CN01 - ECJ holds Greek green electricity producer is not an interested party in State aid challenge

On 7 April 2022, the ECJ upheld the General Court's ruling that Renewable Electricity Producer, Solar Ileias Bompaina, did not qualify as an 'interested party' in its challenge against the new aid scheme introduced by Greece.

Key takeaways

• An 'interested party' within the meaning of Article 1(h) of Regulation 2015/1589 refers to any person, undertaking or association of undertakings whose interests might be affected by the granting of the aid, including competitors of the beneficiary.
• A company which is not a direct competitor of the beneficiary of the aid scheme can qualify as an 'interested party', if its interests could be affected by the grant of the challenged aid.
• Where the adverse effect of the grant of aid on a company's interests may only be potential, a risk of a specific effect on such interest must be demonstrated.

Background

In December 2014, Greece notified to the European Commission its new operating aid scheme in favour of producers of electricity using renewable energy sources (RES Producers). Notably it reduced previously applied feed-in tariffs payable to RES Producers in order to balance the scheme, which was in deficit.

Solar Ileias Bompaina (Solar), a Greek RES Producer, submitted a complaint to the European Commission about the changes. It argued that they involved illegal aid to downstream energy suppliers (Suppliers). The RES Producers (including Solar) would bear the costs of reducing the deficit of the account, whereas the Suppliers (who contributed to the same deficit) did not.

The complaint was dismissed by the Commission. Solar's appeal against that decision before the General Court was rejected as inadmissible by judgment of 3 July 2020 (Case T-143/19). The General Court held that Solar had not established its status as an 'interested party' within the meaning of Article 1(h) of the State aid Procedural Regulation 2015/1589 (Procedural Regulation).

Solar challenged that finding before the ECJ.

Judgment of the ECJ

The ECJ rejected Solar's appeal (Case C-429/20 P).

It recalled that that the notion of 'interested party' within the meaning of Article 1(h) of the Procedural Regulation refers to any person, undertaking or association of undertakings whose interests might be affected by the granting of the aid, including competing undertakings of the beneficiary of such aid. That did not preclude that a company which is not a direct competitor of the beneficiary of the aid scheme being qualified as an 'interested party'. However, it must establish that its interests could be affected by the grant of the aid. 

To do so the undertaking must establish that the aid is likely to have a specific effect on its situation. That specific effect can also be potential, but must be demonstrated to the requisite legal standard.

The ECJ firstly confirmed that the RES Producers and Suppliers were not competitors as they operated at different levels of the Greek electricity market.

As to whether the aid scheme could have had a practical impact on Solar's situation, the ECJ agreed with the General Court that Solar had failed to demonstrate that there is a correlation between the reduced feed-in tariffs and the non-payment of a contribution account by the Suppliers. Moreover, it failed to establish that the challenged scheme could have affected its market position or interests.

In addition, the ECJ found that Solar had not explained how the exemption of Suppliers from the aid scheme could have influenced the setting of the new feed-in tariffs given that they were designed primarily to counterbalance the overcompensation previously granted to the RES Producers. More generally, the question whether another category of economic operators may have contributed to the occurrence of the deficit at the level of aid scheme was considered irrelevant, as was the possibility that RES Producers and Suppliers would be in a comparable situation for the purposes of assessing the status of 'interested party'.

Comment

The ECJ judgment brings valued guidance on the concept of 'interested party' within the meaning of Article 1(h) of the Procedural Regulation, and builds upon its past precedents (see in particular Commission/ Kronopoly and Kronotex, C-83/09 P). 

The possibilities to be considered an 'interested party' may arguably been theoretically widened, to explicitly include non-competitors. However, what is required to establish 'risk of a specific effect'  and the practical possibilities of meeting that test remain unclear. 

With thanks to Maëlle Vannet--Deprugney and Eloise Robson for their contribution.