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State Aid

State Aid: Norway must change the financing of municipal waste collectors

27.2.2013

PR(13)16

The Norwegian authorites must take certain appropriate measures in order to bring the financing of municipal waste collectorsin line with the state aid provisions of the EEA Agreement. This is proposed by the EFTA Surveilance Authority in a decision adopted today.

The Norwegian authorities have until 27 March 2013 to decide whether to accept the measures proposed by the Authority.

In Norway, waste collection services are regulated by the Pollution Control Act. According to the Act the Norwegian municipalities are under the obligation to collect “household waste” within their respective regions. Private operators may not collect household waste without permission from the municipality. The municipalities therefore enjoy a legal monopoly in the field of household waste collection. The municipalities can, however, choose whether they want to tender out the service or take care of the household waste collection.

Today's decision concerns the municipal waste collectors that, in addition to collecting household waste in its own municipality, also engages in economic activities by bidding for household waste contracts in public tenders or proving other services on the market (by for instance, collecting industrial waste).

The Authority has found that the current system of financing of the municipal waste collectors may lead to cross-subsidisation of such economic activities. Some municipal waste collectors are also exempt from income tax.

The Authority has concluded that the potential cross-subsidies and the tax exemption constitute state aid which is not compatible with the EEA Agreement since it may affect competition and trade within the EEA.

The Authority has proposed that the Norwegian authorities take the following measures in order to comply with the state aid rules of the EEA Agreement:

  • Municipal waste collectors should be required to keep separate accounts for the collection of household waste in its own municipality and its other activities.
  • Norwegian authorites should ensure that no cross subsidisation between the non-economic and economic activities of the municipal waste collectors occurs. In particular, they need to ensure that a fair portion of the fixed common costs are allocated to the economic activities.
  • All municipal waste collectors that offer services on the market should be required to pay income tax.

A non-confidential version of today's Decision will be published in the register of state aid decisions on the Authority's website, normally within a month..

 

For further information, please contact:

Mr. Trygve Mellvang-Berg
Press & Information Officer
tel. (+32)(0)2 286 18 66
mob. (+32)(0)492 900 187




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