C-143/99

ADRIA-WIEN PIPELINE AND WIETERSDORFER & PEGGAUER ZEMENTWERKE

OPINION OF ADVOCATE GENERAL MISCHO delivered on 8 May 2001 1

1. Two questions for a preliminary ruling — the Energieabgabenvergiitungsgesetz have been referred to the Court by the (Law on the rebate of energy taxes, Verfassungsgerichtshof (Austria) (Constitu- hereinafter the 'EAVG'). tional Court, hereinafter the 'VGH') con- cerning energy taxes on the consumption of electricity and natural gas and rebates of those taxes.

3. The EAG provides for a tax of EUR 0.00726728 per kWh of electricity consumed. Pursuant to Article 1(1) of the EAG, the following are subject to electricity tax: 2. Under tax reforms within the framework of the Strukturanpassungsgesetz (Structural Adjustment Law) 1996, the Republic of Austria adopted, published and brought into force three laws simultaneously, namely: — the supply of electricity other than electricity supplied to electricity supply undertakings, and

— the Elektrizitätsabgabegesetz (Law on the tax on electricity, hereinafter the 'EAG'); — the consumption of electricity by elec- tricity supply undertakings and the consumption of electricity produced by the consumer himself, or imported into the territory covered by the tax.

— the Erdgasabgabegesetz (Law on the tax on natural gas, hereinafter the 'EGAG');

7. However, pursuant to Article 2(1) of the EAVG, the provision at the centre of the dispute in the main proceedings, only undertakings whose activity is shown to consist primarily in the manufacture of 10. Article 93(3) of the Treaty provides: goods are entitled to a rebate of energy taxes.

'The Commission shall be informed, in sufficient time to enable it to submit its comments, of any plans to grant or alter 8. The main proceedings raise for the VGH aid. If it considers that any such plan is not the question whether the provisions of the compatible with the common market hav- EAVG constitute State aid within the ing regard to Article 92, it shall without

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delay initiate the procedure provided for in less of whether their activity is shown paragraph 2. The Member State concerned to consist primarily in the manufacture shall not put its proposed measures into of goods?' effect until this procedure has resulted in a final decision'.

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the authority would not have committed relating to national provisions providing any manifest infringement of Community for energy tax rebates and asks whether provisions relating to State aid. The VGH such reimbursement constitutes aid within itself, as may be inferred from the grounds the meaning of Article 92 of the Treaty. of the order for reference, has some doubts in that respect.

20. It should be noted that Adria-Wien Pipeline GmbH (hereinafter 'Adria-Wien'), 16. However, I am of the opinion that the the appellant in the main proceedings, also above argument is not one to cause the presents its case in such a way that it could Court to conclude that it should not reply be concluded that the questions referred are to the questions referred to it. not necessary.

17. The Court has consistently held that it is for national courts before which the 21. It contends that rebate of the taxes at dispute has been brought to determine both issue is not a State aid, but that to limit the need for a preliminary ruling in order to such reimbursement to certain undertak- enable them to deliver a ruling and the ings is incompatible with the Austrian relevance of the questions they submit to constitution. However, the VGH could the Court. remedy that breach of the constitution without recourse to Community law.

18. The Court cannot reject a question referred by a national court unless it is 22. It adds that, if the rebate mechanism quite obvious that the interpretation of had to be regarded as an aid, that could Community law sought by that court bears only be because of its selective nature, no relation to the facts or the subject of the which the VGH ought to alter in any case main action. 2 because of the requirements of the Austrian constitution.

27. I consider that, in such a case, the scheme in question would have the effect of imposing on every undertaking established in Austria a tax amounting to 0.35% of net production value. 31.1 therefore conclude that a legislative measure whereby, on mere application, a rebate of taxes on electricity and natural gas is granted to all undertakings, provided

28. There is not, as far as I am aware, any 3 — Community law has introduced limits on the autonomy of provision of Community law which prohi- Member States in respect of indirect taxes on capital accumulations, excises and VAT, hut these are not in bits Member States from imposing a new question here.

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that those taxes have exceeded a total of A — Does the scheme at issue amount to a 0.35% of the undertaking's net production derogation from the standard application value in the course of a calendar year, of a general system? should not be regarded as a State aid within the meaning of Article 92 of the Treaty.

