Euroopa Komisjoni otsus riigiabi teatise SA.106614 kohta

EUROPEAN COMMISSION Brussels, 7.7.2023 C(2023) 4727 final PUBLIC VERSION This document is made available for information purposes only. Subject: State Aid SA.106614 (2023/N) – Estonia TCTF: Exceptional support for agricultural and food producers Excellency, 1. PROCEDURE (1) By electronic notification of 3 March 2023, Estonia notified aid in the form of limited amounts of aid (“Exceptional support for food security and maintaining the competitiveness of agricultural producers (2023)”, the “measure”) under the Temporary Crisis Framework ( 1). On 11 May 2023, Estonia adopted a revised national legal basis, based on the Temporary Crisis and Transition Framework for State aid measures to support the economy following the aggression against Ukraine by Russia (the “Temporary Crisis and Transition Framework”) ( 2). ( 1) Communication from the Commission Temporary Crisis Framework for State Aid measures to support the economy following the aggression against Ukraine by Russia (OJ C 426, 9.11.2022, p. 1), which had already replaced the previous Temporary Crisis Framework adopted on 23 March 2022 (OJ C 131I, 24.3.2022, p. 1), as amended on 20 July 2022 (OJ C 280, 21.7.2022, p. 1). ( 2) Communication from the Commission on the Temporary Crisis and Transition Framework for State Aid measures to support the economy following the aggression against Ukraine by Russia (OJ C 101, 17.3.2023, p. 3). This Temporary Crisis and Transition Framework replaces the Temporary Crisis Framework adopted on 28 October 2022 (OJ C 426, 9.11.2022, p. 1), (‘Temporary Crisis Framework’), which had already replaced the previous Temporary Crisis Framework adopted on Suursaadik Ekstsellents Margus Tsahkna Välisminister Islandi väljak 1 15049 Tallinn EESTI/ESTONIA Commission européenne/Europese Commissie, 1049 Bruxelles/Brussel, BELGIQUE/BELGIË - Tel. +32 22991111 (2) The Estonian authorities provided additional information on 18 May, 14, 16, 20, and 30 June 2023. (3) Estonia exceptionally agrees to waive its rights deriving from Article 342 of the Treaty on the Functioning of the European Union (“TFEU”), in conjunction with Article 3 of Regulation 1/1958 ( 3) and to have this Decision adopted and notified in English. 2. DESCRIPTION OF THE MEASURE (4) Estonia considers that the Russian aggression against Ukraine and its direct and indirect effects, including the sanctions imposed and the counter-measures taken, for example by Russia, have economic repercussions on the entire internal market (‘the current crisis’). The current crisis created significant economic uncertainties, disrupted trade flows and supply chains and led to exceptionally large and unexpected price increases, especially in natural gas and electricity, but also in numerous other input and raw materials and primary goods, including in the agri- food sector. (5) More specifically, the Estonian authorities consider that the current crisis has affected undertakings in the agricultural sector, in particular by significantly increased production costs, output prices, high inflation rates and reduced demand. For example, according to data provided by Estonian authorities, between 2021 and 2022, the overall agricultural input costs increased by more than 27%, with significant increases, in particular, in the price of electricity by more than 97%, in the price of fuels for heating by more than 70%, animal feeding stuffs by more than 37% and fertilisers and soil improvers by more than 54% ( 4). The overall agricultural output costs increased, in turn, by more than 40% between those two years. (6) In order to address such increases, to ensure food security and maintain the competitiveness of agriculture in Estonia, the measure aims to remedy the liquidity shortage faced by undertakings within the agricultural primary production and manufacture of food products ( 5) which are sectors that are directly or indirectly affected by the serious disturbance of the economy. (7) Estonia confirms that the aid under the measure is not conditioned on the relocation of a production activity or of another activity of the beneficiary from another country within the EEA to the territory of the Member State granting the aid. This is irrespective of the number of job losses actually occurred in the initial establishment of the beneficiary in the EEA. 23 March 2022 (OJ C 131I, 24.3.2022, p. 1), as amended on 20 July 2022 (OJ C 280, 21.7.2022, p. 1). The Temporary Crisis Framework was withdrawn with effect from 9 March 2023. ( 3) Regulation No 1 determining the languages to be used by the European Economic Community (OJ 17, 6.10.1958, p. 385). ( 4) These increases have been calculated taking into account the price indexes in 2022 vs. 2021. According to the Estonian authorities, these percentages are based on price indexes compiled by the Estonian Statistical Office and published in the Eurostat database (apri_pi15_ina). ( 5) As defined in subsection 10 of Section C of the Estonian Classification of Economic Activities (“EMTAK”). 