C-207/01

OPINION OF MR JACOBS — CASE C-207/01

O P I N I O N O F ADVOCATE GENERAL JACOBS delivered on 13 March 2003 1

Introduction and Council Recommendation 81/924/EEC of 27 October 1981 on electricity tariff structures in the Community. 3

1. This reference from the Corte d'Appello di Firenze raises the issue whether Member States are precluded by Community law from imposing surcharges on the supply of The legal framework electricity to an undertaking for use as a raw material in an electro-chemical process to produce caustic soda and caustic potash. The surcharges are intended in particular to offset the costs of abandoning and recon- verting nuclear-powered electricity gener- ating stations and of building plants gener- The national provisions ating electricity from renewable sources of energy.

Legislative Decree No 98 of 26 January 6. Law No 9 of 9 January 1991 ('Law 1948 6 provided for a fine of three times the 9/91'), 10 which implemented a new surcharge due in case of default of pay- national energy plan, provided that the ment. Further, the surcharges and fines thermic surcharge special supplement was were to be enforced by the fiscal adminis- to be permanent and that the revenue tration in accordance with the procedures therefrom was to be used to contribute to for the enforcement of State taxes. the costs of ENEL and of the construction undertakings concerned following the decision to close nuclear power stations ('sovrapprezzo per onere nucleare' or 'sur- charge for nuclear charges') and to com- pensate the State for the lower revenue resulting from the application of Law 9/91. Article 22 of Law 9/91 provided for 4. On the basis of those provisions, in 1974 measures to develop the production of the CIP introduced the 'sovrapprezzo ter- electricity from sources of renewable mico' ('thermic surcharge'), 7 aimed at energy. Pursuant to that provision, on 'compensating the higher cost of fuel used 29 April 1992 the CIP adopted the 'sovrap- in the thermo-electric centres' after the prezzo per nuovi impianti da fonti rinno- petroleum crisis of the beginning of the 1970s, and established the Cassa Conguag- vabili e assimilate' ('surcharge for new lio per il Settore Elettrico ('Compensation plants using renewable and other similar fund for the electricity sector') into which sources', or 'surcharge for new plants') those surcharges, which were levied by the aimed at financing aid to those undertak- undertakings distributing electricity, were ings producing electricity from sources of paid. renewable energy or other similar sources. 11

' 1 . This Directive shall apply at Commu- nity level to the following products as 9. Article 81(1) and Article 82 EC respect- defined in the relevant Directives: ively prohibit agreements and concerted practices between undertakings and abuses of dominant positions which distort com- petition within the common market. Both provisions refer inter alia to conduct which makes the conclusion of contracts subject — mineral oils; to the acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts. 13 — alcohol and alcoholic beverages,

10. Directive 92/12 14 lays down general provisions for products subject to excise — manufactured tobacco. duty and the holding, movement and monitoring of such products. In particular, the third recital to the Directive reads: 'whereas the concept of products subject to excise duty should be defined; whereas only 2. The products listed in paragraph 1 may be subject to other indirect taxes for 12 — GURI of 30 June 1997, No 150. 13 — Article 81(1 )(e) and Article 82(d) EC respectively. specific purposes, provided that those taxes 14 — Cited in note 2" comply with the tax rules applicable for

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excise duty and VAT purposes as far as the 92/82ÆEC shall be subject to excise duty if determination of the tax base, calculation intended for use, offered for sale or used as of the tax, chargeability and monitoring of heating fuel or motor fuel.... the tax are concerned.

3. In addition to the taxable products, 3. Member States shall retain the right to listed in paragraph 1, any product intended introduce or maintain taxes which are for use, offered for sale or used as motor levied on products other than those listed fuel, or as an additive or extender in motor in paragraph 1 provided, however, that fuels, shall be taxed as motor fuel. Any those taxes do not give rise to border- other hydrocarbon, except for coal, lignite, crossing formalities in trade between peat or other similar solid hydrocarbons or Member States....' natural gas, intended for use, offered for sale or used for heating purposes shall be taxed at the rate for the equivalent mineral oil.'

