Brussels, 21/03/2003 (Agence Europe) - The European Commission has partially approved an aid programme called "Waste Resources Action Programme" (WRAP). This programme comprises several aid measures: a risk capital fund ("WRAP Pilot Fund"), a guarantee fund ("WRAP" Lease Guarantee Fund) and various grant funding instruments (notably the "WRAP" Environmental Scheme" and the "WRAP regional and SME schemes"). The aim of these measures is to promote waste recycling in the United Kingdom.
The Commission took a positive decision on the aid measures to small and medium enterprises in the assisted areas. However, it is not yet certain whether other aspects of the "WRAP Environmental Scheme", under which investments will be made by private companies in recycling projects outside the assisted areas, will be approved.
The objective of this part of the package, which has a budget of 21 million euro, is to subsidise companies investing in recycling facilities. Selected companies will have to commit to recycle a certain amount of waste every year. However, unlike other WRAP aid measures, this scheme will allow the British authorities to provide investment aid to large firms outside assisted areas.
It also permits investment aid in assisted areas at higher levels than those allowed under the guidelines on national regional aid, or by the Commission regulation on state aid to SMEs. The British authorities notified this scheme under guidelines on state aid for environmental protection. The Commission is not certain that the guidelines apply to this particular type of investment (they generally apply to investments used to reduce pollution caused by the aid beneficiary). It stresses that it is not definite that they can be applied to investments with indirect effects on the environment, such as increasing recycling activity.
Furthermore, even if they do apply, the Commission does not yet know if the method for calculating eligible costs would be in conformity with the provisions. It has therefore decided to open a formal inquiry procedure on the "WRAP Environmental Scheme". This procedure does not prejudge the outcome of the ensuing in-depth investigation. It will, however, enable interested third parties to express their views on the proposed aid scheme.