Aughinish Alumina Ltd v European Commission.

• Jurisdiction: European Union
• Court: Court of Justice (European Union)
• Date: 07 December 2017

ORDER OF THE COURT (Seventh Chamber)

7 December 2017 (*)

(Appeal — State aid — Article 181 of the Rules of Procedure of the Court of Justice — Exemption from excise duty on mineral oils used as fuel for alumina production — Existing or new aid — Regulation (EC) No 659/1999 — Article 1(b)(i) — Principle of the protection of legitimate expectations — Duty to state reasons)

In Case C‑373/16 P,

APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 4 July 2016,

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

applicant,

supported by:

theFrench Republic, represented by R. Coesme and D. Colas, acting as Agents,

intervener in the appeal,

the other parties to the proceedings being:

Ireland,

applicant at first instance,

European Commission, represented by V. Bottka and N. Khan, acting as Agents,

defendant at first instance,

THE COURT (Seventh Chamber),

composed of A. Rosas, President of the Chamber, A. Prechal and E. Jarašiūnas (Rapporteur), Judges,

Advocate General: H. Saugmandsgaard Øe,

Registrar: A. Calot Escobar,

having decided, after hearing the Advocate General, to give a decision by reasoned order, in accordance with Article 181 of the Rules of Procedure of the Court of Justice,

makes the following

Order

1 By its appeal, Aughinish Alumina Ltd (‘AAL’) seeks to have set aside the judgment of the General Court of the European Union of 22 April 2016, Ireland and Aughinish Alumina v Commission, T‑50/06 RENV II and T‑69/06 RENV II, ‘the judgment under appeal’, EU:T:2016:227), in so far as the General Court, by that judgment, dismissed its application 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 decision at issue’).

Legal context

2 Excise duties on mineral oils have been the subject of a number of directives, that is to say, 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), Council Directive 92/82/EEC of 19 October 1992 on the approximation of the rates of excise duties on mineral oils (OJ 1992 L 316, p. 19), and 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), which repealed Directives 92/81 and 92/82 with effect from 31 December 2003.

3Article 8(4) of Directive 92/81 provided:

‘The Council, acting unanimously on a proposal from the Commission, may authorize 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 authorized 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.’

4 Under Article 8(5) of that directive:

‘If 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.’

5Article 6 of Directive 92/82 fixed the minimum rate of excise duty on heavy fuel oil, as from 1 January 1993, at EUR 13 per 1 000 kg.

6 The second indent of Article 2(4)(b) of Directive 2003/96 provided that that directive did not apply to dual use of energy products, that is to say where products are 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. Hence, since 1 January 2004, when that directive became applicable, there has no longer been any minimum excise duty for heavy fuel used in the production of alumina. Moreover, under Article 18(1) of Directive 2003/96, the Member States were authorised to continue to apply, until 31 December 2006, the reduced rates or exemptions set out in Annex II to that directive, which refers to the excise duty exemptions for heavy fuel oil used as fuel for the production of alumina in the region of Gardanne, in the Shannon region and in Sardinia.

Background to the dispute

7 Ireland has exempted from excise duty mineral oils used for the production of alumina since 12 May 1983. That exemption (‘the exemption at issue’) was introduced into Irish law by Statutory Instrument No 126/1983, Imposition of Duties (No 265) (Excise Duty on Hydrocarbon Oils) Order, 1983, of 12 May 1983.

8 The continuation of the application of that exemption to the Shannon region was authorised by Council Decision 92/510/EEC of 19 October 1992 authorising Member States to continue to apply existing reduced rates of excise duty or exemptions from excise duty, in accordance with the procedure provided for in Article 8(4) of Directive 92/81 (OJ 1992 L 316, p. 16) to certain mineral oils, when used for specific purposes. That authorisation was extended several times thereafter by the Council and ultimately, by means of Council Decision 2001/224/EC of 12 March 2001 concerning reduced rates of excise duty and exemptions from such duty on certain mineral oils when used for specific purposes (OJ 2001 L 84, p. 23), extended until 31 December 2006.

9 Recital 5 in the preamble to Decision 2001/224 stated that that decision was without prejudice ‘to the outcome of any procedures relating to distortions of the operation of the single market that may be undertaken, in particular under Articles [87 and 88 EC]’, and that it did not override ‘the requirement for Member States to notify instances of potential State aid to the Commission under Article [88 EC]’.

10 By Decision of 30 October 2001, the Commission initiated the procedure laid down in Article 88(2) EC (‘the formal investigation procedure’) in relation to the exemption at issue. That decision was notified to Ireland by letter of 5 November 2001 and was published on 2 February 2002 in the Official Journal of the European Communities (OJ 2002 C 30, p. 17). By two other decisions delivered on the same day, the Commission opened that procedure with regard to the same exemptions granted by the Italian Republic in Sardinia and by the French Republic in the Gardanne region (together with the exemption at issue, ‘the exemptions at issue’). On completion of that procedure, the Commission adopted the decision at issue, according to which:

– the exemptions at issue granted until 31 December 2003 constitute State aid for the purposes of Article 87(1) EC;

– aid granted between 17 July 1990 and 2 February 2002, to the extent that it is incompatible with the common market, is not to be recovered as this would be contrary to the general principles of Community law;

– the aid granted between 3 February 2002 and 31 December 2003 is incompatible with the common market within the meaning of Article 87(3) EC in so far as the beneficiaries did not pay a rate of EUR 13.01 per 1 000 kg of heavy fuel oils; and

– the latter aid must be recovered.

11 In the decision at issue, the Commission found that the exemptions at issue constituted new aid and not existing aid within the meaning of Article 1(b) 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). It based that assessment on the fact, in particular, that the exemptions at issue did not exist before the entry into force of the EC Treaty in the Member States concerned, that they had never been analysed or authorised on the basis of the State aid rules, and that they had never been notified.

12 After setting out how the aid in question was incompatible with the common market, the Commission took the view that, having regard to the Council decisions authorising the exemptions at issue (‘the authorisation decisions’) and in the light of the fact that those decisions had been adopted on proposals by the Commission, the recovery of incompatible aid granted before 2 February 2002, the date of publication in the Official Journal of the European Communities of the decisions to initiate the formal investigation procedure, would be contrary to the principles of protection of legitimate expectations and legal certainty.

The proceedings prior to the appeal and the judgment under appeal

13 AAL brought an action for annulment of the decision at issue by application lodged at the Registry of the General Court on 23 February 2006.

14 By judgment of 12 December 2007, Ireland and Others v Commission, (T‑50/06, T‑56/06, T‑60/06, T‑62/06 and T‑69/06, not published, EU:T:2007:383), the General Court annulled the decision at issue. By judgment of 2 December 2009, Commission v...