12 th of February, 2014

Transcription

1 Memorandum 12 th of February, 2014 Ministry of Enterprise, Energy and Communications Sweden Division for Market and Competition Deputy Director Christian Berger Telephone Swedish comments on the draft for a revised General Block Exemption Regulation (GBER) First and foremost, the Swedish Government would like to congratulate the Commission on the mammoth task of extending the General Block Exemption Regulation. It is clear that the draft contains a number of improvements involving, amongst other, simplified application of the rules by national authorities in supporting start-ups, support for education and the conditions for cumulation of aid. Other improvements include the introduction of certain new categories of aid, such as broadband infrastructure, culture and heritage conservation and sport and multifunctional recreational infrastructure. A key aspect of the SAM process, which we support, is the shift from ex ante to ex post control, reducing the administrative burden of the Commission and the Member State s alike and opening up manoeuvring possibility to better enforce the state aid rules conformingly in the EU. A prerequisite for this, however, is active enforcement and control by the Commission to confirm that the rules indeed are followed by the Member States and that a uniform application of state aid throughout the EU is ensured. Against this background, it seems particularly important that the new GBER will be sufficiently transparent, predictable and simple to apply. It is also important that the Commission is prepared to make adjustments and additions to the regulation if such need should arise. Important aspects in relation to environment taxes Aid in the form of tax reductions from environmental taxes pursuant to Directive 2003/96/EC represents the major bulk of the total Swedish state aid granted. Furthermore, almost all those aid schemes Postal address Telephone n.registrator@regeringskansliet.se SE Stockholm SWEDEN Visitors' address Fax Mäster Samuelsgatan

2 fall under the present GBER, with the result that as much as 70% of all Swedish state aid currently is handled within the GBER by far the highest percentage of GBER aid in the EU. We are therefore pleased to see that the Commission Services has taken many of our previously expressed environmental tax concerns into consideration. This particularly relates to the exception of Article 40 from the non-application of the GBER for large aid schemes (Article 1.2 (a) of the draft). GBER is an appropriate procedure when it comes to aid in the form of tax reductions respecting the EU minimum tax levels in Directive 2003/96/EC. Also, we are satisfied that the ex-post evaluation provisions will not cover aid schemes falling under Article 40. However, due to the special characteristics of environmental taxes, we cannot enough stress the importance of special consideration relating to the transparency provisions of the draft GBER. Therefore, please give the comments on Article 9.3 special consideration. Further, in our comments given separately on the draft EEAG, we will comment on the lack of a full consistency between Article 40 of the GBER and the corresponding provision of the EEAG and suggest some amendments to the EEAG text in that respect. Point (9) of the preamble Article 1.2 (a) makes an exception from the threshold requirements for environmental tax aid schemes under Article 40. The text in point 9 ought to be made consistent with Article 1.2 (a). See further comments under Article 40. Point 21 of the preamble Point 21 of the preamble refers to aid in the form of tax advantages and corresponds to Article 6.4. However, Article 6.5 lays down certain exemptions from that provision, notably in point (c) regarding aid in the form of environmental tax reductions under Article 40. To achieve more clarity, it would be preferable to also mention Article 6.5 in point 21. Article 4(1) h: We are hesitant as to why feasibility studies are given such a high maximum aid ceiling. Aid up to 7.5 million EUR per study is both a high amount in absolute terms, and also as a high ceiling in relation to what is indicated for (entire) innovation clusters. We propose that the aid ceiling should be lowered. 2

3 3 Article 5 Transparency of aid Please note that the word not needs to be deleted in the first sentence of paragraph 2 of the Swedish version, otherwise the whole paragraph will have an incorrect meaning. Article 6.2 Incentive Effect A starting point in Article 6.2 is that incentive effect is considered missing and GBER thus not applicable if the beneficiary has failed to submit an aid application before the project or the activity in question has begun. One important issue which needs to be addressed in this context is when GBER aid is channelled through an intermediary. Aid provided in this way is common, and the intermediary is typically an actor that initiates, co-ordinates and implements aid measures which in turn will benefit other actors. In those cases, it will be the intermediary which will have to do the formal application for aid and not the actual beneficiaries which will participate in and benefit from the measure in question. This type of project design can with respect to GBER refer to several different aid categories, such as SME s participation in trade fairs, cross-border co-operation projects, innovation aid for SME s in the form of innovation advisory and supporting services, educational aid, etc. We therefore suggest that Article 6.2 should be amended with the following: Where aid is channelled through an intermediate body that initiates and implements an aid measure whereby undertakings benefit in the next stage in the form of benefits or lower price, the aid shall be considered to have an incentive effect if the intermediary has submitted a written application to the Member State concerned before the measure starts. The application for aid shall include at least the information set forth in the first section, letters b-d. As a consequence of this, the GBER s preamble will also be need an amendment, for instance in point 22, which states that intermediaries has a role to play in the implementation of certain aid measures aimed at groups of undertakings, and that the incentive effect is assumed as long as the intermediary has filed an application before the activities have started. Article 6.5 Incentive effect This paragraph should be amended to include aid to regional urban development under article 16; compare point 22 of the preamble, first sentence.