2 (8) The compatibility assessment of the measure is based on Article 107(3), point (b), TFEU in light of sections 1 and 2.1 of the Temporary Crisis and Transition Framework. 2.1. The nature and form of aid (9) The measure provides aid on the basis of a scheme in the form of direct grants. 2.2. Legal basis (10) The legal basis for the measure is the Regulation of the Minister of Rural Affairs No. 26/2023, of 11 May 2023, on the “Exceptional support for food security and maintaining the competitiveness of agricultural producers” (the “legal basis”). The legal basis (Article 11(2)) contains a clause according to which aid under the measure will not be granted before the Commission’s approval. 2.3. Administration of the measure (11) The Agricultural Registers and Information Board (the “ARIB”) ( 6) is responsible for administering the measure. Applications for aid shall be submitted to the ARIB. 2.4. Budget and duration of the measure (12) The estimated budget of the measure is EUR 10 million (i.e., EUR 5 million for the primary production of agricultural products and EUR 5 million for the manufacture of food products), financed through the general budget of the State. (13) Aid may be granted under the measure as from the notification of the Commission’s decision approving the measure until no later than 31 December 2023. 2.5. Beneficiaries (14) The beneficiaries of the measure are the following, subject to the conditions laid down in the legal basis: (a) undertakings (including self-employed individuals) engaged in the following sub-sectors of the primary production of agricultural products covered by Annex I to the TFEU: i. the production of pork; ii. the production of poultry; iii. growing potatoes, vegetables, fruit, berries and strawberries in open ground; iv. growing vegetables, vegetables and herbs, strawberries and flowers in heated greenhouses. ( 6) ARIB is a government agency operating under the authority of the Ministry of Rural Affairs responsible for organising the granting of a variety of national and EU subsidies, see https://www.pria.ee/en. 3  (b) undertakings (including self-employed individuals) who, at the time of submission of the application, are engaged in the manufacture of food products, excluding the processing and preservation of fish, crustaceans and molluscs ( 7) and the production of ready-to-eat food for pet animals ( 8). (15) The Estonian authorities confirm that the aid under the notified measure will be granted only to undertakings affected by the crisis, since all operators active in the sectors indicated in recitals (6), (14) and (18) have been affected by the significant increases in both agricultural input costs (especially, in the electricity, animal feed, fuels, fertilisers) and output costs resulting from the current crisis, as noted in recital (5). (16) Estonia confirms that the aid under the measure is not granted to undertakings under sanctions adopted by the Union, including but not limited to: (i) persons, entities or bodies specifically named in the legal acts imposing those sanctions; (ii) undertakings owned or controlled by persons, entities or bodies targeted by sanctions adopted by the Union; or (iii) undertakings active in industries targeted by sanctions adopted by the Union, insofar as the aid would undermine the objectives of the relevant sanctions. (17) Estonia confirms that the measure may not in any way be used to undermine the intended effects of sanctions imposed by the EU or its international partners and will be in full compliance with the anti-circumvention rules of the applicable regulations ( 9). In particular, natural persons or entities subject to the sanctions will not benefit directly or indirectly from the measure. 2.6. Sectoral and regional scope of the measure (18) The measure is open to the sectors described in recital (14) above. It therefore does not apply to other sectors, notably the fisheries and aquaculture sectors. (19) The measure applies to the whole territory of Estonia. 