Repubblica d'Austria contro Commissione europea.

• Jurisdiction: European Union
• ECLI: ECLI:EU:C:2020:742
• Docket Number: C-594/18
• Date: 22 September 2020
• Celex Number: 62018CJ0594
• Court: Court of Justice (European Union)

Provisional text

JUDGMENT OF THE COURT (Grand Chamber)

22 September 2020 (*)

(Appeal – State aid – Article 107(3)(c) TFEU – Articles 11 and 194 TFEU – Article 1, Article 2(c) and Article 106a(3) of the Euratom Treaty – Planned aid for Hinkley Point C nuclear power station (United Kingdom) – Decision declaring the aid compatible with the internal market – Objective of common interest – Environmental objectives of the European Union – Principle of protection of the environment, ‘polluter pays’ principle, precautionary principle and principle of sustainability – Determination of the economic activity concerned – Market failure – Proportionality of the aid – Operating or investment aid – Determination of the aid elements – Guarantee Notice)

In Case C‑594/18 P,

APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 21 September 2018,

Republic of Austria, represented initially by G. Hesse, and subsequently by F. Koppensteiner and M. Klamert, acting as Agents, and by H. Kristoferitsch, Rechtsanwalt,

appellant,

the other parties to the proceedings being:

European Commission, represented by É. Gippini Fournier, T. Maxian Rusche, P. Němečková and K. Herrmann, acting as Agents,

defendant at first instance,

Czech Republic, represented by M. Smolek, J. Vláčil, T. Müller and I. Gavrilová, acting as Agents,

French Republic, represented initially by D. Colas and P. Dodeller, and subsequently by P. Dodeller and T. Stehelin, acting as Agents,

Grand Duchy of Luxembourg, represented initially by D. Holderer, and subsequently by T. Uri, acting as Agents, and by P. Kinsch, avocat,

Hungary, represented by M.Z. Fehér, acting as Agent, and P. Nagy, ügyvéd,

Republic of Poland, represented by B. Majczyna, acting as Agent,

Slovak Republic, represented by B. Ricziová, acting as Agent,

United Kingdom of Great Britain and Northern Ireland, represented by Z. Lavery and S. Brandon, acting as Agents, A. Robertson QC and T. Johnston, Barrister,

interveners at first instance,

THE COURT (Grand Chamber),

composed of K. Lenaerts, President, R. Silva de Lapuerta, Vice-President, A. Arabadjiev, A. Prechal, M. Vilaras, M. Safjan, S. Rodin, L.S. Rossi and I. Jarukaitis (Rapporteur), Presidents of Chambers, T. von Danwitz, C. Toader, D. Šváby, K. Jürimäe, C. Lycourgos and N. Piçarra, Judges,

Advocate General: G. Hogan,

Registrar: M. Krausenböck, Administrator,

having regard to the written procedure and further to the hearing on 28 January 2020,

after hearing the Opinion of the Advocate General at the sitting on 7 May 2020,

gives the following

Judgment

1 By its appeal, the Republic of Austria asks the Court to set aside the judgment of the General Court of the European Union of 12 July 2018, Austria v Commission (T‑356/15, ‘the judgment under appeal’, EU:T:2018:439), by which the General Court dismissed its action for annulment of Commission Decision (EU) 2015/658 of 8 October 2014 on the aid measure SA.34947 (2013/C) (ex 2013/N) which the United Kingdom is planning to implement for support to the Hinkley Point C nuclear power station (OJ 2015 L 109, p. 44; ‘the decision at issue’), in which the European Commission found that that aid measure was compatible with the internal market within the meaning of Article 107(3)(c) TFEU and authorised its implementation.

Background to the dispute

2 On 22 October 2013, the United Kingdom of Great Britain and Northern Ireland notified three aid measures (‘the measures at issue’), for Hinkley Point C nuclear power station (‘Hinkley Point C’). The beneficiary of the measures at issue is NNB Generation Company Limited (‘NNBG’), a subsidiary of EDF Energy plc (‘EDF’).

3 The first of the measures at issue is a contract for difference, concluded between NNBG and Low Carbon Contracts Ltd – an entity that is to be funded through a statutory obligation on all licensed electricity suppliers collectively – and intended to ensure price stability for electricity sales by NNBG during the operational phase of Hinkley Point C. The second consists in an agreement between the United Kingdom’s Secretary of State for Energy and Climate Change and NNBG’s investors, which supplements the contract for difference and provides that if, following an early shutdown of Hinkley Point C nuclear power station on political grounds, Low Carbon Contracts defaults on compensatory payments to NNBG’s investors, the Secretary of State in question will pay compensation to the investors. It also provides for gain-share mechanisms. The third is a credit guarantee by the United Kingdom on bonds to be issued by NNBG, guaranteeing the timely payment of principal and interest of qualifying debt.

