Case T‑356/15

Republic of Austria

v

European Commission

(State aid — Aid planned by the United Kingdom in favour of Hinkley Point C nuclear power station — Contract for Difference, Secretary of State Agreement and Credit Guarantee — Decision declaring the aid compatible with the internal market — Article 107(3)(c) TFEU — Public interest objective — Promotion of nuclear energy — Need for State intervention — Guarantee Notice — Determination of the aid element — Proportionality — Investment aid — Operating aid — Right to submit observations — Public procurement procedure — Obligation to state reasons)

Summary — Judgment of the General Court (Fifth Chamber), 12 July 2018

1. State aid — Prohibition — Exceptions — Aid capable of being regarded as compatible with the internal market — Assessment in the light of Article 107(3)(c) TFEU — Criteria — Pursuit of a public interest objective — Whether the aid is appropriate, necessary and not disproportionate — Relevance in that respect of the existence of a market failure

   (Art. 107(3)(c) TFEU)

2. Judicial proceedings — Intervention — Application to support the form of order sought by one of the parties but advancing different arguments — Admissibility

   (Statute of the Court of Justice, Art. 40, fourth para.; Rules of Procedure of the General Court, Art. 142(1))

3. Acts of the institutions — Statement of reasons — Obligation — Scope — Commission decision on State aid — Account taken of the context and all the legal rules

   (Art. 296 TFEU)

4. State aid — Provisions of the Treaty — Scope — Measures pursuing an objective covered by the Euratom Treaty — Included — Consideration of the objectives of the Euratom Treaty in the context of the application of the State aid provisions of the FEU Treaty

   (Art. 106a(3) AE; Art. 107 TFEU)

5. State aid — Prohibition — Exceptions — Aid capable of being regarded as compatible with the internal market — Assessment in the light of Article 107(3)(c) TFEU — Criteria — Pursuit of a public interest objective — Concept — Promotion of nuclear energy — Included

   (Arts 1, second para., AE, 2(c) AE and 192, first para., AE; Arts 107(3)(c) TFEU and 194(2) TFEU)

6. State aid — Prohibition — Exceptions — Aid capable of being regarded as compatible with the internal market — Discretion of the Commission — Complex evaluation of economic matters — Judicial review — Limits

   (Art. 107(3)(c) TFEU)

7. State aid — Prohibition — Exceptions — Aid capable of being regarded as compatible with the internal market — Assessment in the light of Article 107(3)(c) TFEU — Criteria — Pursuit of a public interest objective — Whether the aid is appropriate, necessary and not disproportionate — Examination by the Commission — No obligation to quantify the grant equivalent arising from the aid measure

   (Art. 107(3)(c) TFEU)

8. State aid — Prohibition — Exceptions — Aid capable of being regarded as compatible with the internal market — Assessment in the light of Article 107(3)(c) TFEU — Criteria — Regulation No 651/2014 declaring certain categories of aid compatible with the internal market — Not binding in the context of an individual examination

   (Art. 107(3)(c) TFEU; Commission Regulation No 651/2014)

9. State aid — Planned aid — Notifying the Commission — Scope of the obligation — Need to notify the aid measures at the draft stage — Consequences

   (Art. 108(3) TFEU)

10. State aid — Commission decision — Assessment of the legality by reference to the information available at the time of adoption of the decision

    (Arts 108(2) TFEU and 263 TFEU)

11. State aid — Prohibition — Exceptions — Aid capable of being regarded as compatible with the internal market — Assessment in the light of Article 107(3)(c) TFEU — Criteria — Pursuit of a public interest objective — Whether the aid is appropriate, necessary and not disproportionate — Examination of the not disproportionate nature of the aid — Weighing-up of the advantages of the aid measures and their negative impact on the internal market — Components of the internal market

    (Art. 107(3)(c) TFEU)

12. State aid — Provisions of the Treaty — Scope — Taxes constituting the method of financing an aid measure — No hypothecation of the tax to the financing of the aid concerned — Not included

    (Arts 107 TFEU and 108 TFEU)