4 4 Article 8.4 Cumulation Paragraph 4 should be amended to include aid to regional urban development under Article 16. Article 9.3 Publication and information The requirement for Member States to publically display information on the level of each individual beneficiary (paragraph 1.c)) is still a matter of great concern to us, in relation to aid schemes in the form of reductions in environmental taxes under Article 40. When it comes to transparency, we fully agree with the Commission on the importance of maintaining this principle. Member States, economic operators, and the public shall have easy access to all pertinent information about aid awarded under the GBER. However, any requirements should be targeted at what is not already transparent. When it comes to general environmental tax reductions, it is clear beforehand who will benefit from the aid and what aid amount any specific firm will receive. This is all laid down in the national tax legislation and as a part of the principle of open government legislative texts are publically available. Let us take an example: the Swedish aid scheme relating to a generally lower energy tax rate on electricity used by the manufacturing industry. This section of the business sector is well defined and the lower rate in SEK per kwh is laid down in the tax law. Thus, the aid amount any specific firm will receive per kwh is known, both for the firm itself and for its competitors. There is no margin of discretion for the Tax Authority, as this lower tax rate is the rate that by law applies within certain sectors. To publish a list of what total aid amount a specific firm has gotten, would therefore only show how large its energy usage has been, nothing else. This information would not give the competitor any added value from a state aid point of view compared to the information which is already public today, and an anonymized list would make no sense at all. Instead of making some minor publishing changes, it would in our view instead be better to make a proper exemption from the publishing obligations for such tax aid schemes where it clearly provides no added value since the aid is clear beforehand. We would therefore like to propose the following wording of Article 9.3: 3. For schemes in the form of reductions in environmental taxes under Article 40, the requirement of information on individual aid awards set out in paragraph 1 (c) should not apply. For such schemes Member States need, in addition to the conditions set out in paragraph 1 (a) and 1 (b), provide only details of the categories of undertakings benefitting from the tax reductions

5 5 and the sectors of the economy most affected by those tax reductions. As above, paragraph 3 should also be amended to include aid to regional urban development under Article 16. Article 9.4 Publication and information As is apparent from the draft provision, information on individual aid granted shall be published without delay, i.e. on the date of the grant. As regarding Article 6.2 above, the issue of how this paragraph should be applied when GBER aid is channelled through an intermediary needs to be addressed. Due to the specific conditions which follows from such a project design we suggest the following amendment to paragraph 4: "Where aid to undertakings is channelled through an intermediate body as described in Article 6.2, last section, information on individual aid as specified in point (c) of paragraph 1, shall be made available at the latest when the intermediary reports the outcome and the distribution of the actual costs incurred under the project." An subsequent amendment would then also be required in the box named Date of granting in the chart in Part III of Annex III, in the form of a footnote stating that the date in question may be when the intermediary was granted aid by the Member State for the implementation of the measure in question. Article 15.2 Regional operating aid The Swedish regional transport aid is an approved aid scheme which has been in place more or less unchanged since Sweden joined the European Community in The purpose of the aid scheme is to provide some compensation for the cost disadvantages in the four northernmost regions because of their geographical position and to add value to its products through refinement. The aim is to preserve and develop the businesses in our very sparsely populated areas and thus counter the ongoing depopulation process. During the current period we have been forced to rely on various legal grounds for approval of a scheme, which must be considered as an anomaly. It is also difficult to see any valid reason for why, in a block exemption context, one would have different treatment between outermost and sparsely populated areas. Another factor is that the Commission repeatedly for these last 19 years has approved the Swedish transport aid as such. The basic mechanisms of the aid is the same for both incoming and outgoing transports and the Commission should, with its extensive experience of this scheme, reasonably be able to have it covered by the GBER.

