ESA askes Iceland to comply with EEA rules on state aid in the waste-management sector
Today, the EFTA Surveillance Authority (ESA) has proposed Iceland appropriate measures to ensure that Sorpa, a municipally owned waste-management cooperative, complies with state aid rules. Amongst these measures, ESA proposes the transfer of the economic activities to a limited liability company subject to income tax and the application of the market economy operator principle.
The case was initiated with a confidential complaint alleging that Sorpa’s tax exemption constituted incompatible state aid, as it provided an unfair advantage over competitors.
ESA qualifies the measures as “existing aid” which are no longer compatible with EEA law and must be abolished. Iceland is not required to recover aid granted in the past but must address the issue moving forward.
Iceland has one month to accept these measures, which must be implemented by January 1, 2027. If the measures are rejected, ESA may initiate a formal investigation procedure.
For further information, see ESA’s decision.