Case T‑257/18

Iberpotash, SA

v

European Commission

Judgment of the General Court (Second Chamber), 16 January 2020

(State aid — Mining sector — Measure consisting (i) in the reduction of financial guarantees for the restoration of mining sites and (ii) in State investment for the restoration of mining sites ensuring a higher level of environmental protection — Decision declaring aid partly incompatible with the internal market and ordering its recovery — Concept of ‘aid’ — Advantage — Transfer of State resources — Selective nature — Legitimate expectations — Legal certainty — Calculation of the amount of the aid)

1. State Aid — Concept — Grant attributable to the State of an advantage by means of State resources — Advantages involving a reduction of the State budget or risking such a reduction — Need to establish a sufficiently direct link between the advantage given and a reduction or concrete risk of reduction of the State budget — Mine operating licences granted on the basis of insufficient financial guarantees in the light of the legal risk of having to pay to remedy any environmental damage, the costs of which will be borne by the Member State — Included

   (Art. 107(1) TFEU)

   (see paragraphs 49-57, 60-80)

2. State Aid — Commission decision — Assessment of the lawfulness by reference to the information available at the time of adoption of the decision — Characterisation of a measure as State aid — Applicant having participated in the formal investigation procedure not able to rely, in support of his or her action, on factual or legal elements not submitted during that procedure

   (Arts 108(2) and 263 TFEU)

   (see paragraphs 92, 93, 99, 107, 112)

3. State Aid — Concept — Legal nature — Interpretation on the basis of objective factors — Complex economic assessment — Judicial review — Scope

   (Art. 107(1) TFEU)

   (see paragraphs 95, 96)

4. State Aid — Concept — Selective nature of the measure — Assessment criterion — Individual aid — Presumption of selectivity

   (Art. 107(1) TFEU)

   (see paragraph 117)

5. State Aid — Recovery of unlawful aid — Aid granted in breach of the procedural rules of Article 108 TFEU — Potential legitimate expectations of the beneficiaries — Legal certainty — Protection — Conditions and limits

   (Art. 108(2) TFEU; Council Regulation No 2015/1589, Art. 16(1))

   (see paragraphs 130-151)

6. State Aid — Concept — Grant of an advantage to the beneficiaries — State intervention mitigating the burdens normally included in the budget of an undertaking — Measure of covering a waste heap, decided on and financed by the public authorities, substituting for the general responsibility incumbent on the undertaking owner for the protection of the environment — Included — Measure going beyond EU requirements for environmental protection — Not relevant

   (Art. 107(1) TFEU; Commission notice 2008/C 82/01, paragraphs 7, 8 and 9)

   (see paragraphs 157, 158, 162-174)

Résumé

In the judgment in Iberpotash v Commission (T‑257/18), delivered on 16 January 2020, the General Court dismissed the action for annulment brought by the company Iberpotash, SA, against the decision of the Commission declaring unlawful and incompatible with the internal market two aid measures granted to it by the Kingdom of Spain within the context of its mining activities. ( 1 )

Iberpotash, a Spanish subsidiary of the world’s largest fertiliser producer and owner of two potash mines at the Súria and Sallent/Balsareny sites in Catalonia, obtained in 2006 and 2008, from the Generalidad de Cataluña (Regional Government of Catalonia, Spain) environmental permits to extract potash. Those permits had been granted on the basis of restoration programmes, which had to define measures to prevent and compensate for expected harmful environmental consequences of planned extractive activities, required under the Spanish rules ensuring, inter alia, the transposition of Directive 2006/21. ( 2 ) The discharge of those programmes was secured by the obligation on the mining operator to provide financial guarantees, calculated depending on the area affected by the restoration and its overall cost. Those guarantees were initially set at EUR 773 682.28 (increased to EUR 828 013.24 in 2008) for the Súria site and EUR 1130128 for the Sallent/Balsareny site. Following a court decision of 11 October 2011, holding that the restoration plan for the Sallent/Balsareny mine was incomplete and that the financial guarantee provided for that purpose was too low, these amounts were increased by the Spanish authorities to EUR 6 160 872.35 and EUR 6 979 471.83 respectively. Furthermore, on 17 December 2007, the Spanish national and regional authorities decided to cover, at their own expense, the Vilafruns waste heap, also owned by Iberpotash.

In the contested decision, adopted following an anonymous complaint, the Commission took the view that, as a result of the unduly low level of the guarantees provided, Iberpotash had received aid in the form of lower guarantee fees. Moreover, it considered that Iberpotash had also received investment aid to cover the Vilafruns waste heap. Since that aid, granted in breach of the notification requirement on the Member States ( 3 ) is unlawful and incompatible with the internal market, the Commission had ordered its recovery.