2.7. Basic elements of the measure (20) The maximum amount of aid per undertaking in the relevant sub-sectors of primary production of agricultural products is EUR 250 000. (21) The maximum amount of aid per single legal entity in the sector of manufacture of food products is EUR 200 000 and the maximum amount per undertaking in the sector of manufacture of food products is EUR 350 000. The Estonian authorities therefore confirm that the overall aid will not exceed EUR 2 million per undertaking at any given point in time. All figures used must be gross, that is, before any deduction of tax or other charges. The aid for enterprises active in the ( 7) Subsection C 102 of the EMTAK. ( 8) Subsection C 1092 of the EMTAK. () 9 For example, Article 12 of Council Regulation (EU) No 833/2014 of 31 July 2014 concerning restrictive measures in view of Russia's actions destabilising the situation in Ukraine (OJ L 229, 31.7.2014, p. 1). 4  manufacture of food products will only be granted if the ratio between the applicant’s energy costs and its sales revenue in 2022 has deteriorated by at least 10% compared to the same ratio in 2021. (22) The Estonian authorities confirm that aid to undertakings in the primary production of agricultural products ( 10) is not fixed on the basis of the price or quantity of products on the market. (23) The Estonian authorities confirm that where the beneficiaries are undertakings active in the processing of agricultural products, the aid is conditional on not being partly or entirely passed on to primary producers and is not fixed on the basis of the price or quantity of products put on the market by the undertakings concerned or purchased from primary producers, unless, in the latter case, the products were either not put on the market or were used for non-food purposes such as distillation, methanization or composting by the undertakings concerned. 2.8. Compliance with relevant provisions of Union law (24) The Estonian authorities confirm that the proposed measure does not by itself, or by the conditions attached to it or by its financing method constitute a non- severable violation of Union law. 2.9. Cumulation (25) The Estonian authorities confirm that aid granted under the measure may be cumulated with aid under de minimis Regulations ( 11) provided the provisions and cumulation rules of those Regulations are respected, but not with the General Block Exemption Regulation ( 12) nor with the Agricultural Block Exemption Regulation ( 13). (26) The Estonian authorities confirm that aid under the measure may be cumulated with other forms of Union financing, provided that the maximum aid intensities indicated in the relevant guidelines or regulations are respected. (10) As defined in Article 2(5) of Commission Regulation (EC) No 702/2014 of 25 June 2014 declaring certain categories of aid in the agricultural and forestry sectors and in rural areas compatible with the internal market in application of Articles 107 and 108 of the Treaty on the Functioning of the European Union (OJ L 193, 1.7.2014, p. 1). (11) Commission Regulation (EU) No 1407/2013 of 18 December 2013 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid (OJ L 352, 24.12.2013, p. 1), Commission Regulation (EU) No 1408/2013 of 18 December 2013 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid in the agriculture sector (OJ L 352, 24.12.2013 p. 9) and Commission Regulation (EU) No 360/2012 of 25 April 2012 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid granted to undertakings providing services of general economic interest (OJ L 114, 26.4.2012, p. 8). (12) Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty (OJ L 187 of 26.6.2014, p. 1). (13) Commission Regulation (EU) 2022/2472 of 14 December 2022 declaring certain categories of aid in the agricultural and forestry sectors and in rural areas compatible with the internal market in application of Articles 107 and 108 of the Treaty on the Functioning of the European Union (OJ L 327, 21.12.2022, p. 1). 5 (27) The Estonian authorities confirm that aid under the measure may be cumulated with aid under measures approved by the Commission under the COVID-19 Temporary Framework ( 14). The Estonian authorities provided a list of measures ( 15) approved by the Commission under such COVID-19 Temporary Framework. Aid under the notified measure may be cumulated with those other measures provided the respective cumulation rules are respected. (28) The Estonian authorities confirm that aid granted under the measure may be cumulated with aid granted under other measures approved by the Commission under other sections of the Temporary Crisis and Transition Framework provided the provisions in those specific sections are respected. (29) Estonia confirms that for aid granted under section 2.1 of the Temporary Crisis and Transition Framework and the previous Temporary Crisis Framework, the aid ceilings provided in the respective sections of the current Temporary Crisis and Transition Framework are respected at any point in time. (30) The Estonian authorities confirm that if the beneficiary receives aid on several occasions or in several forms under the measure or aid under other measures approved by the Commission under section 2.1 of the Temporary Crisis and Transition Framework, the overall maximum cap per undertaking, as set out in points 61(a) and 62(a) of that framework, will be respected. Aid granted under the measure and other measures approved by the Commission under section 2.1 of the Temporary Crisis and Transition Framework which has been reimbursed before granting new aid under the notified measure will not be taken into account in determining whether the relevant ceiling is exceeded. 