'mineral oils [that are] injected into blast chemical process. According to the Corte furnaces for the purposes of chemical d'Appello di Firenze ('Corte d'Appello'), reduction as an addition to the coke used 'this is... an energy-consuming industry in as the principal fuel'. which electric power is used as "power for the industrial process" and so constitutes a real and genuine raw material which forms part of the production process, since it is incorporated into the end product into which it flows, and from which it cannot be distinguished, and it is in consequence 16. Article 2 of Directive 92/82, 16 which an essential factor, for which there is no provides for the approximation of the rates substitute, in the course of the production of excise duties on mineral oils, lists the process, given that no electro-chemical mineral oils covered by it. These are leaded process can take place without electricity'. petrol, unleaded petrol, gas oil, heavy fuel oil, liquid petroleum gas, methane, kero- sene.

17. Article 1 of Recommendation 81/924 17 on electricity tariff structures provides inter alia that 'electricity tariff structures should 19. The question before the Court has been be drawn up and adopted so as to allow the referred in the context of an appeal brought application of a rational price policy and to by Altair Chimica against a decision of the reflect the costs incurred in supplying the Tribunale di Firenze which (i) rejected various categories of consumer'. Altair Chimica's claim that the surcharges for nuclear charges and for new plants were contrary to Community law and that the relevant sums should be reimbursed and (ii) ordered Altair Chimica to pay the interest accrued on those sums as provided for in the electricity supply agreement with ENEL. The main proceedings and the order for reference

21. The Corte d'Appello appears to agree that the provisions of national law at issue are incompatible with Community law. In particular, it observes that there is no The arguments of the parties obvious connection between the surcharges and the subject-matter of the electricity supply contract and that the use of elec- tricity as a raw material should be exempt from taxation. In any event, the Corte d'Appello deems it necessary that the Court of Justice give a ruling determining the precise scope and interpretation of the 24. Altair Chimica maintains that its Community legislation in question. production process requires the continuous use of considerable quantities of electricity; its expenditure on electricity is therefore substantial. At the same time, however, the actual cost to ENEL of supplying electricity to Altair Chimica, as compared with supply to other users, should be lower. Altair 22. By order of 23 January 2001 the Corte Chimica observes that its expenditure on d'Appello therefore made a reference to the electricity amounts to half of its overall Court of Justice for a preliminary ruling on industrial costs and that it pays twice as the interpretation of Articles 81, 82 and 85 much as it would in the other Member EC, Directive 92/12 and Recommendation States. Against that background, Altair 81/924 to ascertain whether the provisions Chimica claims that the imposition of the of national law laid down in Legislative surcharges at issue is contrary to Commu- Decrees No 347 of 1944 and No 896 of nity competition law because it places 1947, Presidential Decree No 373 of 1994, Italian undertakings at a considerable com- Legislative Decree No 98 of 1948 and Law petitive disadvantage compared to those 9/91 are compatible with those provisions from other Member States where similar of Community law. charges are not imposed. The surcharges constitute 'supplementary obligations' under Articles 81(1)(e) and 82(d) EC since they do not bear any relation to the supply of electricity. In that regard, Altair Chimica observes that, at the material time, ENEL had a dominant, even monopolistic, pos- 23. Written submissions were presented by ition in the distribution of electricity. The Altair Chimica, the Italian Government fact that the surcharges are not propor-

27. The Italian Government observes as a 26. ENEL first claims that the order for preliminary point that the order for refer- reference does not contain sufficient infor- ence of the Corte d'Appello is inadmissible mation to establish infringement of as it does not provide sufficient information Articles 81 and 82 EC. The surcharges are concerning the relevant national law and public measures and, as such, they are in the facts. In the alternative, it argues that principle not caught by those provisions. In neither Article 81 nor Article 82 EC is any event, the imposition of a compulsory applicable as the surcharges are imposed by surcharge in pursuance of the public inter- the State. In any event, those surcharges est cannot be considered to be a form of could not be considered to be supplemen- s u p p l e m e n t a r y obligation under tary obligations that have no connection Articles 81(1)(e) and 82(d) EC. In ENEL's with the subject of the contract in issue as view, Altair Chimica's claim in fact con- they concern the production and distribu- cerns the differences between the Italian tion of electricity. Furthermore neither fiscal regime covering electricity and those Directive 92/12 nor Directive 92/81 is in the other Member States; those differ- applicable as they do not apply to elec- ences are allegedly disadvantageous for tricity. In any event, however, those sur- Italian undertakings. In other words, the charges would be covered by the derogá- complaint is that there is no harmonisation in the area. Electricity is not covered by Directives 92/12, 92/81 and 92/82. That is 18 — COM(97) 30 Final, OJ 1997 C 139, p. 14.

