State Aid Law Blog

State Aid Uncovered Blog

In Lexxion’s State Aid Uncovered blog, Prof. Phedon Nicolaides publishes weekly critical analyses of recent State aid judgments and decisions. Each post presents the key points of a court judgment or EU Commission decision, places it in the context of similar case law or practice, assesses the underlying reasoning and highlights any inconsistencies or contradictions.

Guest contributions from other State aid experts will also be published on the blog at irregular intervals to complement the content of the blog posts.

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29. October 2024  |   State Aid Uncovered by Phedon Nicolaides

The Territorial Tax Systems May also Tax Profits Diverted Abroad
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Introduction Taxes are burdens on undertakings. They cannot be State aid. However, tax exemptions or reductions can be State aid if they cannot be objectively justified. When a tax measure is in the form of a reduction or exemption, it is relatively easy to establish its selectivity in the meaning of Article 107(1) TFEU. However, when a tax is levied […]
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16. October 2024  |   State Aid Uncovered by Phedon Nicolaides

European Court of Auditors, Report on the Implementation of the EU Budget for the 2023 Financial Year, 10 October 2024
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The annual report on the 2023 EU budget by the European Court of Auditors finds that in the field of State aid national authorities wrongly supported ineligible costs. Errors in public procurement and State aid were the largest source of irregularities. Main findings concerning public procurement and State aid “The risk of error is high for expenditure subject to complex […]
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15. October 2024  |   State Aid Uncovered by Phedon Nicolaides

Revenue from a Compulsory Charge Is a State Resource
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Introduction On 26 September 2024, the Court of Justice [CJEU] delivered four judgments in four related cases: C-790/21 P, Covestro Deutschland v Commission C-792/21 P, AZ v Commission C-794/21 P, Germany v Commission C-795/21 P, WEPA Hygieneprodukte v Commission All cases concerned appeals against the corresponding judgments of the General Court by which it dismissed the actions for annulment of […]
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8. October 2024  |   State Aid Uncovered by Phedon Nicolaides

Who is “Interested Party” that Can Challenge a Commission Decision and when Must the Commission Open the Formal Investigation Procedure
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Introduction On 5 September 2024, the Court of Justice of the EU [CJEU] delivered two judgments on the two most frequent procedural issues on State aid: Who has standing to challenge a Commission decision and when the Commission is obliged to initiate the formal investigation procedure. These two issues are closely connected. Those whose interests are harmed by State aid […]
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1. October 2024  |   State Aid Uncovered by Phedon Nicolaides

State Aid to the Operator of a Legal Monopoly
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Introduction In some Member States, the provision of potable water to households is a “closed” sector. This means that public funding of the operations of the water provider does not constitute State aid. However, according to the case law of the Court of Justice, for a sector to be considered closed to trade and competition it is not sufficient that […]
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24. September 2024  |   State Aid Uncovered by Phedon Nicolaides

Calculation of the Funding Gap of an Infrastructure Project that May also Benefit from Future Public Funding
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Introduction The Commission recently approved State aid granted by Czech Republic for the construction of a multifunctional arena in Brno, with a capacity of 13300 visitors [see SA.58891]. The aid measure was unusual because it foresaw possible future public funding to cover certain financial costs in case the net operating revenue would not be enough. However, the Commission approved possible […]
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25. September 2024  |   Guest State Aid Blog by Lexxion Publisher

The Cumulation of State Aid Granted by Different Member States — The Landwärme Case
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Guest State Aid Blog by Professor Leigh Hancher, Nicole Robins and Dr Philipp Schliffke[1] 1 Introduction The Renewable Energy Directive 2018/2001 (‘RED II’) states that ‘the promotion of the production and use of biomethane, its injection into a natural gas grid and cross-border trade create a need to ensure proper accounting of renewable energy as well as avoiding double incentives […]
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17. September 2024  |   State Aid Uncovered by Phedon Nicolaides

Although Member States Are Free to Determine their Tax Systems, they Must still Conform with State Aid Rules
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Introduction On 10 September 2024, the Court of Justice [CJEU] delivered its much anticipated judgment, in case C-465/20 P, Commission v Ireland & Apple. It ruled that Ireland had granted incompatible State aid to Apple through preferential tax rulings.[1] The judgment was the result of an appeal by the Commission against the judgment of the General Court in case T-778/16, Ireland […]
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10. September 2024  |   State Aid Uncovered by Phedon Nicolaides

Compensation for Switching to a New Broadcasting Frequency
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Introduction Normally the cost of compliance with mandatory regulations may not be offset, partially or fully, by State aid because it lacks incentive effect. The beneficiaries would have to incur those costs anyway. However, even in the case of mandatory compliance, State aid may still have an incentive effect if the undertakings concerned would cease altogether the activity in question. […]
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30. August 2024  |   State Aid Uncovered by Phedon Nicolaides