2.10. Monitoring and reporting (31) The Estonian authorities confirm that they will respect the monitoring and reporting obligations laid down in section 3 of the Temporary Crisis and Transition Framework (including the obligation to publish relevant information on each individual aid above EUR 100 000 granted under the measure and EUR 10 000 in the primary agriculture sector on the comprehensive national State (14) Communication from the Commission - Temporary framework for State aid measures to support the economy in the current COVID-19 outbreak (OJ C 91I, 20.3.2020, p. 1), as amended by Commission Communications C(2020) 2215 (OJ C 112I, 4.4.2020, p. 1), C(2020) 3156 (OJ C 164, 13.5.2020, p. 3), C(2020) 4509 (OJ C 218, 2.7.2020, p. 3), C(2020) 7127 (OJ C 340I, 13.10.2020, p. 1), C(2021) 564 (OJ C 34, 1.2.2021, p. 6), and C(2021) 8442 (OJ C 473, 24.11.2021, p. 1). (15) In particular, the Estonian authorities have confirmed that the agricultural sector has been supported with decisions in cases SA.100636 – Exceptional support to dairy and pig meat producers due to the COVID-19 outbreak (OJ, C 90, 25.2.2022, p.1), SA.60666 – Exceptional temporary support due to the COVID-19 outbreak for farmers (OJ, C 195, 21.5.2021, p.1), SA.58678 – COVID-19: Exceptional temporary support due to the COVID-19 outbreak for the food processing sector (OJ, C 285, 16.7.2021), SA.103936 – TCF: Support for investments in the food industry to ensure security of energy supply (OJ C 378, 30.9.2022), and SA.103257 – TCF: Emergency support for the agricultural sector (OJ C 253, 1.7.2022, p.1). 6  aid website or Commission’s IT tool within 12 months from the moment of granting ( 16)). 3. ASSESSMENT 3.1. Lawfulness of the measure (32) By notifying the measure before putting it into effect (recital (10)), the Estonian authorities have respected their obligations under Article 108(3) TFEU. 3.2. Existence of State aid (33) For a measure to be categorised as aid within the meaning of Article 107(1) TFEU, all the conditions set out in that provision must be fulfilled. First, the measure must be imputable to the State and financed through State resources. Second, it must confer an advantage on its recipients. Third, that advantage must be selective in nature. Fourth, the measure must distort or threaten to distort competition and affect trade between Member States. (34) The measure is imputable to the State, since it is administered by ARIB and it is based on the Regulation of the Minister of Rural Affairs No 26, of 11 May 2023. It is financed through the general budget of the State (see recital (12)). (35) The measure confers an advantage on its beneficiaries in the form of direct grants (recital (9)). The measure thus relieves those beneficiaries of costs which they would have had to bear under normal market conditions. (36) The advantage granted by the measure is selective, since it is awarded only to certain undertakings active in the sectors and fulfilling the eligibility criteria described in recitals (14) to (17) and (21). (37) The measure is liable to distort competition, since it strengthens the competitive position of its beneficiaries. It also affects trade between Member States, since those beneficiaries are active in sectors in which intra-Union trade exists. (38) In view of the above, the Commission concludes that the measure constitutes aid within the meaning of Article 107(1) TFEU. The Estonian authorities do not contest that conclusion. 3.3. Compatibility (39) Since the measure involves aid within the meaning of Article 107(1) TFEU, it is necessary to consider whether that measure is compatible with the internal market. (40) Pursuant to Article 107(3), point (b), TFEU, the Commission may declare compatible with the internal market aid “to remedy a serious disturbance in the economy of a Member State”. (16) Referring to information required in Annex III to Commission Regulation (EU) No 651/2014 and Annex III to Commission Regulation (EU) 2022/2472 and Annex III to Commission Regulation (EU) 2022/2473. 