13. State aid — Examination by the Commission — Decision to initiate the formal investigation procedure provided for in Article 108(2) TFEU — Evolution of the Commission’s position at the conclusion of the procedure — Difference between the statement of reasons in the decision to initiate the procedure and that contained in the final decision — Lawfulness

    (Art. 108(2) TFEU; Council Regulation No 659/1999, Art. 6(1))

14. State aid — Prohibition — Exceptions — Aid capable of benefiting from the derogation under Article 107(3)(c) TFEU — Operating aid — Not included — Exceptions

    (Art. 107(3)(c) TFEU)

15. Approximation of laws — Procedures for the award of public works contracts, public supply contracts and public service contracts — Directive 2004/18 — Procedures for awarding contracts in the water, energy, transport and postal services sectors — Directive 2004/17 — Scope — Construction of a nuclear power station — State aid intended to ensure price stability for sales of electricity produced by that power station — No obligation for the beneficiary of the aid to execute works, supply products or provide services — Exclusion of the aid measure from the scope of Directives 2004/17 and 2004/18

    (European Parliament and Council Directives 2004/17 and 2004/18)

16. Approximation of laws — Measures of approximation — Common rules for the internal market in electricity — Directive 2009/72 — Creation of new nuclear energy generating capacity — Obligation to organise a tendering procedure or an equivalent procedure — Scope — Obligation to comply with the principles of equal treatment and transparency — Scope

    (European Parliament and Council Directive 2009/72, Art. 8)

17. State aid — Examination by the Commission — Administrative procedure — Obligation of the Commission to give notice to the interested parties to submit their comments — Scope

    (Art. 108(2) TFEU; Council Regulation No 659/1999, Art. 6(1))

1.  In order to be capable of being declared compatible with the internal market pursuant to Article 107(3)(c) TFEU, aid must be aimed at the development of an activity that constitutes a public interest objective and must be appropriate, necessary and not disproportionate. That provision does not, however, expressly include a condition relating to the existence of a market failure. Accordingly, in the context of the application of that provision, the question that is relevant is whether the public interest objective pursued by the Member State would be attained without that Member State’s intervention.

   While, in that context, the existence of a market failure may be a relevant factor for declaring State aid compatible with the internal market, the absence of market failure does not necessarily mean that the conditions laid down in Article 107(3)(c) TFEU are not satisfied. For example, State intervention may be considered to be necessary for the purposes of that provision where market forces are not capable by themselves of ensuring that the public interest objective of the Member State is achieved in sufficient time, even if, as such, that market cannot be considered to be failing.

   (see paras 48, 150, 151)

2.  See the text of the decision.

   (see paras 54-58)

3.  See the text of the decision.

   (see paras 63-67, 535)

4.  The fact that the provisions of the Euratom Treaty constitute special rules in relation to the FEU Treaty does not preclude Article 107 TFEU from being applied to measures pursuing an objective covered by the Euratom Treaty. In so far as the Euratom Treaty does not lay down exhaustive rules on State aid, Article 107 TFEU is intended to be applied to measures concerning the field of nuclear energy, even though they pursue an objective covered by the Euratom Treaty. However, in the context of the application of that provision to measures concerning the field of nuclear energy, it is necessary to take into account the provisions and objectives of the Euratom Treaty.

   (see paras 73, 74, 76, 78)

5.  Under Article 107(3)(c) TFEU, aid to facilitate the development of certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions to an extent contrary to the common interest, may be considered to be compatible with the internal market.

   The concept of common interest mentioned at the end of Article 107(3)(c) TFEU relates to the balance to be struck between the advantages and disadvantages arising from an aid measure, and precludes measures which adversely affect trading conditions to an extent contrary to the common interest from being authorised. The public interest objective pursued by the measure in question does not necessarily have to be an objective that is shared by all or by the majority of the Member States.

