Brussels, 08/05/2002 (Agence Europe) - On Tuesday the European Commission took a final negative decision on proposed state aid to farmers in Sardinia (Italy) to reduce their energy costs by covering the difference between the cost of methane and more expensive gas-oil.
The Commission felt that this support measure was operating aid incompatible with the rules of the common market and that the aid should not therefore be paid.
The Commission concluded that "aid designed to reduce the difference between a more expensive type of fuel such as gas-oil and a cheaper one such as methane simply reduces overall production costs of farmers. (…) This would result in an artificial improvement of the competitiveness of these farmers".
The Commission's decision mainly bears on Article 21 of the Regional Law (Sardinia), No 21/00, which provides for State aid in favour of agricultural holdings (in particular glass houses) designed to cover the difference between the higher cost of gas-oil and the much cheaper cost of methane. As methane is not available in Sardinia, the Italian authorities consider that aid is justified to allow farmers on the island of Sardinia to compete on an equal footing with farmers in the rest of the European Union, who can rely on the use of cheap methane.