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State Aid

PR(07)46: EFTA Surveillance Authority opens the formal investigation procedure regarding certain exemptions from the Norwegian CO2 tax on gas


Today, the EFTA Surveillance Authority adopted a decision to open the formal investigation procedure regarding certain exemptions from the newly introduced Norwegian CO2tax on natural and liquefied petroleum gas (LPG) .

According to the Norwegian proposal, gas used for purposes other than the heating of buildings will be exempted from this. In particular the gas used in production processes, i.e. for industrial purposes, will not be subject to the tax. In Norway, 94% of the gas is used for industrial purposes, of which the manufacturing sector forms a dominant part.

The Authority is in doubt whether this exemption will, in reality, favour certain sectors over the services sector, namely the manufacturing and the transport sector. This might constitute state aid within the meaning of Article 61(1) of the EEA Agreement. Whereas the service sector, which carries out its commercial activities in heated buildings, will be obliged to pay the CO2 tax on its total gas consumption, undertakings using the gas for production processes will not pay the tax for that use. On the other hand, not all tax differentiations which burden one sector more than another constitute state aid. The Authority will examine this aspect in greater detail in its investigation procedure. The Authority also doubts whether the tax differentiation can be justified by the nature and logic of the Norwegian tax system in order to encourage a switchover to bio-energy by the industries paying the tax.

The decision to open the formal investigation procedure is without prejudice to the Authority’s final decision which might find that the tax differentiation does not constitute state aid. The decision will be published in the Official Journal of the European Union and third parties will be able to comment on it within a month of publication.

For further information, please contact:

Mr. Amund Utne
Director, Competition and State Aid Directorate
Tel.(+32)(0)2 286 18 50; or

Ms. Annette Kliemann
Deputy Director, Competition and State Aid Directorate
Tel. (+32)(0)2 286 18 80

23 November 2007

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