Brussels, 25/04/2012 (Agence Europe) - The European Commission decided on Wednesday 25 April that public support in favour of “Zweckverband Tierkörperbeseitigung in Rhineland-Palatinate” (ZT) - a local provider of services for the disposal of dead animal carcasses and slaughterhouse waste - was incompatible with EU state aid rules, and has ordered Germany to recover incompatible aid of approximately €30 million from the recipient. The Commission investigation found, in particular, that ZT incurred no extra costs for discharging a public service, because it had sufficient spare capacity in addition to its normal operations to master an epidemic outbreak and was therefore not entitled to receive public compensation.
ZT has continuously received annual support of approximately €2.25 million from its owners, the regional authorities of Rhineland-Palatinate, to make good losses incurred. Germany contends that those annual public payments are justified in compensating ZT for the discharge of a public service obligation, namely the retention of spare capacity to be able to deal with the increased number of carcasses in cases the event of an epizootic (for example, foot-and-mouth disease). This line of reasoning was also taken by the highest German Administrative Court (Bundesverwaltungsgericht) in national proceedings on the same case.
The Commission's in-depth investigation established that the ZT bore no additional costs for retaining extra spare-capacity, because it could rely on unused capacity at night and at weekends in times of crisis. Furthermore, the Commission, basing its position on European Court of Justice case-law (GEMO judgment of November 2003, Case C-126/01), concluded that polluters, such as farmers and slaughterhouses, are fully liable for payment of all costs related to the disposal of animal waste. The Commission's investigation also established that ZT had used the state support to pursue an economically unsustainable and aggressive pricing policy by offering disposal services at a loss. Consequently, the Commission found that ZT's annual loss compensations could not be justified as public service compensation but merely covered the company's normal operating costs, giving it an undue economic advantage over its competitors who have to operate without subsidies of this sort.
The Commission's decision is in line with EU rules on state aid in the agriculture and forestry sector, which clearly hold that only farmers are eligible for state aid to finance the disposal costs of dead animal carcasses. No other companies, like ZT, are eligible for state aid, in order to avoid any undue distortions of competition. (LC/transl.rt)