In its judgment, the Court first confirmed that the low level of financial guarantees provided for the operation of the two mines had to be categorised as State aid and that, consequently, the Member State had to recover it.

First, it noted that, to the extent that the amounts of the two financial guarantees had been established by the Regional Government of Catalonia in the two decisions granting the operating permits, those measures were attributable to the State, and then confirmed that their insufficiency increased the concrete risk for the State of having to call upon its resources to cover the actual costs of the environmental damage and restoration, and therefore involved State resources. In that regard, it pointed out, inter alia, that the Spanish State was subject, under the applicable national legislation, to a subsidiary obligation to intervene in the event of non-compliance with the environmental obligations imposed on the undertakings engaged in mining activity. It also recalled that, in accordance with Directive 2004/35, ( 4 ) the competent national authorities may take measures to remedy the environmental damage incumbent on the operators, it being specified that, in the absence of such intervention, those authorities might be in breach of their obligations under Directive 2006/21, be the subject of infringement proceedings and be ordered to pay periodic penalty payments. It further stated that the purpose of the obligation to provide a guarantee ( 5 ) was to make sure that the mining companies have sufficient resources set aside to cover future mine restoration costs, whatever their financial situation might be in the future, and to ensure that the State does not have to intervene instead. Rejecting, moreover, the arguments put forward by Iberpotash concerning, inter alia, its financial capacity, which may change at any time, and the fact that the loss of revenue concerned the budget of a private banking institution, the Court concluded that the insufficiency of the financial guarantees required in the present case presented a sufficiently concrete risk of imposing an additional burden on the State in the future for the measures to be categorised as State aid.

Secondly, the Court confirmed that since the level of the guarantees was indeed inadequate and significantly lower than that which would have been necessary to cover the costs of restoring the sites, and since the measures were adopted by means of specific operating permit decisions, they conferred a selective advantage on Iberpotash. Within the context of its analysis, the Court found, in particular, that the fact that the Commission had not engaged in its own evaluation of the correct levels of the financial guarantees did not amount to a breach of its duty of care, since it was justified by the discretion afforded to Member States in that regard by Article 14 of Directive 2006/21.

Thirdly and lastly, the Court decided that the obligation on the Member State to recover the aid that had thus been granted unlawfully did not entail a breach of the principle of the protection of legitimate expectations — since Iberpotash had not established that it had received sufficiently precise, unconditional and consistent assurances arising from a positive action taken by the Commission and had not demonstrated the existence of exceptional circumstances — or of the principle of legal certainty, since the finding in this case of a transfer of State resources does not appear unforeseeable in the light of the Commission’s previous practice for an observant and circumspect operator.

In the second place, the Court confirmed that the covering of the Vilafruns waste heap, decided on and financed entirely by the public authorities, constituted a positive benefit in the same way as a subsidy and necessarily entailed a benefit for Iberpotash. Indeed, that measure contributed to resolving the problem of pollution in an effective, long-lasting and not disproportionate manner, releasing Iberpotash from its general responsibility under the applicable national and EU legislation continually to rectify any negative consequences of the management of the site and dispensing with the need to implement another restoration measure for a very long period. It concluded that the measure had favoured the latter by reducing future environmental risks. Moreover, while acknowledging, as the Commission has observed, that Iberpotash was in a perfectly lawful situation with regard to compliance with its environmental obligations, the State having decided to adopt a higher level of environmental protection than that which was necessary at the time of the adoption of the contested decision, the Court held that, as an undertaking which owns the site, it was not, however, exempt from bearing the costs thereof, further specifying that the contested decision took that factor into consideration by requiring the recovery of only part of the amount of the State investment thus made.

( 1 ) Commission Decision (EU) 2018/118 of 31 August 2017 on State aid SA.35818 (2016/C) (ex 2015/NN) (ex 2012/CP) implemented by Spain for Iberpotash (OJ 2018 L 28, p. 25).

( 2 ) Directive 2006/21/EC of the European Parliament and of the Council of 15 March 2006 on the management of waste from extractive industries and amending Directive 2004/35/EC (OJ 2006 L 102, p. 15).

( 3 ) Article 108(3) TFEU.

( 4 ) Directive 2004/35/EC of the European Parliament and of the Council of 21 April 2004 on environmental liability with regard to the prevention and remedying of environmental damage (OJ 2004 L 143, p. 56).

( 5 ) Provided for in Article 14 of Directive 2006/21.