In our previous bulletin, we mentioned the recent extension of the scope of the General Block Exemption Regulation7 to State aid to ports and airports.
In order to understand the importance of said reform, it is necessary to make a brief digression on the rationale of the General Block Exemption Regulation.
As is well known, the general rule on State aid laid down in Articles 107 and 108 of the Treaty on the Functioning of the European Union (hereinafter, the “TFEU”), provides for: (i) the incompatibility with European Union rules of any State aid which alters or distorts trade between Member States; (ii) the need for a prior communication by the Member State to the European Commission of projects aimed at granting or altering any State aid.
Article 109 TFEU8, anyhow, allows the EU Council to determine the categories of aid considered compatible with the EU rules and, thus, exempt from the obligation of notice provided for in Article 108 TFEU.
By means of (EC) Regulation No. 800/2008 and then of (EU) Regulation No. 651/2014, the EU already introduced the exemption from the obligation of notice for certain categories of State aid provided that specific conditions were met.
Regulation (EU) No. 1084/2017 (hereinafter "the Regulation") provided for the extension of the scope of Regulation (EU) No. 651/2014, thus allowing certain State aid in port and airport sectorsto benefit from said exemption9.
With regard to maritime and inland ports, to date State aid meeting the requirements listed below may be considered to be compatible with the internal market pursuant to Article 107 (3) TFEU:
- aid regarding costs, including planning costs, of investments for the construction, replacement or upgrade of port infrastructures or access infrastructures;
- aid for dredging;
- aid not concerning non-transport activities, including industrial production facilities active in a port, offices or shops, and not concerning port superstructures.
Only a specific percentage of investment costs can be subject to State aid (depending on the size and nature of the investment and whether the port is in a remote region).
The Regulation also expressly provides that "any concession or other entrustment to a third party to construct, upgrade, operate or rent aided port infrastructure shall be assigned on a competitive, transparent, non-discriminatory and unconditional basis"10. As regards airports, State aids granted for investment and operation of airports that meet the following conditions are compatible with the internal market within the meaning of Article 107 (3)of the Treaty and are exempt from the obligation of notice under Article 108 (3) TFUE:
- The airport must be accessible to all potential users. In the case of physical limitations of capacity, the allocation must take place on the basis of pertinent, objective, transparent and non-discriminatory criteria.
- The aid is not granted for the relocation of existing airports or for the creation of a new passenger airport.
- The investment does not exceed what is necessary to accommodate the medium-term expected traffic on the basis of reasonable traffic forecasts11.
- The investment aid is not granted to an airport located within 100 kilometres or 60 minutes travelling time by car, bus, train or high-speed train from an existing airport from which scheduled air services are operated1213
- The investment aid is not granted to airports with average annual passenger traffic of more than three million passengers during the two financial years preceding the year in which aid is actually granted. The investment aid is not expected to result in the airport increasing its average annual traffic to above three million passengers within two financial years following the granting of the aid.
- The aid is not granted to airports with average annual freight traffic of more than 200,000 tonnes during the two financial years preceding the year in which aid is actually granted. The aid is not expected to result in the airport increasing its average annual freight traffic to above 200,000 tonnes within two financial years following the granting of the aid.
- Operating aid is not granted to airports with average annual passenger traffic of more than 200,000 passengers during the two financial years preceding the year in which aid is actually granted.
- The amount of operating aid does not exceed what is necessary to cover the operating losses and a reasonable profit over the relevant period. The aid is granted either in the
- form of periodic instalments determined ex ante, which shall not be increased during the period for which the aid is granted, or in the form of amounts defined ex post based on the observed operating losses.
The investment aid amount provided for airport infrastructures should not exceed certain thresholds provided for in Article 56a of the Regulation. In conclusion, the Regulation establishes a significant increase in the eligible thresholds for State aid for certain categories (as well as the conditions for benefiting from the exemption).
It also seeks to reduce the administrative burden on national and local authorities and to encourage EU State members to address aid in order to reach an economic growth, though, without granting to the recipients unfair competitive advantages.
As in the past, even after the entry into force of this Regulation, the Commission will have to carry out an ex post verification to see if it will be possible to extend the exemption to further categories and/or to further increase in thresholds.
This reform will surely be welcomed by professionals, who will now be able to enjoy public investment more easily and, hopefully, more timely.