an alternative supply of natural gas in that Member State and thereby ensure the security of energy supply at national level.

2 On 21 July 2010, the Lithuanian Government, by decree, appointed Klaipėdos Nafta AB to develop a plan for constructing an LNG terminal and to carry out that construction (‘the Decree of 21 July 2010’). The Lithuanian State has a 72.3% shareholding in Klaipėdos Nafta.

3 On 30 September 2010, the Parliament of the Republic of Lithuania adopted a resolution in which it asked the Government to draw up a detailed development project for the LNG terminal in Lithuania and to provide for project finance from EU funds and private funds in addition to funds from the national budget.

4 In compliance with the resolution of the Lithuanian Parliament referred to in paragraph 3 above, the Lithuanian Government adopted two resolutions on 7 and 15 February 2012 by which it approved amendments to the national energy strategy of the Republic of Lithuania for 2008-2012, decided to develop the LNG terminal, appointed Klaipėdos Nafta as the undertaking responsible for developing the project and requested the Ministry for Energy to adopt all decisions required to ensure that Klaipėdos Nafta is provided with all necessary guarantees to finance the project, including a State guarantee.

5 On 22 June 2012, the LNG Terminal Law was passed, according to which the LNG terminal and its connection to the gas transmission system are to be recognised as facilities of strategic importance to national security, while the LNG terminal operator is to be recognised as a company of strategic importance to national security (‘the Law of 22 June 2012’). According to Article 4(1) of that law, the LNG terminal project must be implemented by a company in which the State holds shares conferring at least 2/3 of the voting rights.

6 The regulatory framework established by the Republic of Lithuania made provision for three main components for financing the LNG terminal:

- First, Article 5(2) of the Law of 22 June 2012 creates a special levy for all users of the natural gas transmission system (‘the LNG supplement’). That supplement is collected by the transmission system operator and transferred to Klaipėdos Nafta once approved by the national regulatory authority (‘NRA’) in order to finance part of the costs of building the LNG terminal and the related infrastructure which could not be financed by other sources as well as the fixed costs of operating the terminal. Provision is made to collect the LNG supplement for a period of 55 years from the launch of the LNG terminal.

- Secondly, Article 11 of the Law of 22 June 2012 imposes a requirement for certain companies supplying heat and electricity to purchase a minimal mandatory quota of gas imported through the LNG terminal (‘the purchase obligation’). All other consumers in Lithuania are free to choose or purchase natural gas (from the designated supplier, from other suppliers, at the natural gas exchange or imported directly through the LNG terminal). The purchase obligation will continue for 10 years and that period may be shortened if the development and integration of the Lithuanian natural gas market are sufficient to ensure a minimal level of purchases making it possible for the LNG terminal to work on a steady mode.

- Thirdly, the financing of the construction of the LNG terminal infrastructure is covered by a State guarantee of 100% of the amount of loans granted by the European Investment Bank (EIB) and other loan providers for a total amount of approximately EUR 116 million against payment of a one-off fee of 0.1% on the amount of the loan concerned (‘the State guarantee’).

7 On 28 October 2013, the Republic of Lithuania notified the European Commission of the above measures. It submitted additional information to that institution on 29 October 2013.

8 On 20 November 2013, the Commission adopted Decision C(2013) 7884 final in which State Aid SA.36740 (2013/NN), granted by Lithuania to Klaipėdos Nafta, was declared compatible with the internal market (‘the contested decision’). The contested decision was published in the Official Journal of the European Union on 4 May 2016 (OJ 2016 C 161, p. 1).

9 In the contested decision, in the first place, the Commission considered that the three measures described in paragraph 6 above were State aid within the meaning of Article 107(1) TFEU.

10 In the second place, with regard to the legality of the aid measures, the Commission stated that the State guarantee, the purchase obligation and the LNG supplement, in so far as the latter was meant to cover the fixed costs of operating the LNG terminal, had still not created enforceable rights when the contested decision was adopted, so that those measures were lawful. On the other hand, since the LNG supplement had already been in force since 2013, in that it was meant to cover the investment costs which could not be covered by other sources, the Commission decided that that part of the aid measure in question was implemented in breach of Article 108(3) TFEU.

11 In the third place, with regard to the compatibility with the internal market of the three aid measures described in paragraph 6 above, the Commission considered, on the basis of Article 107(3)(c) TFEU, that the investment aid measures, that is to say, the State guarantee and the LNG supplement, in so far as the latter covered investment costs, were compatible with the internal market. As regards the operating aid measures, that is to say, the purchase obligation and the LNG supplement, in so far as the latter covered the fixed costs of operating the LNG terminal, the Commission concluded that they complied with its communication on the European Union framework for State aid in the form of public service compensation (2011) (OJ 2012 C 8, p. 15, ‘the SGEI Framework’) and therefore were compatible with the internal market, in accordance with Article 106(2) TFEU.

Procedure and forms of order sought

12 By application lodged at the Court Registry on 28 July 2016, the applicants, Achemos Grupė UAB and Achema AB, brought the present action.

13 On 28 November 2016, by a separate document, the Commission lodged a plea of inadmissibility under Article 130(1) of the Rules of Procedure of the General Court.

14 On 16 January 2017, the applicants lodged their observations on the plea of inadmissibility at the Court Registry.

15 By order of 6 September 2017, the Court (Seventh Chamber) decided to reserve its decision on the plea of inadmissibility raised by the Commission for the final judgment.

16 On 19 October 2017, the Commission lodged its defence at the Court Registry.

17 By decisions of 30 October and of 8 December 2017, the President of the Seventh Chamber of the Court granted leave to the Republic of Lithuania and to Klaipėdos Nafta to intervene in support of the form of order sought by the Commission.

18 The applicants lodged a reply at the Court Registry on 24 January 2018.

19 On 5 and 7 February 2018, respectively, the Republic of Lithuania and Klaipėdos Nafta lodged statements in intervention.

20 On 12 March 2018, the Commission lodged a rejoinder at the Court Registry.

21 On 9 April 2018, the applicants lodged observations on the statements in intervention at the Court Registry.

22 Pursuant to Article 106(2) of the Rules of Procedure, the applicants submitted a reasoned request for an oral hearing on 17 May 2018.

23 On a proposal from the Judge-Rapporteur, the Court (Seventh Chamber) decided to open the oral part of the procedure and, by way of a measure of organisation of procedure under Article 89 of the Rules of Procedure, put a number of questions to the Commission to be answered in writing. On 18 February 2019, the Commission replied to the questions put to it.

24 At the hearing held on 20 March 2019, the parties presented their oral arguments and answered the oral questions asked by the Court.

25 At the hearing, the Court invited the Commission, the Republic of Lithuania and Klaipėdos Nafta to present, within 2 weeks, written observations on Commission Decision C(2018) 7141 final of 31 October 2018 on State Aid SA...