35. In support of its argument, the Com- mission refers to the judgment in Italy v Commission 4 which states that 'a measure whereby the pubic authorities grant to As regards the first question certain undertakings a tax exemption which, although not involving a transfer of state resources, places the persons to whom the exemption applies in a more favourable financial position than other 32. The first question asks, in essence, taxpayers constitutes State aid within the whether a rebate granted only to under- meaning of Article 92(1) of the Treaty'. takings whose activity is shown to consist primarily in the manufacture of goods is to be regarded as State aid within the meaning of Article 92(1) of the Treaty.

40. But is the situation in the present case 38. However, the importance of that judg- identical? ment does not lie in that statement, which can essentially be explained by the circum- stances of the case, but in paragraph 15 where the Court stated 'the Court has consistently held that the concept of aid embraces not only positive benefits, such as 41. I do not think so, as it is extremely subsidies, but also measures which, in doubtful that in the present case there is a derogation from a 'normal rule'. various forms, mitigate the charges which are normally included in 5 the budget of an undertaking and which, therefore, without being subsidies in the strict sense of the word, are similar in character and have the same effect (Case 30/59 De Gezamenlijke 42. From the overall context in which that Steenkolenmijnen iti Limburg v High legislation was introduced I rather take the Authority [1961] ECR I, 19, and Case view that we are dealing here with a new C-200/97 Ecotrade v AFS [1998] general system of ecology taxes which from ECR I-7907, paragraph 34)'. the moment of its conception was based on the principle that the primary and second- ary sectors of the national economy could not reasonably be taxed proportionately to the whole of their electricity and gas consumption.

39. Moreover, the Court used substantially identical wording in Italy v Commission 6 concerning the exemption granted to employers in the Italian textile industry from the financial charges arising from the 43. In that respect, I agree in particular normal application of the general social with the following observations of the security system, and in Belgium v Commis- Danish Government: sion (the 'Maribel bis/ter scheme') ('Mar- ibel bis/ter') 7 concerning an 'increased

That is to say, in other words, that the general system of taxation is the "normal legal situation" so that the rebate rules 46. In that respect, it relies essentially on cannot be regarded as an "exception"8 to Maribel bis/ter cited above. It contends that the general scheme of the system, which is the reduction in social security contribu- one of the reasons why the system is said to tions referred to in that case benefited have lost its general character... . numerous sectors, namely the extraction of non-energy products, the chemical industry, the metallurgy and metalwork industries, the manufacture of precision and optical instruments and other proces- sing industries, numerous international transport sectors including air and sea transport, horticulture, silviculture and the forestry industry. Accordingly, the Com- The credit scheme merely "corrects" the mission states that 'since this programme payment of a tax about which there has was also directed at undertakings in the tertiary sector, the Commission considers that it involved a part of the economy just 8 — Original emphasis. as important as that covered by the EAVG'.

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47. The Commission then cites para- important point in my opinion is that the graph 32 of that judgment as follows: treatment reserved for the primary and secondary sectors does not constitute a derogation from the normal application of a general system.

'Neither the high number of benefiting undertakings nor the diversity and impor- tance of the industrial sectors to which 50. The objection may perhaps be raised those undertakings belong warrant the that, by accepting that argument, the doors conclusion that the Maribel bis/ter scheme are opened wide to all kinds of abuse. constitutes a general measure of economic Consequently, tomorrow, a Member State policy, as the Belgian Government claims'. could raise the general level of its social charges with impunity and increase them even more in the services sector.

framework for the taxation of energy two preceding subparagraphs shall not be products' 1 1based on Article 99 of the EC less than 1% of the value of its sales'. Treaty (now Article 93 EC), not yet adopted by the Council, the Commission itself considered that '... Member States should be authorised to grant tax refunds to firms incurring investment expenditure aimed at improving energy efficiency and those whose energy costs represent a sub- stantial proportion of the value of their 55. Even if the Commission, in that pro- sales'. posal, does not accept that a scheme such as that implemented by Austria does not constitute aid, it nevertheless accepts that an ecology tax does not necessarily have to be applied at the same rate to all under- 54. Accordingly, the Commission proposed takings and that the method of a rebate of an Article 15(2) in the following terms: tax paid at the first stage is admissible as such.

'Member States may refund some or all of the amount of tax paid by a firm on any part of its non-transport-related energy costs which exceeds 10% of its total production costs. 56. It is true that the criterion adopted by the Commission in its proposal has the advantage of applying directly to the energy consumption of each individual undertaking and not solely to undertakings that manufacture goods. Accordingly, it However, when the part of non-transport- can cover undertakings in the service sector related energy costs of a firm exceeds 20% which could also, albeit in rather rare cases, of its total production costs, Member States be major energy consumers. However, that shall reimburse the whole of the tax paid by does not mean that that is the only the firm on the part of its non-transport- acceptable criterion. related costs which exceeds 10% of its total production costs.