A State-Owned Company Acts as a Private Investor – Part II
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Part II: Advantage The Commission, first, explained that the “(80) intervention must be considered as a whole, considering the purpose and timing of the various stages in which AMCO’s intervention is to be made, within the context and contents of the second arrangement proposal. Whether or not a transaction is in line with market conditions must be established through a […]
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28. May 2024  |   State Aid Uncovered by Phedon Nicolaides

A Research Project Based on Collaboration with a Research Organisation
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Introduction After pre-notification contacts, Croatia notified, in March 2023, State aid amounting to a EUR 179.5 million for an R&D project regarding the development of an innovative autonomous electric vehicle [a “robo-taxi”]. The aid, in the form of a grant, was to be provided to Project 3 Mobility LLC [P3M]. The Commission approved it in decision SA.101759.1 The aid beneficiary, […]
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21. May 2024  |   State Aid Uncovered by Phedon Nicolaides

Authorisation of State Aid after the Start of a Project
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Introduction In June 2021, the European Commission, in decision SA.55526, approved an amount of EUR 167 million of State aid for the construction and operation of a liquefied natural gas [LNG] terminal close to Alexandroupolis in northern Greece. In December 2022, Greece notified a measure involving additional State aid of EUR 106 million for the same project. The Commission authorised […]
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14. May 2024  |   State Aid Uncovered by Phedon Nicolaides

Restructuring State Aid
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Introduction State aid to failing undertakings is the most distortionary form of public subsidies. They prevent the market exit of inefficient companies. For this reason, State aid for rescue or restructuring of undertakings in difficulty must always be notified to the Commission which examines each case very carefully and allows this kind of aid only when, among other things, the […]
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7. May 2024  |   State Aid Uncovered by Phedon Nicolaides

Public Procurement and State Aid
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Introduction A faulty public procurement procedure or the use of discriminatory selection criteria can confer an advantage on the chosen undertaking that may constitute an advantage in the meaning of Article 107(1) TFEU. The result will be infringement of both public procurement rules and State aid rules. A recent Commission decision, SA.47650, is instructive on how Member States should design […]
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30. April 2024  |   State Aid Uncovered by Phedon Nicolaides

A Case of a Narrow Tax that Is Not Selective
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Introduction On 17 April 2024, the General Court ruled, in case T-112/22, Ideella föreningen Svenska Bankföreningen med firma Svenska Bankföreningen, Näringsverksamhet & Länsförsäkringar Bank v Commission, that a Swedish tax on only nine banks was not selective by not taxing the many smaller banks.1 The applicants, a Swedish banking association and a Swedish bank, respectively, sought the annulment of Commission […]
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23. April 2024  |   State Aid Uncovered by Phedon Nicolaides

Pricing of Access to Infrastructure for the Treatment of Waste Water
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Introduction It is not unusual for EU courts to refer to the Commission’s 2016 Notice on the Notion of State Aid as a means of shedding light to the more obscure aspects of that notion. What is very unusual is for EU courts to treat the Notice as if it has the same status as the guidelines that bind the […]
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16. April 2024  |   State Aid Uncovered by Phedon Nicolaides

Awards by Arbitration Tribunal
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Introduction In an unusual judgment, the Court of Justice found on 14 March 2024, in case C-516/22, Commission v UK, that the UK had infringed Article 4(3) TEU, Article 108(3) TFEU, Article 267(1)&(3) TFEU and Article 351(1) TFEU, in conjunction with Article 127(1) of the Agreement on the withdrawal of the UK from the EU because the UK Supreme Court […]
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9. April 2024  |   State Aid Uncovered by Phedon Nicolaides

An Innovative Risk-Sharing Tool for the Support of an LNG Terminal
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Introduction The Commission, in decision SA.102163, authorised State aid for the construction of a terminal for liquefied natural gas [LNG] in Brunsbüttel, Germany.1 The project consists of an LNG import, storage and distribution facility with annual capacity of about 10 billion m3. The project is carried out by the German LNG Terminal GmbH [GLNG] which has three shareholders: the Dutch […]
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2. April 2024  |   State Aid Uncovered by Phedon Nicolaides

The Court of Justice Conflates Objective Justification with Policy Objective, in the context of Public Support of Green Electricity
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Introduction Suppose a Member State subsidises the installation of solar panels on the roof of a corporate building situated at number 5 on Main Street. Is this a general measure because there is no other building in the whole country with the same address? Of course, it is not a general measure. The uniqueness of the address is irrelevant. Apart […]
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26. March 2024  |   State Aid Uncovered by Phedon Nicolaides

Applying the Funding Gap Method to an Important Project of Common European Interest – Part II
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Introduction On 28 February 2024, the General Court delivered an important judgment in case T-390/20, Scandlines v Commission.(1) The judgment is important because it interpreted the Commission guidelines on Important Projects of Common European Interest [IPCEI], the funding gap methodology for determining the necessary amount of aid and the 2008 Commission Notice on state guarantees. Scandlines sought annulment of Commission […]
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