   In the context of the application of Article 107 TFEU to measures pursing an objective covered by the Euratom Treaty, it is necessary, also, to take into account the provisions and the objectives of the Euratom Treaty. In the light of the second paragraph of Article 1 and Article 2(c) of the Euratom Treaty, the Commission does not err in finding that a Member State is entitled to decide upon the promotion of nuclear energy and, more specifically, incentives for the creation of new nuclear energy generating capacity, as a public interest objective for the purposes of Article 107(3)(c) TFEU. That objective is related to the Euratom Community’s goal of facilitating investment in the nuclear field mentioned in Article 2(c) of the Euratom Treaty and it is apparent from the first paragraph of Article 192 of the Euratom Treaty that the Member States are to facilitate the achievement of the Euratom Community’s tasks. Moreover, it is apparent from the second subparagraph of Article 194(2) TFEU that each Member State has the right to choose between the different energy sources those they prefer.

   (see paras 82, 87, 95-97)

6.  See the text of the decision.

   (see paras 160, 161, 170, 372, 420)

7.  In order to be able to declare an aid measure to be compatible with the internal market under Article 107(3)(c) TFEU, the Commission must establish that it is aimed at a public interest objective set by the Member State and that, in the light of that objective, it is appropriate and necessary and that it does not adversely affect trading conditions or competition conditions disproportionately in the light of the advantages arising therefrom.

   Article 107(3)(c) TFEU does not, however, expressly require the Commission to quantify the precise amount of the grant equivalent arising from an aid measure. Accordingly, if the Commission is in a position to conclude that an aid measure is appropriate, necessary and not disproportionate without that amount being made explicit, it cannot be criticised for failing to quantify it.

   (see paras 248, 249)

8.  Regulation No 651/2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 TFEU merely provides for a standardised block exemption approach, but is not binding on the Commission in the context of an individual examination carried out directly on the basis of Article 107(3)(c) TFEU.

   (see paras 251, 497)

9.  See the text of the decision.

   (see paras 263-266)

10.  See the text of the decision.

    (see paras 333, 359, 361, 410, 416, 418)

11.  In the context of the application of Article 107(3)(c) TFEU, the Commission must weigh up the advantages of the aid measures at issue and their negative impact on the internal market.

    When identifying the negative effects on the internal market, the Commission is not obliged to take into account the extent to which the aid measures are detrimental to the protection of the environment. Although protection of the environment must be integrated into the definition and implementation of EU policies, particularly those which have the aim of establishing the internal market, it does not constitute, per se, one of the components of that internal market. That applies equally to the precautionary principle, the ‘polluter pays’ principle and the sustainability principle, and also to protection against terrorism.

    (see paras 516, 519)

12.  See the text of the decision.

    (see para. 523)

13.  The Commission’s considerations in the decision to initiate the formal investigation procedure provided for in Article 108(2) TFEU and in Article 6(1) of Regulation No 659/1999 laying down detailed rules for the application of Article 108 TFEU are preliminary assessments. Consequently, the reasons given for the decision adopted at the end of a formal investigation procedure cannot be considered insufficient merely because they are not completely identical to those given in the decision to initiate the formal investigation procedure. Thus, in a decision adopted at the end of a formal investigation procedure, the Commission is not obliged to present an analysis covering all the considerations contained in the decision to initiate the formal investigation procedure.

    (see paras 569, 627)

14.  Operating aid intended to maintain the status quo or to release an undertaking from costs which it would normally have had to bear in its day-to-day management or normal activities cannot meet the requirements of Article 107(3)(c) TFEU. Thus, operating aid which is limited to maintaining the status quo does not facilitate development within the meaning of that provision. Aid which does no more than lower the usual ongoing operating expenditure which an undertaking would have had to bear in any event in the course of its normal business cannot be considered to be pursuing a public interest objective for the purposes of that provision.

    However, there is nothing to preclude an aid measure which pursues a public interest objective, which is appropriate to and necessary for the attainment of that goal, which does not adversely affect trading conditions to an extent contrary to the common interest and which therefore satisfies the requirements of Article 107(3)(c) TFEU from being declared compatible with the internal market under that provision, irrespective of whether it must be characterised as investment aid or operating aid.

    (see paras 579, 580, 583)

15.  See the text of the decision.

    (see paras 641-676)

16.  See the text of the decision.

    (see paras 679-689)

17.  See the text of the decision.

    (see paras 699-728)