6 6 We therefore propose the following amendment to the fourth bullet point of paragraph 2(a) in accordance with Annex II of the 1998 guidelines (OJ C74, 10th of March 1998). An aid scheme for both incoming and outbound transport aid for sparsely populated areas fits well within the GBER. It is a coherent scheme for which the purpose and logic of the aid is to compensate for additional cots due to long distances. "for outermost regions and sparsely populated areas, the eligible additional transport costs may include the costs of transporting primary commodities, raw materials or intermediate products from the place of their production to locations in outermost areas and sparsely populated areas, where they are further processed. Article 16.8 and 16.9 Regional urban development aid This article uses no less than three different wordings to describe the process on how fund managers and private investors should be selected. Through; an open, transparent and non-discriminatory process [16.8(a)], an open, transparent, and non-discriminatory call [16.8(b)] and an open, transparent, and non-discriminatory competitive call [16.9(b)]. Any possible differences between these three processes should be clarified. If they describe the same intended process, then the wording should also be identical. Section 2 Aid for SMEs This section should be amended with a specific provision corresponding to Article 26 of the 2008 GBER regarding the possibility to grant aid up to 50% of the cost for the purchase of external consulting services. We would like to emphasise the importance that such a provision remains in the GBER in order to provide sufficient flexibility regarding which consultancy services that can be supported, since the individual needs of a certain SME can be quite different. Like before, expenses that are of a continuous or periodically returning nature should of course not be regarded as eligible costs. Article 18.2 Aid for SME participation in fairs Given the need to particularly aid internationalisation of the smallest group of undertakings, we suggest a certain widening of the conditions for the aid. As a suggestion, paragraph 2 could perhaps be

7 amended in order to clarify that for the smallest category of undertakings, participation in a particular fair up to a maximum of 3 times may be considered as an eligible cost. Experience suggests that a repeated attendance at one and same particular fair may be needed in order to gain foothold on a new market and the smallest undertakings have special needs to get aid for these expenses. The current aid restrictions of just one visit per fair would then continue to apply to medium-sized undertakings. Article 19 Aid for SMEs cooperation cost linked to ETC projects We are hesitant as to why GBER should be applicable when supporting SME s co-operation only in European transnational projects. Co-operation and knowledge transfer between SME s can also be important in a national and regional context and the costs involved may need to be subject to some aid from the Government. We therefore propose that Article 19 is adjusted in order not to be limited specifically to ETC projects but instead generally apply to Aid for SMEs cooperation costs. Paragraph 1 should then be adjusted to state that alongside projects for European Territorial Cooperation, general cooperation projects which promotes greater competitiveness for SME s shall also be covered by the GBER. Different aid intensities for the different groups would then probably be warranted; paragraph 4 could for instance state 75% for ETC Projects and 50% for national or regional SME projects. Article 24.4 Aid for research and development projects The requirement to deduct the value of subsequent commercial use from a commercially usable prototype or pilot within five years of completion creates considerable legal uncertainty and will unduly complicate the practical usage of the GBER. Incentives for companies to seek aid and thus perform a certain development project will be diminished with this proposal, especially in the case of development projects which would have been initiated by small undertakings. Paragraph 4 should therefore be deleted from the GBER. To the extent that this is not possible; we suggest that a threshold is introduced to the paragraph so that at least smaller projects are excluded from its scope. A possible level is 5 million EUR, which can be compared to the threshold for notification of innovation aid for SMEs. Article 26.6 Aid for innovation clusters We welcome the inclusion of innovation clusters into the GBER, as well as the possibility to provide aid up to 50 % of eligible costs and the increased flexibility facilitating payment of cluster aid over time. For clarity reasons, we suggest an amendment to paragraph 6 which 7

