Brussels, 08/02/2007 (Agence Europe) - The European Commission decided on 8 February that the tax breaks on energy granted in Germany for double-use of energy products (for example steel production, where energy is a raw material) and their use in refining minerals (such as in the production of cement or glass) does not constitute a form of state aid under the EC Treaty, as they are an integral part of the national tax system.
By contrast, the Commission decided that the exemption of heavy fuel used for alumina production in France, Ireland and Italy did constitute state aid, because in these three countries these exemptions are very selective, and in practice only benefit one enterprise per country in only one sector (alumina production).
The Commission has concluded that 80% of the sum of the tax breaks granted from 1 January 2004 did not infringe Community competition law. Nevertheless, since the beneficiaries have not concluded binding agreements to improve their environmental performance, the remaining 20% is considered to be illegal aid, and the national authorities must now recover this money from the enterprises Alcan (France), Aughinish (Ireland) and Eurallumina (Italy).
In December 2005, the Commission had already ordered the repayment of part of the tax breaks granted for the production of alumina in these countries for the period 2002-2003 (EUROPE 9085). These member states are now obliged to suspend the payment of any aid, including the legal part, to the beneficiaries until such time as they have repaid the aid considered illegal under Thursday's decision and the one before it. (cd)