Commission decides that State aid in favour of Dutch manure processing companies is not compatible with the EC Treaty

The European Commission has decided that the unnotified State aid amounting to 2.5 million Euros implemented by the Netherlands for investment into six manure processing projects is incompatible with the common market. The Netherlands shall take all necessary measures to recover the aid unlawfully made available to the beneficiaries.

Since 1994 various complaints drew the Commission's attention to cases of aid granted to manure processing projects in the Netherlands under the aid scheme "Bijdrageregeling Proefprojecten Mestverwerking" ("BPM-scheme"). This scheme had been approved by the Commission for the period 1989-1994. The complainants alleged that aid had been awarded after that date.

The aid to the six manure processing companies amounted to € 2.5 million. It was granted in 1995 and consisted of investment aid of up to 35 % of the overall cost to stimulate the creation and maintenance of outlets for the manure surplus in the Netherlands.

The aid was not covered by an approved aid scheme since the "BPM-scheme" expired in 1994. Therefore, it required individual notification. The Dutch authorities failed to comply with this notification obligation.

Accordingly, the ad-hoc aid was scrutinised on the grounds that it was designed in the first place to sustain the installation of pilot manure processing facilities to provide for an environmentally sound disposal of manure surplus as foreseen in the Dutch laws restricting the manure production since 1987 and in the Council's "Nitrate Directive".

Pursuant to the Community guidelines on State aid for environmental protection, investment to comply with mandatory standards may be granted only to already existing plants or if it allows for significantly higher levels of environmental protection to be attained than those required by mandatory standards, with a maximum aid intensity of 15%. Moreover, the environmental obligations deriving from the "Nitrate Directive" are imposed on the farmers in order to restrict the production of manure, whereas the beneficiaries of the aid at stake are not addressee of this obligation.

Finally, operating aid may be implemented exceptionally, if it is temporary and degressive. It turned out that the manure processing factories are dependent on continuous aid to sustain the maintenance of the production.

Therefore, the Commission concluded that the environmental aid guidelines do not apply.

The aid is also incompatible with the SME-guidelines as far as the awarded aid intensity exceeded the ceilings set out there. No evidence was provided that the companies at stake fulfil the SME criteria.