Brussels, 05/04/2007 (Agence Europe) - On Wednesday 4 April, the European Commission authorised tax reductions worth €38 million which the Portuguese government intends to give to the company 'About the Future', a subsidiary of the Portucel Soporcel group, for the creation of a new production plant for uncoated woodfree paper in Setúbal. The Commission's investigation found the aid to be compatible with the single market, as it met the requirements of the regional aid guidelines and the rules for regional aid for large investment projects. The investment project, which is spread over 5 years (2006-2010), is aimed at setting up a new plant for the production of uncoated woodfree paper in the region of Setúbal. The project is expected to create around 180 new jobs in Setúbal, a disadvantaged area with a GDP per capita of 60.8% of the EU25 average, eligible for regional aid for the development of certain economic areas (under Article 87(3)(c) of the EC Treaty).
The Commission's assessment of regional aid to large investment projects rests on the market power of the beneficiary and on the production capacity created by the investment on the European market. The Commission found that Portucel Soporcel's share in the relevant markets would not exceed 25%, either before or after the planned investment. Moreover, the Commission verified that the capacity increase generated by the project would be below 5% of the apparent consumption of the product concerned in the European Economic Area. The Commission based its decision to authorise the aid on these two criteria. (cd)