State aid and allocation of limited authorizations and grants. Overview of the cases

Abstract

The granting of free allowances by the Member State under Directive 2003/87/EC may involve a transfer of State resources for the reason that in such cases the State itself foregoes revenues that it could earn, were it to auction them. Free of charge allocation of emission allowances in the context of the general rule of auctioning of allowances from 2013, has to be regarded as an economic advantage, which the recipient undertaking would not have obtained under normal market conditions. If free allocation of allowances constitutes State aid in the meaning of Article 107 (1) of the TFEU, it will be incompatible with the internal market as a general rule and therefore prohibited. The Commission practice and Decisions of the Court of Justice considers that Article 107 (3)(c) of the TFEU is the only basis for the consideration of free of charge emission allowances as being compatible with the internal market. Moreover, we have to take into account if state aid might be covered by the scheme of general rules of assessment established in the Environmental Guidelines of 2008 and if so, under what conditions.