• 26 September 2024
• Press Releases

Exemption from network charges in Germany: Court of Justice confirms Commission findings and upholds 2021 GC judgment

Today, the Court of Justice delivered its judgment in four sets of joined cases: (i) joined cases C-790/21 P, Covestro Deutschland v Commission and C-791/21 P, Germany v Covestro Deutschland and Commission; (ii) joined cases C-792/21 P, AZ v Commission and C-793/21 P, Germany v AZ and Commission; (iii) joined cases C-794/21 P, Germany v Infineon Technologies Dresden and Others and C-800/21 P, Infineon Technologies and Infineon Technologies Dresden v Commission; (iv) joined cases C-795/21 P, WEPA Hygieneprodukte and WEPA Deutschland v Commission and C-796/21 P, Germany v WEPA Hygieneprodukte and Others.

The judgments confirm the Commission’s decision finding that a German scheme (SA.34045 (2013/C) (ex 2012/NN)) for the exemption of stable baseload electricity consumers from network charges between 2011 and 2013 involved the use of State resources and thus constituted State aid, which the Commission had found to be incompatible with the internal market requesting recovery.

Numerous claimants brought actions before the court seeking annulment of the Commission’s decision. The General Court dismissed the actions for annulment in its entirety (see, e.g., the GC’s judgment of 6 October 2021, T-233/19 – Infineon Technologies Dresden v Commission, not available in English).

The claimants in the first instance lodged an appeal against this judgment on the ground that the General Court infringed Article 107(1) TFEU since it applied an incorrect legal test to determine whether the amounts resulting from the surcharge at issue have their origin in ‘State resources’ within the meaning of Article 107(1) TFEU.

In its assessment, the Court confirms its settled case-law that two criteria must be met in order to establish that the means by which a tariff advantage is granted under national law constitute ‘State resources’ within the meaning of Article 107(1) TFEU :

• the funds must be financed by a charge or other compulsory surcharges under national legislation and managed and apportioned in accordance with that legislation;
• the sums must constantly remain under public control, and therefore available to the competent national authorities.

The Court of Justice has confirmed the finding of the General Court that the levy at issue was a parafiscal or compulsory levy involving the use of ‘State resources’.