7 (41) By adopting the Temporary Crisis and Transition Framework, the Commission acknowledged (in section 1) that the military aggression against Ukraine by Russia, the sanctions imposed the EU or its international partners and the counter measures taken, for example by Russia have created significant economic uncertainties, disrupted trade flows and supply chains and led to exceptionally large and unexpected price increases, especially in natural gas and electricity, but also in numerous other input and raw materials and primary goods, including the agri-food sector. (42) Those effects taken together have caused a serious disturbance of the economy in all Member States, including in the economy of Estonia. The Commission concluded that State aid is justified and can be declared compatible with the internal market on the basis of Article 107(3), point (b), TFEU for a limited period if it serves to remedy the liquidity shortage faced by undertakings that are directly or indirectly affected by the serious disturbance of the economy. (43) The measure aims at supporting food security and maintaining the competitiveness of agricultural producers at a time when a wide range of economic sectors - including that one - are affected, the normal functioning of markets is severely disturbed leading to severe disturbances of the real economy of Member States, including in the economy of Estonia. (44) The measure is one of a series of measures conceived at national level by the Estonian authorities to remedy a serious disturbance in their economy. The importance of the measure to support undertakings within relevant sub-sectors of the agricultural sector due to increased costs is widely accepted by economic commentators and the measure is of a scale which can be reasonably anticipated to produce effects across the entire Estonian economy. Furthermore, the measure has been designed to meet the requirements of a specific category of aid (“Limited amounts of aid”) described in section 2.1 of the Temporary Crisis and Transition Framework. (45) The Commission considers that the measure is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State and meets all the relevant conditions of the Temporary Crisis and Transition Framework. In particular: − The aid takes the form of direct grants (recital (9)). The notified measure therefore complies with point 61(a) of the Temporary Crisis and Transition Framework. − The overall nominal value of the direct grants will not exceed EUR 2 million per undertaking per Member State; all figures used must be gross, that is, before any deduction of tax or other charges (recital (21)). The measure therefore complies with point 61(a) of the Temporary Crisis and Transition Framework. − Aid is granted under the measure on the basis of a scheme with an estimated budget (recital (12)). The measure therefore complies with point 61(b) of the Temporary Crisis and Transition Framework. 8  − Aid will be granted under the measure no later than 31 December 2023 (recital (13)). The measure therefore complies with point 61(c) of the Temporary Crisis and Transition Framework. − Aid will be granted only to undertakings affected by the crisis (recital (15)). The measure therefore complies with point 61(d) of the Temporary Crisis and Transition Framework. − Aid granted to undertakings active in the processing of agricultural products is excluded when the aid is conditional on being partly or entirely passed on to primary producers, fixed on the basis of the price or quantity of products put on the market by the undertakings concerned or purchased from primary producers, unless, in the latter case, the products were either not put on the market or were used for non-food purposes such as distillation, methanization or composting by the undertakings concerned (recital (23)). The measure therefore complies with point 61(e) of the Temporary Crisis and Transition Framework. − The overall nominal value of direct grants does not exceed EUR 250 000 per undertaking active in the relevant sub-sectors of primary production of agricultural products; all figures used must be gross, that is, before any deduction of tax or other charges (recital (20)). The measure therefore complies with point 62(a) of the Temporary Crisis and Transition Framework. − Aid granted to undertakings active in the relevant sub-sectors of primary production of agricultural products must not be fixed on the basis of the price or quantity of products put on the market (recital (22)). The measure therefore complies with point 62(b) of the Temporary Crisis and Transition Framework. − Where an undertaking is active in several sectors to which different maximum aid amounts apply in accordance with points 61(a) and 62(a) of the Temporary Crisis