60. That principle seems already to have been referred to in the main proceedings and it is obviously for the national court to deliver a ruling in that respect. 63. Accordingly, it is difficult to fault the claim of the Austrian Government and Adria-Wien that the procedure involving the payment of taxes to the supplier of electricity or gas, who pays them to the State, and the subsequent 'rebate' by the State, is only an administrative mechanism intended to avoid more complicated meth- 61. Nevertheless, in my opinion, the Aus- ods. Moreover, according to the explana- trian scheme has not created a derogation tions given by Adria-Wien, suppliers are from the 'normal system' of taxation which obliged by law to note separately in each favours certain undertakings or certain invoice the delivery price and the amount goods and therefore does not constitute of the ecology tax.

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64. Since I am able to conclude, in light of ings established in different Member the above, that this is not an aid scheme States'. within the meaning of Article 92(1) of the Treaty, I will now examine, merely in the alternative, whether the scheme in question affects trade between Member States and is likely to distort competition. 61. As regards the reduction of the social charges introduced by Italy, the Court held that 'it is necessary to start from the competitive situation existing in the com- mon market before the contested measure was taken'. 14It is therefore a question of B — Is trade between Member States examining whether the production costs of affected and competition distorted? the undertaking or undertakings concerned in the Member State where the measure has been introduced are lower as a result. 15

70. The situation is therefore not at all the the two taxes than undertakings manufac- same as that referred to by the Court in turing goods, the competitiveness of the paragraph 47 of its judgment in Maribel latter is reduced even further in so far as bis/ter, cited above, where it held that they have recourse, in their manufacturing, 'where a Member State grants aid to an transport or sales procedures, to services undertaking, domestic production may for performed by undertakings in the tertiary that reason be maintained or increased, sector. with the result that the undertakings estab- lished in other Member States have less chance of exporting their products to the market in that Member State'. However, that is the passage the Commission cites in its attempt to show that trade and cross- border competition are affected. 74. Consequently, the mineral oils piped by Adria-Wien and used by manufacturers of goods have become more expensive as a result of the electricity tax which affects the pumping of those oils. Likewise, the costs 71. In its judgment of 19 May 1999 in of insurance companies and undertakings Case C-6/97 Italy v Commission, cited carrying out machine and building main- above, concerning Italian road hauliers tenance or repair work have increased. the Court held that 'it therefore falls to be considered whether the tax credit has adverse effects on the recipients' competi- tors, namely road hauliers established in other Member States' (paragraph 21).

75. Finally, the Austrian Government can- not be criticised for introducing partial reimbursement so as to avoid, as Austria itself points out, overburdening manufac- 72. However, in the present case, the fact turing sector undertakings and thereby that the new tax on Austrian undertakings excessively restricting their competitive- manufacturing goods only amounts to ness. 16 0.35% of net production, whereas it would be higher if that ceiling did not exist, does not entail any negative effects for similar undertakings established in other Member States.

— giving the concept of effect a comple- tely new scope in the sense that the Court would cease to compare the situation of the undertakings con- 78. Third, I cannot accept the argument cerned with their own prior situation that a higher tax on undertakings in the (whether or not charges have been tertiary sector creates an 'inverse' advan- reduced) or with their foreign compe- tage for undertakings in the primary and titors (whether or not competitiveness secondary sectors, as those undertakings has been increased) and compare them are not in competition. (Taxing dental only with undertakings established in surgeons at a higher rate does not provide the same Member State with which any advantage for bicycle manufacturers). they are not in competition. Moreover, a large proportion of undertak- ings in the tertiary sector are also exposed to international competition. That is the case for insurance companies that provide services outside their national territory, air or road transport undertakings and, above all, the hotel sector. Has the Court not held 80. I point out once more that all passages from the Court's case-law cited in the course of the present procedure in support 17 — See Case 173/73, cited above, footnote 6, paragraph 13 and Case C-75/97, cited above, footnote 7, paragraph 25. of the contrary view concerned situations in

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which, by way of derogation from a general 81. I therefore share the opinion of the scheme that was indisputably a 'standard Austrian, Danish and Finnish Governments scheme', tax reductions, tax credits or and Adria-Wien that, in the present case, reductions in social charges were granted intra-Community trade is not affected and to mitigate the charges previously imposed competition is not distorted. Since the on certain undertakings and which undeni- intended aim of Article 92(1) is not called ably distorted competition in intra-Com- in question, there is therefore no aid within munity trade. the meaning of that article.