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PR(94)35: EFTA Surveillance Authority approves aid to Imatra Steel Oy AB in Finland

18.10.2002

The EFTA Surveillance Authority today authorised aid to be given in support of investments of Imatra Steel Oy Ab which the company must make for environmental protection purposes in order to bring the Imatra steel plant into line with statutory environmental standards.

The Imatra steel plant was established in 1927. The main activities of the plant involve the production of steel whereby the principal raw material used is ferrous scrap. The main products of the plant are low-alloy engineering steel in round, square and flat bars. The capacity of the plant is 220,000 tons of rolled products.

The investment project of the Imatra steel plant includes the modernisation of the whole smelting process as well as the recovery and filtering of flue gases. The overall cost of the investment project is estimated at FIM 150 million. The cost of the environmental investments, which are eligible for State aid, amount to FIM 71 million. The aid is to be awarded in the form of a grant. The maximum total amount of aid proposed by the Finnish authorities in support of the project is FIM 5,3 million which constitutes 7,5 % gross of the eligible costs. The capacity of the plant shall remain unchanged.

As the products of the company fall under those covered by Protocol 14 of the EEA Agreement, the aid was assessed by the Authority under the Community Steel Aid Code (Commission Decision No. 3855/91/ECSC). Article 3(1) of the Code provides that aid granted to steel undertakings for bringing into line with new statutory environmental standards plants which entered into service at least two years before the introduction of the standards may be deemed compatible with the functioning of the EEA Agreement. Article 3(2) of the Code stipulates that the total amount of aid granted for this purpose may not exceed 15 % net grant equivalent of the investment costs directly related to the environmental measures concerned.

The aid measure notified by the Finnish authorities is in line with the Steel Aid Code as the purpose of the aid is to ensure compliance of the existing Imatra steel plant "with new mandatory environmental standards. Moreover, the total amount of aid remains below the ceiling of the investments directly related to the environmental measures concerned.

For further information please contact Maria Blassar (State Aid & Monopolies Directorate) on tel. 22 66 853.




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