AG Biondi considers national authorities cannot depart from Commission methodology when recovering unlawful State aid
In case C-424/25, Overgaard Gods, AG Biondi considered whether general principles of EU law, including proportionality, allow national authorities to depart from the calculation method prescribed by the Commission when determining the amount of unlawful and incompatible State aid to be recovered.
The case concerns a Danish groundwater extraction tax. Owners of private extraction facilities paid tax on one third of their permitted volume. Where a permit exceeded 25,000 m3, the tax was capped at one third of the amount due on the permitted volume. In 2017, the Commission found that a ceiling limiting the taxable volume to a third of the amount due on 25,000 m³ applicable to certain private water extraction permits constituted unlawful and incompatible State aid (SA.32874). The Commission ordered recovery considering the aid as the difference between the tax due on the permitted extraction volume and the amount actually paid.
Overgaard Gods, which held a permit for 3 million m³, but used only 5% of that amount, was ordered to repay DKK 922,250 plus interest. It argued that recovery should instead be based on the much lower volume of water actually extracted and invoked general principles of EU law, such as proportionality, legal certainty and legitimate expectations.
The AG considered that national authorities and courts must apply the recovery methodology laid down by the Commission and cannot replace it with another method based on the beneficiary’s individual circumstances. While the situation of each beneficiary must be assessed when quantifying recovery, this does not allow national authorities to depart from the Commission’s binding findings or calculation method.
He further stressed that recovery concerns the advantage conferred by the aid, not the economic benefit actually obtained from exploiting that advantage. Accordingly, the fact that Overgaard Gods used only 5% of the permitted water volume did not justify calculating recovery on the basis of actual consumption.
For more information, see the AG’s Opinion.