8 8 clarifies that Member States are free to pay the aid for innovation clusters in the time-frame they see fit. "The aid intensity of investment aid for innovation clusters shall not exceed [50] % of the eligible costs. The Member States may decide the more precise conditions, including distribution over time, under which the aid shall be paid to the cluster organisation. Article 26.7 Aid for innovation clusters We oppose the limitation in paragraph 7 of operational aid to a period of 5 years. We feel a period of 10 years would be more suitable. Article 26.8(c) Aid for innovation clusters Regarding paragraph 8(c) the addition of costs from transnational cooperation as eligible is welcome. However, as with Article 19 above, this paragraph should be extended to cover also a situation when the cluster initiates interdisciplinary cooperation in a national or regional context. Generally, there are good reasons for encouraging cooperation between different clusters, regardless of their geographic location. Article 26.9 Aid for innovation clusters As with paragraph 6 above, we propose the following wording of paragraph 9: "The aid intensity of operating aid shall not exceed [50] % of the total eligible costs during the five years period. The Member States may decide the more precise conditions, including distribution over time during the period of the aid, under which the aid shall be paid to the cluster organisation. Section 7 Aid for environmental protection When it comes to aid granted in the support of biofuels and bio liquids, the general approach of the Commission seem to be that of enforcing provisions in the GBER based on the Commission s draft proposal COM (2012) 595. While we certainly support the general approach of that proposal, there are parts of the Directive that still need to find an acceptable solution. The outcome of the deliberations in the Council and the EU Parliament on this proposal is still under negotiation and is not yet clear. Thus, we strongly oppose relating any provisions in the GBER to a possible, not yet decided, outcome of these negotiations. In particular, we do not agree that in the GBER should make a distinction of biofuels produced from cereal and other starch rich crops, sugars and oil crops on one hand and so-called advanced

9 9 biofuels on the other hand. Such a distinction is clearly premature in the light of the ongoing negotiations. In our view, it is far too early to partially or wholly remove aid for conventional biofuels. Both conventional (first generation) and advanced (second generation) biofuels will be needed in order to replace fossil fuels. The choice between any of them in the individual case should be based on fair economic and environmental requirements and not by disadvantaging either category in advance. The proposal would mean that biogas production based on so-called catch crops would be reduced. This would run counter to our efforts to increase resource efficiency. Large arable lands lie fallow and are not used for food production. In Sweden alone this could amount to about hectares. The use of this arable land for biofuel production is therefore one important tool to achieve the goal of increased resource efficiency. At the same time there are significant amounts of residues and waste from the food production itself, which can be used for biogas production. The ability to cultivate so-called catch crops also provides valuable source for biofuel production. Further, catch crops help to reduce nitrogen leakage and can also give better yields. As a consequence of this, Article 39a, paragraph 2, and Article 39c, paragraph 3, should be amended. Article 39a.2 Investment aid for the promotion of energy from renewable sources Following the discussion under Section 7 above, paragraph 2 of Article 39a should be deleted: 2. Aid for the production of biofuels shall be exempt from the notification requirement only to the extent that the investments are not used or the production of biofuels produced from cereal and other starch rich crops, sugars and oil crops as defined in the Commission s proposal COM(2012) Article 39b.6 Operating aid for the promotion of electricity from renewable sources In the Commissions draft Guidelines on environmental and energy aid for (EEAG), it is pointed out that: Unlike most other renewable sources of energy, biomass requires relatively low investment costs but higher variable operating costs. Higher operating costs may prevent a biomass plant from operating even after depreciation of the installation as the variable operating costs can be higher than the marginal revenues. On the other hand, an

10 existing plant may operate by using fossil fuel instead of biomass as an input source if the use of fossil fuel as an input is more economically advantageous than the use of biomass. To preserve the use of biomass in both cases, the Commission may find aid to be compatible. This is inconsistent in relation to the relevant Articles in the GBER. In order to remove this inconsistency paragraph 6 of Article 39b should be amended accordingly. 6. Aid shall only be granted until the plant generating the electricity from renewable sources has been fully depreciated according to generally accepted accounting principles. Any investment aid previously received must be deducted from the operating aid. Article 39c.3 Operating aid for the promotion of energy from renewable sources in small scale installations Following the discussion under Section 7 above, paragraph 3 of Article 39c should be deleted: 3. Aid shall not be granted to installations producing biofuels from cereal and other starch rich crops, sugars and oil crops as defined in the Commission s proposal COM(2012) Article 39c.6 Operating aid for the promotion of energy from renewable sources in small scale installations Following the discussion under Article 39b above, paragraph 6 of Article 39c should also be amended accordingly: 6. Aid shall only be granted until the installation has been fully depreciated according to generally accepted accounting principles. Any investment aid granted to an installation in addition to the operating aid under this provision must be deducted. Article 40 Aid in the form of reductions in environmental taxes under Directive 2003/96/EC We have noted a disturbing discrepancy between the Commission Memo on the Evaluation of State Aid in the GBER on one hand and the GBER itself on the other. There seems to be a lack of legal base in the GBER for a provision which is clear from the memo: namely that Aid schemes under Article 40 will not be subject to an ex-post evaluation. We cannot find such a provision in the GBER and would therefore suggest that the GBER is amended accordingly to provide an adequate legal basis for this. Article 43 Aid for environmental studies According to the paragraph 1, aid can be granted for environmental studies, including energy audits, if it is directly linked to investments referred to in this section. For clarity reasons, it should be explained 10