28. The Commission shares the view of the Corte d'Appello as to the fiscal nature of the surcharges. Support for that conclusion is found in cases where similar surcharges Admissibility were considered to be fiscal. 19 Articles 81 and 82 EC, which concern conduct attribu- table to undertakings, are not applicable to a fiscal contribution imposed by the State. The Commission thus suggests that the 29. The Italian Government submits that question should be rephrased, omitting any the order for reference is inadmissible reference to Articles 81 and 82 EC and because it does not provide sufficient adding a reference to Directive 92/81. In information concerning the legal context view of the fiscal nature of the surcharges, or the reasons for the referring court's view Recommendation 81/924, which mainly that the question whether the national regards the transparency of electricity tariff provisions at issue are compatible with structures, is also inapplicable. Turning to Community law is material to the outcome Directives 92/12 and 92/81, the Commis- of the main proceedings. At the hearing, sion concludes that they do not apply to ENEL appeared to put forward a similar electricity and that their scope cannot be argument, at least with regard to Articles 81 extended by analogy. The Commission also and 82 EC. points out that the harmonisation of tax- ation on electricity is covered by a proposal for a directive which has not yet been adopted. 20 Finally, although it had sub-

19 — Case 77/76 Cucchi [1977] ECR 987; Case 105/76 Inter- 30. I disagree with that view. I consider zuccheri [1977] ECR 1029; Case C-99/92 Terni and that the information provided by the Corte Italsider [1994] ECR I-541; Case C-100/92 Fonderia [1994] ECR I-561. d'Appello, as supplemented by the infor- 20 — See footnote 18 above. mation included in the written observa-

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36. The conclusion that the surcharges for the common market. Article 82 EC pro- nuclear charges and for new plants are hibits abuse by dominant undertakings. It is fiscal is not undermined by the fact that the thus clear that those provisions apply to the Authority for electricity and gas has inte- conduct of undertakings and do not cover grated those surcharges into the electricity legislative or regulatory measures taken by tariff but left the remaining part of the the Member States. Only exceptionally thermic surcharge special supplement may those provisions be applied in con- (which compensates the lower revenue to junction with Articles 3(1)(g), 10(2) or the Italian State) separate from that tariff. 86(1) EC to preclude Member States from It could thus be argued that that integration adopting or maintaining in force any meas- recognises that only the element that com- ure, even of a legislative or regulatory pensates the lower tax revenue could be nature, which could deprive the compe- classified as a tax. tition rules of their effectiveness. 22 Accord- ing to the settled case-law of the Court, that is the case when a Member State requires or favours the adoption of agreements, decisions or concerted practices contrary to Article 81 or reinforces their effects or deprives its own legislation of its official character by delegating to private traders 37. I am not convinced by that argument. responsibility for taking decisions affecting Important aspects of the surcharges such as the economic sphere. 23 their source, their purpose and, in case of non-payment, the sanction and enforce- ment procedures, all lead to the conclusion that they are indeed of a fiscal nature for the purpose of Community law irrespective of their definition and classification under national law. The inclusion of a surcharge in the electricity tariff does not affect its qualification as a tax under Community law.

undertakings on their own initiative. If enforceable by the fiscal administration in anti-competitive conduct is required of accordance with public procedures pro- undertakings by national legislation or if vided for taxes. the latter creates a legal framework which itself eliminates any possibility of competi- tive activity on their part, Articles [81 and 82] do not apply. In such a situation, the restriction of competition is not attribu- table, as those provisions implicitly require, to the autonomous conduct of the under- 42. Altair Chimica has also argued that, in takings'. 2 5 the present case, the competition rules are infringed because payment of the sur- charges places it at a competitive disadvan- tage as compared to its competitors in the other Member States where there are allegedly no similar charges. It is however clear that competitive disadvantages (and advantages) attributable to differences in indirect taxation in the Member States are regulated not under Articles 81 and 82 EC 40. Tax measures are a typical form of but, should it be deemed necessary, by public intervention in the economy, being appropriate harmonisation measures taken imposed by governments only. They are at the Community level such as the direc- therefore exclusively attributable to the tives on excise duties. State and cannot, from any perspective, be considered to be the conduct of private undertakings. Accordingly, taxes cannot constitute one of the 'supplementary obli- gations' under Articles 81(1)(e) and 82(d) EC. 43. The surcharges at issue cannot there- fore be caught by the competition rules regulating the conduct of undertakings.