4 On 18 December 2013, the European Commission decided to initiate a formal investigation procedure in respect of the measures at issue. That decision was published in the Official Journal of the European Union on 7 March 2014 (OJ 2014 C 69, p. 60).

5 On 8 October 2014, the Commission adopted the decision at issue, in which, in Section 7, it stated that the measures at issue constituted State aid within the meaning of Article 107(1) TFEU. In Sections 9 and 10, the Commission examined whether those measures could be declared compatible with the internal market pursuant to Article 107(3)(c) TFEU and concluded that they could. The first paragraph of Article 1 of the decision at issue is worded as follows:

‘Aid to Hinkley Point C in the form of a Contract for Difference, the Secretary of State Agreement and a Credit Guarantee, as well as all related elements, which the UK is planning to implement, is compatible with the internal market within the meaning of Article 107(3)(c) [TFEU].’

The procedure before the General Court and the judgment under appeal

6 By application lodged at the Registry of the General Court on 6 July 2015, the Republic of Austria brought an action for annulment of the decision at issue.

7 The Grand Duchy of Luxembourg was granted leave to intervene in the proceedings in support of the form of order sought by the Republic of Austria, whilst the Czech Republic, the French Republic, Hungary, the Republic of Poland, Romania, the Slovak Republic and the United Kingdom were granted leave to intervene in support of the form of order sought by the Commission.

8 Taking issue with the Commission for having declared that the measures at issue were compatible with the internal market within the meaning of Article 107(3)(c) TFEU, the Republic of Austria put forward 10 pleas in law in support of its action.

9 In the judgment under appeal, the General Court, having rejected those 10 pleas, dismissed the action.

Forms of order sought by the parties before the Court of Justice

10 By its appeal, the Republic of Austria claims that the Court should:

– set aside the judgment under appeal in its entirety,

– uphold the action for annulment of the decision at issue,

– order the Commission to pay the costs, and

– order all the interveners at first instance participating in the proceedings on appeal to bear their own costs.

11 The Grand Duchy of Luxembourg claims that the Court should:

– grant the appeal in full and set aside the judgment under appeal in its entirety,

– uphold in full the action for annulment brought against the decision at issue, and

– order the Commission to pay the costs.

12 The Commission contends that the Court should:

– dismiss the appeal, and

– order the Republic of Austria to pay the costs.

13 The Czech Republic, the French Republic, Hungary, the Republic of Poland, the Slovak Republic and the United Kingdom contend that the Court should dismiss the appeal.

The appeal

First ground of appeal

14 By its first ground of appeal, the Republic of Austria submits that, in the judgment under appeal, the General Court erred in law in that it failed to hold that the construction of a new nuclear power station does not constitute an objective of common interest.

First part of the first ground of appeal

– Arguments of the parties

15 The Republic of Austria, supported by the Grand Duchy of Luxembourg, criticises the General Court for having, in paragraph 79 et seq. of the judgment under appeal, rejected its arguments seeking to call into question the Commission’s determination, in recital 374 of the decision at issue, that the promotion of nuclear energy constitutes an objective of common interest. In so ruling, the General Court wrongly proceeded on the basis that, in order to determine whether the promotion of nuclear energy constitutes an objective that may be pursued by the Member States by means of State aid, the issue is not whether that objective is consonant with the interest of all or a majority of the Member States, but whether a public interest and not just a private interest of the recipient of the aid is involved.

16 The General Court thereby departed from the Commission’s practice and the prevailing case-law that relate to the application of Article 107(3)(c) TFEU, according to which all aid must, in principle, pursue an objective of common interest, or even an objective of common interest of the European Union, that is to say, an interest which corresponds to the common interest of all the Member States.

17 The Commission, the Czech Republic, the French Republic, Hungary, the Republic of Poland, the Slovak Republic and the United Kingdom contend that this part of the first ground of appeal is unfounded.

– Findings of the Court

18 Article 107(3)(c) TFEU states that 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.

19 Thus, in order to be capable of being considered compatible with the internal market under that provision, State aid must meet two conditions, the first being that it must be intended to facilitate the development of certain economic...