11 either in Article 43 or in point 64 of the preamble that the possibility of receiving aid is not limited by whether the relevant investment takes place or not, since the study can preclude it. Article 44.1 Aid schemes to make good the damage caused by certain natural disasters To reflect current Commission practice, Paragraph 1 should be extended to incorporate aid due to severe storms alongside other wind-related natural disasters such as hurricanes and tornadoes. Sweden has had first-hand experience of two approved aid schemes aimed at making good the damage caused by the storm Gudrun (see cases N310/2005 and N185/2006 respectively). Given our geographical location, we cannot exclude the possibility of future severe storms of such magnitude. Aid schemes to make good the damage caused by earthquakes, avalanches, landslides, floods, tornadoes, hurricanes, severe storms, volcanic eruptions and wild fires shall ( ) Annex I, Definitions We note that some definitions used in the draft GBER and the draft Framework for state aid for research and development and innovation differ from each other. This is true for at least the definitions of innovation cluster, aid intensity and individual aid. As stated by the Commission earlier in the SAM process, terms should have same meaning in all Commission documents, or an explanation as to why not should be given. Annex I, point 16 intangible assets Intangible assets are initially generated by someone, for instance and aid beneficiary, and there is in our view no reason to exclude this fact from the definition. We therefore suggest the following wording: 'intangible assets' means assets generated, or assets acquired through a transfer of technology, such as patent rights, licences, know-how or other intellectual property Annex I, point 92 innovation clusters The definition in the proposed GBER is slightly different than in the proposed R&D&I-framework. We find no reason to narrow the definition of the framework. Rather, the definitions in both places need to be further developed since, amongst other, not all innovation clusters necessarily must share common facilities. Further, the definition reflects an overly strict notion of what a cluster is and hinders possible development in this respect. The key issue here is well explained in the definition of aid to innovation clusters in paragraph 12(e) of the draft framework, namely: tackling market 11

12 failures linked with coordination problems hampering the development of clusters, or limiting the interactions and knowledge flows within clusters. The underlying idea should be something like "clustering" or similar, which refers to dynamism and movement i.e. the activities and developments conducted within the cluster, not as an organization viewed from a static perspective. We therefore suggest a more dynamic wording: 'innovation clusters' means structures or organised groups of independent undertakings (such as innovative start-ups, small, medium and large undertakings, as well as research and knowledge dissemination organisations, non-for-profit organisations and other related economic actors) designed to that continuously stimulate innovative activity by promoting the sharing of physical or nonphysical facilities and or exchange of knowledge and expertise and by contributing effectively to knowledge transfer, networking, information dissemination and collaboration among the undertakings and other organisations in the cluster; Annex I, point 97 research and knowledge-dissemination We welcome this new definition. It is a clear step in the right direction, and we are especially pleased with the introduction of the new term innovation intermediary, which as such then also needs to be defined (see new point below). Point 97 could, however, also benefit from clarifications: 'research and knowledge-dissemination organisation' means an entity (such as universities or research institutes, technology transfer agencies, innovation intermediaries, research-oriented physical or virtual collaborative entities), irrespective of its legal status (organised under public or private law) or way of financing, whose primary goal is to independently conduct (or as for innovation intermediaries, mediate, coordinate, stimulate or otherwise promote such activities) fundamental research, industrial research, or experimental development or feasibility studies, or to widely disseminate the results of such activities by way of teaching, publication or knowledge transfer. ( ). Annex I, new point innovation intermediary In line with the point 97 above, we suggest the following wording of this new definition: innovation intermediary means an entity whose primary goal is to mediate, coordinate, stimulate or otherwise promote aid or 12

13 activities that are exempted from Union state aid rules in accordance with Chapter III, Section 4 of this Regulation, and which not envisage any economic gain to the said entity in question. 13