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PR(04)19: EFTA Surveillance Authority adopts two decisions with regard to environmental taxes in Norway


Today the EFTA Surveillance Authority has adopted two decisions regarding State support in the form of derogations from several environmental taxes in Norway.

The first decision is the final decision on an investigation, that the Authority opened in July 2002, following its adoption of new Environmental Guidelines in relation to State aid measures in 2001. The Authority’s investigation concerned exemptions from several environmental taxes: the tax on electricity consumption, the CO2 tax as well as the abolishment of the SO2 tax from 1 January 2004. The second decision deals with the new electricity tax in Norway which will come into effect as of 1 July 2004.

The first decision stipulates the following:

-                The tax exemption from the tax on electricity for the manufacturing and mining industries as well as for undertakings located in Finnmark and seven municipalities in North Troms amounts to incompatible State aid which has to be recovered from the undertakings. The tax rate to be applied in the recovery should equal at least the minimum rate of 0.5 Euro per MWh as laid down in the Community Energy Tax Directive 2003/96/EC. Taxes should be recovered to the State for the period from 6 February 2003 until 31 December 2003. The Authority’s decision to open its investigation in the case was published in the Official Journal of the European Union and the EEA Supplement on 6 February 2003. As of 1 January 2004 the previous electricity tax system in Norway was abolished. Norway has two months to inform the Authority about the measures taken to comply with the Authority’s decision.

-                 No recovery is required with regard to the tax exemption from the CO2 tax on coal and coke used for energy purposes in the cement and leca industry, neither for the reduced CO2tax on mineral oils for the paper and pulp industry. Both derogations concerned sectoral exemptions which were classified as State aid. However, the derogation for the cement and leca industry ended in 2002, i.e. before the date of recovery of 6 Februay 2003. The reduced rate in favour of the paper and pulp industry, which is applied until end 2004, was considered to be compatible with the State aid rules.

-            The exemption from the CO2 tax for coal and coke used as raw material and reducing agents, was not considered to be State aid, since these exemptions were a consequence of the inherent aim of the tax system. Neither was the abolishment of the SO2 tax on the use of coal and coke and on emission from oil refineries found to be State aid.

In its second decision of today, the Authority deals with tax derogations from the new electricity tax for undertakings for certain industries and regions, that is forseen to come into effect on 1 July 2004. These derogations were notified to the Authority by Norway in April 2004. The Authority has decided not to raise objections against the proposed tax derogations.

Firstly, the Authority noted that the full tax exemption from the electricity tax explicitly specified for the use of electricity in chemical reduction, electrolytic processes as well as in mineralogical and metallurgical processes, is justified by the new Norwegian electricity tax system as now notified, and thus does not constitute State aid within the meaning of Article 61 (1) of the EEA Agreement.

Secondly, reduced rates (i.e. 0,0045 NOK/kWh instead of 0,0967 NOK/kWh) for the manufacturing, mining and quarrying industries, and so-called social works activities, where they engage in similar kind of production, as well as the steam and hot water supply, were found to be compatible with the State aid rules. The derogation covers a ten year period up to 2014. Likewise, reduced rates notified for all undertakings in   Finnmark and North Troms for a period until end 2006, were declared compatible.

For further information, please contact Mr Amund Utne, Director Competition and State aid tel.: (+32)(0)2 286 18 50 or Ms. Annette Kliemann, Officer Competition and State aid tel.: (+32)(0)2 286 18 80.




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