and Transition Framework, Estonia will ensure, by appropriate means of separation of accounts, that the relevant ceiling is respected for each of those activities and that the overall maximum amount of EUR 2 million is not exceeded per undertaking per Member State (recital (21)). The measure therefore complies with point 63 of the Temporary Crisis and Transition Framework. (46) State aid measures that entail, by themselves, by the conditions attached to them or by their financing method a non-severable violation of Union law cannot be declared compatible with the internal market ( 17). Estonia has confirmed that the proposed measure does not by itself, or by the conditions attached to it, or by its financing method, constitute a non-severable violation of Union law (recital (24)). In addition, the Commission has no indications of any possible breach of Union law that would prevent the notified measure from being declared compatible with (17) Judgment of 31 January 2023, Commission v Braesch and Others, C-284/21 P, EU:C:2023:58, paras, 96 et seq. 9  the internal market. Therefore, the Commission considers that the measure does not infringe any relevant provisions of Union law. (47) Estonia confirms that, in accordance with point 95 of the Temporary Crisis and Transition Framework, overall aid granted under section 2.1 of the Temporary Crisis and Transition Framework and the previous Temporary Crisis Framework will not exceed the aid ceilings provided in the respective sections of the Temporary Crisis and Transition Framework at any point in time (recital (29)). (48) The Estonian authorities confirm that, as required by point 51 of the Temporary Crisis and Transition Framework, the aid under the measure is not conditioned on the relocation of a production activity or of another activity of the beneficiary from another country within the EEA to the territory of the Member State granting the aid. This is irrespective of the number of job losses actually occurred in the initial establishment of the beneficiary in the EEA (recital (7)). (49) The Estonian authorities confirm that, as required by point 52 of the Temporary Crisis and Transition Framework, the aid under the measure will not be granted to undertakings under sanctions adopted by the Union, including but not limited to: (a) persons, entities or bodies specifically named in the legal acts imposing those sanctions; (b) undertakings owned or controlled by persons, entities or bodies targeted by sanctions adopted by the Union; or (c) undertakings active in industries targeted by sanctions adopted by the Union, insofar as the aid would undermine the objectives of the relevant sanctions (recital (16)). (50) The Estonian authorities confirm that the monitoring and reporting requirements set out in section 3 of the Temporary Crisis and Transition Framework will be respected (recital (31)). The Estonian authorities further confirm that the aid under the measure may only be cumulated with other aid if the specific provisions in the relevant sections of the Temporary Crisis and Transition Framework, the previous Temporary Crisis Framework and the COVID-19 Temporary Framework and the cumulation rules in the relevant Regulations and applicable Communications are respected (recitals (28) and (29)). (51) The Commission therefore concludes that the measure is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State and is compatible with the internal market pursuant to Article 107(3), point (b), TFEU, since it meets all the relevant conditions of the Temporary Crisis and Transition Framework. 4. CONCLUSION The Commission has decided not to raise objections to the aid on the grounds that it is compatible with the internal market pursuant to Article 107(3), point (b) of the Treaty on the Functioning of the European Union. 10 The decision is based on non-confidential information and is therefore published in full on the Internet site: http://ec.europa.eu/competition/elojade/isef/index.cfm. Yours faithfully, For the Commission Margrethe VESTAGER Executive Vice-President 11  Regionaal- ja Põllumajandusministeerium Meie 19.07.2023 nr 12.1-3/1676-3 [email protected] Euroopa Komisjoni otsus riigiabi teatise SA.106614 kohta Lugupeetud kolleegid Edastame Euroopa Komisjoni otsuse riigiabi teatise SA.106614 „TCTF: Exceptional support for agricultural and food producers“ kohta Lugupidamisega (allkirjastatud digitaalselt) Kaur Kajak halduspoliitika asekantsler Lisa(d): Euroopa Komisjoni otsus Ljudmilla Sokolnikova 611 3360 [email protected] Lisaadressaadid: Põllumajanduse Registrite ja Informatsiooni Amet Suur-Ameerika 1 / 10122 Tallinn / 611 3558 / [email protected] / www.rahandusministeerium.ee registrikood 70000272 2