48. However, I do not consider it necessary for the Court to analyse that issue on the ground that Directives 92/12, 92/81 and 92/82 manifestly do not apply to the surcharges since electricity is beyond their 46. That conclusion is not affected by scope ratione materiae. Moreover, even the Article 2(2) and (3) of Directive 92/81. In provisions which, in the submission of no circumstance can electricity be regarded Altair Chimica, allegedly embody that as a 'mineral oil', as a 'hydrocarbon', or as principle in fact support the view that the 'any product intended for use, offered for directives do not apply. Thus the first part sale or used as motor fuel, or as an additive of Article 4(3) of Directive 92/81 provides or extender in motor fuels'. 26 that 'the consumption of mineral oils within the curtilage of an establishment producing mineral oils shall not be con- sidered a chargeable event giving rise to excise duty as long as the consumption is for the purpose of such production'. 27 For its part Article 8(1)(d) refers to 'mineral oils injected into blast furnaces for the purposes of chemical reduction as an addition to the 47. Altair Chimica further argues that coke used as the principal fuel'. 28 Directives 92/12 and 92/81 embody a

27 — Emphasis added. 26 — Emphasis added. 28 — Emphasis added.

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49. It is clear beyond any doubt that 51. Since electricity is not included in the neither of those provisions is applicable to category of mineral oils and cannot be the instant case for the simple reason that assimilated to them, the argument put they concern the consumption, production forward by the Italian Government con- and use of mineral oils and, as has been cerning Article 3(2) of Directive 92/12 is explained above, even on a broad inter- not relevant. That provision permits the pretation of the scope ratione materiae of Member States to impose other indirect the directives at issue, electricity cannot fall taxes for specific purposes on the 'products within the category of mineral oils. listed in paragraph 1' which, as has been shown, do not include electricity.

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Community policies require minimum though, as is expressly provided under the levels of taxation to be laid down at fifth paragraph of Article 249 EC, 'recom- Community level for all energy products, mendations... shall have no binding force'. including electricity'. 32 Recommendations cannot create rights upon which individuals may rely before national courts. 34

54. The most interesting provisions, how- ever, are Article 2 and Article 13(1)(a). The former provides a definition of 'energy products' within the context of the pro- posed directive, which in its second para- graph expressly includes electricity within that category. The latter states that 'Member States shall also exempt electric- 56. The parties have not adduced any ity used principally for the purposes of argument to suggest that, despite its form chemical reduction, and in metallurgical and in view of its content, Recommen- and electrolytic processes'. According to dation 81/924 is intended to produce ENEL and the Commission, that provision binding legal effects and hence should not would expressly introduce an exemption be considered to be a recommendation. On from taxation of electricity when it is used the contrary, even Altair Chimica appears in production processes such as those in the to agree that that act is not binding. present case.

Recommendation 81/924

57. Admittedly the Court has also stressed that the fact that recommendations do not have binding force cannot be regarded as meaning that they have no legal effect whatsoever. Indeed 'national courts are 55. It is established 33 that national courts bound to take recommendations into con- may make references to the Court on the sideration in order to decide disputes sub- interpretation of a recommendation even mitted to them, in particular where they cast light on the interpretation of national 32 — Emphasis added. 33 — Case C-322/88 Grimaldi [1989] ECR 4407, paragraphs 8 and 9 of the judgment. 34 — Ibid., paragraph 16 of the judgment.

60. In any event, however, whatever the correct interpretation of Recommendation 81/924, I cannot see how a Recommen- 59. I would however observe that, even if dation could preclude the imposition of Recommendation 81/924 were regarded as surcharges such as those at issue given its applicable, it does not seem to assist on the inherently limited legal effects.

35 — ibid, paragraph 18 of the judgment. 36 — Sixth recital. Emphasis added.

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Conclusion

61. For the above reasons, I am therefore of the opinion that the question referred by the Corte d'Appello di Firenze should be answered as follows: