Euroopa Komisjoni menetlus

Jan Papsch Mart Blöndal European Commission COBALT Law Firm DG Competition Unit B.3 – Energy and Kawe Plaza, Pärnu mnt 15 Environment State aid II 10141 Tallinn, Estonia E-mail: [email protected] E-mail: [email protected] Confidential attorney-client communication 22.09.2025 RE: SA.115702 - Comments on the position of Estonian State Dear Commission, AS Terminal (the “Complainant”) firstly thanks the EU Commission for providing the opportunity to submit comments on the reply by the Estonian state from 02.04.2025. As preliminary remark on the position of the Estonian State – while the State has in summary claimed that AS Olerex (“Olerex”) did not obtain aid imputable to the state from state resources, this claim has since been overturned by the Estonian Court in case No 4-24-41421 (machine translation attached, annex 1). In the ruling, which has entered into effect, the Court confirmed under point 70 that the conduct of the State during the year 2023 alone has allowed Olerex to escape costs which otherwise would have been included in its budget – amongst others via taxes and excise duties – in the amount of approximately 4.6 MEUR, out of which approximately EUR 1 001 265,64 EUR were state taxes and excise duties. Unofficial translation is as follows: 70. /…/ AS Olerex should have additionally supplied at least 183,026,869.7 MJ, i.e. 5,383,143.2 litres of fuel based on renewable raw material, or 2,691,571.6 litres of fuel based on renewable raw material if the double accounting multiplier were applied. The acquisition of such quantities would have entailed additional expenditures of at least approximately EUR 4.6 million for AS Olerex. /…/ Since AS Olerex did not acquire at least 2,691,571.6 litres of diesel fuel based on renewable raw material, in respect of which AS Olerex would have had to pay EUR 1,001,264.64 in excise duty (2,691,571.6/1000 × 372 = 1,001,264.64), this amount of excise duty was not received into the state budget. Applying the aforementioned logic and input, the costs Olerex escaped in 2022 would therefore be around MEUR 18. It is logical that the greater the extent of non-fulfillment of the obligation, the greater the costs saved. Since Olerex was able to escape costs in the amount of MEUR 4.6 in 2023 failing to fulfill 1,49% of the national obligation of 7,5%, it was able to escape costs around MEUR 18 in 2022 failing to fulfill 6,5% of the national obligation of 7,5%, applying the same logic and input data that Tartu County Court when identifying the costs escaped in 2023 (see above). 1 Available online here (in Estonian): https://www.riigiteataja.ee/kohtulahendid/fail.html?fid=412783189 Estonia Latvia Lithuania +372 665 1888 +371 6720 1800 +370 5250 0800 [email protected] [email protected] [email protected] Since a significant part of the complaint by the Complainant is directed at state aid received via taxes and excise duties, that would have otherwise been paid into the state budget for the year corresponding to the Renewable Energy Obligation 2, the ruling of the national court thus strongly supports a finding by the Commission that illegal state aid was in fact present. Further, the Court ruling is in direct conflict with the reply of the Estonian State provided to the Commission on 02.04.2025. Further, and as a factual remark, since the Complainant is involved in national Court proceedings against both the Estonian state and Olerex, the Complainant has been granted access to documents relating to how Olerex has attempted to comply with the mandatory biofuel content obligations (ie. “Renewable Energy Obligation”). In this regard, the general rule on the Renewable Energy Obligation has been that the market participants have to ensure that their Renewable Energy Obligation is fulfilled within the year that the obligation applies. Retroactive modifications on how the Renewable Energy Obligation is statistically fulfilled after the year is over are generally not allowed unless ordered by the regulating authority to do so. Nevertheless - Olerex was presented with this option during the summer of 2022, in respect to its obligations that related to the year 2021. Since the official (Romario Siimer) who provided Olerex with the opportunity to retroactively make changes to its renewable energy obligation statistics (e-mail exchange in annex 2), is the same who is currently employed at the Ministry of Climate and has drafted the reply of the Estonian State to the Commission, the Ministry of Climate should at the minimum been aware of the benefit granted to Olerex. In the interest of good cooperation with the Commission, the Ministry of Climate should have disclosed this exchange. Especially since based on the understanding of the Complainant, the retroactive changes made to the statements for 2021 may not have been in accordance with the law (there is no legal provision that enables it). This in turn provides a strong indication that the State is withholding a full statement on its conduct from the Commission, in an effort to hinder the finding that it has provided illegal state aid to Olerex. The Complainant believes that this may constitute a breach of the obligation of sincere cooperation between the Union and Member States outlined under Article 4 (3) of the Treaty on the European Union. Further, especially so since the State (in particular the Minister of Climate at the time) has since indicated to the Complainant that for 2021, incorrect information was submitted by Olerex regarding the fulfilment of its Renewable Energy Obligation and allegedly this information was also provided the Estonian prosecution in order for them to take a stance (letter in Estonian attached as annex 4). The reply of Terminal below thus focuses on both the legal aspects of the Estonian reply as well as on the correctness of factual claims outlined by the Estonian State. Terminal has structured the reply based on the legal considerations of State aid under article 107 (1) of the Treaty on the Functioning of the European Union (“TFEU”). 1 Comments on the factual proceedings outlined by the State The State has in its reply to the Commission of 02.04.2025 provided an overview of the proceedings in relation to Olerex with respect to the year 2021, 2022 and 2023. The Complainant notes that the overview should be considered incomplete. 1.1 Notes on the 2021 proceedings The State has explained that Olerex was fined a total of EUR 12 000 for the breach of its obligation under the Estonian Atmospheric Air Protection Act. The State has, however, failed to note that it decided not to pursue the breach of the Renewable Energy Obligation at all. Estonian Ministry of Climate has since, after the expiration of the offence, expressed doubts of the fulfilment of the 2 As noted in the Complaint, Section 21 of the Liquid Fuel Act obliges a seller of fuel to ensure that at least 7,5 per cent (as of 01.01.2022, with the requirement being 10 per cent for the period from 01.01.2021 – 01.01.2022) of the total energy content of petrol, diesel or biofuel released for consumption is of a renewable source. The ruling has since come into force. 2 | 10 Renewable Energy Obligation by Olerex in 2021 (machine translation attached, annex 3). Unofficial translation is as follows: /…/ In 2021, Olerex AS failed to fulfill its obligation to a small extent, for which misdemeanor proceedings were initiated and a court decision has entered into force. Regarding 2021, new doubts arose at the beginning of 2024, when the possible offenses had already expired. The Complainant also notes that to the extent that it is aware, the retroactive change allowed by the Authority in 2022, regarding the 2021 statistics for Olerex, was not in line with law, thus the Ministry allowed Olerex to lessen its exposure to applicable legislation further than was apparent not fining Olerex for its breach of the Renewable Energy ObligaitonObligation. 1.2 Notes on the 2022 proceedings The Authority identified two breaches during the 2022 proceedings – the breach of the obligations under the Estonian Atmospheric Air Protection Act and the breach of the obligations under the Liquid Fuel Act (Renewable Energy Obligation). Despite the aforementioned, the Authority decided to abandon the charges relating to the breach of the Renewable Energy Obligation during the proceedings, only going forward with the charges relating to the breach of the obligations under the Estonian Atmospheric Air Protection Act. The factual breach of the Renewable Energy Obligation in 2022 by Olerex has also been addressed by the Environmental Board in the 2023 proceedings (machine translation attached, annex 3). Unofficial translation is as follows: /…/ Although no penalty was imposed for violating the requirement set out in § 2 1(1) of the 2022 Liquid Fuel Act, the Environmental Board is of the opinion that the requirement was essentially not met, as the fuel with which AS Olerex attempted to meet the requirements arising from the Liquid Fuel Act and the Estonian Atmospheric Air Protection Act was of fossil origin. For clarity to the extent that the Complainant is aware, the Renewable Energy Obligation was completed less than 1% for Olerex, indicating an unfulfilled Renewable Energy Obligation over 6,5% for Olerex, potentially saving more than 10 MEUR. While the State has correctly outlined that the ultimate fine applied to Olerex for its conduct should have been up to EUR 10 000 000 per breach (separately for Renewable Energy Obligation and the obligation arising out of the Estonian Atmospheric Air Protection Act), it has failed to mention that the reason the aforementioned fine was not applied was inadequate national regulation. Supreme Court of Estonia has in case No 4-24-37/313 (point 11) also addressed the shortcomings in the aforementioned regulations, unofficial translation is as follows: /…/ However, the updated regulation did not take into account that, according to Section 47(2) of the Penal Code, a fine of 100 to 400,000 euros could be imposed on a legal entity. /…/ In wishing to provide for stricter penalties for certain misdemeanors, the legislator should have provided for such a possibility in addition to the general part of the Penal Code. In addition, the legislator itself has found in the explanatory memorandum to the draft Act on Amendments to the Penal Code and Other Related Acts (Financial Fines Arising from European Union Law) established in § 47 (4) of the Penal Code that, without amending the general part of the penal law, it may not be possible to provide for or apply the penalties required by European Union legislation in the special part of the Penal Code or in a special law. The State has also failed to mention that applicable law also allows the regulatory authorities to retroactively order the fulfillment of the Renewable Energy Obligation. Despite the Claimant having submitted an application to the regulatory authority to order retroactive recovery, the Authority has refrained from doing so (the Complainant has filed two separate complaints with the national court regarding the above). This is especially noteworthy, since the Authority was in 2022 willing to allow 3 Ruling available online here: https://www.riigiteataja.ee/kohtulahendid/fail.html?fid=388272541 3 | 10 Olerex to retroactively change its statistics for the 2021 Renewable Energy Obligation (during the summer of 2022) to the benefit of Olerex, yet it was unwilling to adopt measures which may impact Olerex negatively. The above sets into question the impartiality of conduct of the Estonian regulatory authorities on ensuring the effective application of EU law. 1.3 Notes on the 2023 proceedings While the Ministry of Climate has outlined that Olerex did not meet its Renewable Energy Obligation, it left out a clear overview on the interpretation of the 1.7% UCO (Used cooking oil) requirement. In particular, the breach of the Renewable Energy Obligation was partially due to Olerex using UCO to fulfill its obligations. According to Article 27 (1) of Directive (EU) 2018/2001 (in force at the time), the share of biofuels and biogas produced from feedstock (such as UCO) shall be limited to 1.7%. According to Article 27(2), the share of biofuels (including UCO) produced for transport may be considered to be twice its energy content. To the extent that the Complainant is aware, the interpretation of the above is that despite the possibility of double counting of energy content, the limitation of 1.7% outlined under article 27 (1) (b) cannot be exceeded, meaning that the double counting rule outlined under Article 27 (2) only affects counting toward compliance. This, to the extent that the Complainant is aware, was the working practice also used in Estonia, until proceedings against Olerex which was also communicated to the market participants when adopting the law. During the 2023 proceedings (breach of the obligation by Olerex), the official interpretation was changed and the “correct” new interpretation was that double counting of UCO allowed a market participant to in fact fulfill 2x 1.7% (i.e. 3.4%) of its Renewable Energy Obligation (i.e. the threshold outlined under Article 25 of Directive 2017/2001) using UCO. While the Complainant firmly believes that this new interpretation is not in line with EU law and the Red II directive EU 2018/2001, the change in approach by Estonia also showcases the favorable (and potentially not compatible with EU legal acts) application of applicable law afforded to Olerex, which results in a genuine advantage not present for other market participants. In any case, the above resulted in a situation where Olerex, having failed to meet its Renewable Energy Obligation for the third year and receiving no appreciable penalties, the actual missing amount was not 1.49% of the Renewable Energy Obligation, but rather 3.19% (1.49% + 1.7% (since UCO was double counted)). In summary, the Complainant notes that already the factual circumstances arising for the years 2021 – 2023 resulted in a situation where a market participant is in fact awarded with significant gain through a legal framework favorable towards that market participant combined with a discrimination and unfair application of said legal framework. As a side remark – this has also impacted market conduct of Olerex, since it has been able to translate the advantage gained into market power and an increase in market share. 2 Comments on the legal framework for State aid According to Article 107(1) TFEU, ‘[s]ave as otherwise provided in the Treaties, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market’. The qualification of a measure as aid within the meaning of the mentioned provision therefore requires according to the case law of the Court of Justice of the European Union (“CJEU”) the following cumulative conditions to be met: 4 | 10  (i) the measure must be financed through State resource; (ii) it must confer an advantage on its recipient; (iii) that advantage must be selective; and (iv) the measure must distort or threaten to distort competition and affect trade between Member States. According to established case law, these considerations are assessed based on objective criteria, which consequently means that the intention of the Member State is irrelevant, as explained by the CJEU e.g. in point 84 of case C-487/06 P - British Aggregates v Commission: The Court has also held on numerous occasions that the objective pursued by State measures is not sufficient to exclude those measures outright from classification as ‘aid’ for the purposes of Article 87 EC (see, inter alia, Case C ‑241/94 France v Commission [1996] ECR I‑4551, paragraph 21; Case C‑342/96 Spain v Commission [1999] ECR I-2459, paragraph 23; and Case C‑75/97 Belgium v Commission, paragraph 25). Similarly and as stated under point 51 of the Commission Notice on State Aid (“Commission Notice”)4, for an advantage to involve state resources, a positive transfer of funds (i.e. and obligation) is not necessary; forgoing State revenue is sufficient. The above is relevant because the State summarises the applicable framework for state aid as follows under point 4 of its reply (unofficial translation, emphasises added): “To establish the existence of State aid, there must be sufficiently direct evidence of a link, on the one hand, between the advantage granted to the beneficiary and, on the other hand, either a reduction in the State budget or a sufficiently specific economic risk borne by the budget. In order to assess the existence of such a link, it must in particular be verified whether the measure, by its objective and overall structure, seeks to create an advantage that constitutes an additional obligation for the State” From the established case law outlined above, as well as from the Commission Notice, it is clear that the approach of the state is misleading. I.e. for establishing the existence of State aid, it does not have to be established that the aim and objective of the measure and the overall structure had to be such that they would have benefited a particular undertaking or a group of undertakings – it is enough that the effect of the measure was such that it provided the beneficiary with an advantage. Similarly, the advantage granted does not have to constitute an additional obligation on the State – foregoing revenues by the State, the existence of which is confirmed by the national Court ruling in case No 4- 24-4142, are sufficient. In respect to particular measures, the State has partially addressed both of the main complaints outlined by the Complainant: (i) lack of appropriate fines; and (ii) foregoing tax revenue and excise duties. The Complainant finds that the State has failed to provide a full reply to the claims outlined in the Complaint, especially in light of the national ruling in case No 4-24-4142. In short: - Lack of appropriate fines – the State has claimed that the fines were applied equally to all participants on a non-discriminatory manner. It has however failed to note clearly that already at the time the fines were introduced, attention had been drawn to the fact that for the largest market participant, it was cheaper to pay the fine rather than fulfil its renewable energy obligation. It was for this reason, and as also outlined by the state, that the fine structure and amounts have since been changed. Thus legally it was a situation where from the viewpoint 4 EUR-Lex - 52016XC0719(05) - EN - EUR-Lex 5 | 10  of the fines structure, dissimilar undertakings were treated similarly, which in and of itself is an indication of discrimination. - Forgoing tax revenue and excise duties – the State has claimed that forgoing tax revenue is not relevant, since eventually Olerex had to import the same amount of fuel and eventually would have had to pay said taxes. This claim is in contradiction with the ruling of the national Court in case No 4-24-4142 and with financial reality. It is an irrefutable fact that the choice to delay payment of State obligations has monetary value 5 and the ability to delay the payment of taxes thus constitutes as aid. The Claimant has provided its views of the position of the State in more detail below. 3 Benefit obtained due to unpaid excise duties and taxes As noted above, the State claimed under point 4.1 of its reply to the Commission that no benefit was obtained by Olerex under circumstances where it did not import the necessary amount of renewable fuel to Estonia for the relevant years and thus did not pay the relevant taxes on that fuel. The State argued that the fuels that are used to fulfil the Renewable Energy Obligation are taxed the same as other fuels. Further, since ultimately the import of fuels corresponds to the sale of fuels, importing further fuels at the end of (for example) 2023 would have resulted in importing less fuels in 2024. Consequently, the total tax paid in sum for the years 2023 and 2024 would have remained the same. This argument is incorrect, since a payment in 2023 would have contributed to the state budget in 2023 and similarly, the financial burden should have been in the annual budget of Olerex for 2023. Thus, the argument of the State does not take into consideration that allowing a market participant to forgo its tax obligation for a financial year, effectively allowing it to delay payment by up to a year, has monetary value in itself and consequently constitutes an advantage. Since it has value, it can be considered a transfer of resources from the State to Olerex within the meaning of article 107 (1) TFEU. For the sake of completeness, the Complainant explains that the four cumulative criteria for state aid are clearly fulfilled under circumstances where Olerex is able to escape the payment of excise duties that would otherwise have been included in its budget. This does not take into account that the failure to import further fuels resulted in a breach of Olerex of its Renewable Energy Obligation. 3.1 Transfer of State resources According to paragraph 51 of the Commission Notice, the transfer of State resources may take many forms, including the “shortfall” in tax revenue due to exemptions or reductions in taxes. In this context, The CJEU has consistently held that the concept of State aid within the meaning of Article 107(1) TFEU is wider than that of a subsidy because it embraces not only positive benefits, such as the subsidies themselves, but also measures which, in various forms, mitigate the normal burdens on the budget of an undertaking, and which therefore, without being subsidies in the strict sense of the word, are of the same character and have the same effect. The supply of goods or services on preferential terms is one of the indirect advantages which have the same effects as (see Case C- 276/02 Spain v Commission [2004], paragraph 24, and Joined Cases C‑341/06 P and C‑342/06 P Chronopost and La Poste v UFEX and Others [2008], paragraph 123). As noted above, the Tartu County Court6 has already confirmed that Olerex has been able to escape the payment of excise duties in the amount of EUR 1,001,264.65. In particular the court stated the following: Under § 66(6) of the ATEKAS, the excise duty rate for diesel fuel in 2023 was 372 euros per 1,000 litres. Since AS Olerex did not acquire at least 2,691,571.6 litres of diesel fuel based 5 See e.g. AG opinion in case C – 279/08 p, ECLU:EU:C:2010:799, point 77 6 Tartu County Court ruling No 4-24-4142, p 77, machine translation attached (annex 1). 6 | 10  on renewable raw materials, in respect of which AS Olerex should have paid 1,001,264.64 euros in fuel excise duty (2,691,571.6/1,000 * 372 = 1,001,264.64), this amount of excise duty was not received into the state treasury. In light of the above, a direct advantage in cost savings is present for Olerex, at the cost of forgone state revenue. Thus, the criteria for the transfer of state resources is unquestionably fulfilled. 3.2 Advantage for the beneficiary With respect advantage gained, the argument of the Ministry of Climate is essence that no advantage was gained for Olerex, since fewer taxes would have been paid in the following year. This argument is not in line with economic reality. The ability for an undertaking to delay payment for an obligation is in itself an advantage, since a delay in financial obligations has monetary value. This is indicated already from the fact that if recovery were to be ordered for unpaid taxes for 2023 as compared to 2024, the interest from those taxes already mean that the ultimate amounts paid by the beneficiary differ. Further, the Complainant explains that the obligation to fulfil its Renewable Energy Obligation is not limited to taxes alone, but also includes other consideration, which as a result allowed Olerex to escape costs of up to EUR 4.6 MEUR7 (not including fines) in 2023 and over MEUR 18 (not including fines) in 2022. Thus, Olerex was in a position to choose whether to fulfil the Renewable Energy Obligation or pay a fine. If the beneficiary believes that by delaying the import of fuels to 2024, it is able to obtain an additional advantage, it is likely to select this option. This can be the case e.g. if it believes that it is able to obtain the fuel cheaper during the next year or even further, should there be a reduction in tax rates for fuel imported by the end of 2023 as compared to 2024, a delay of even one day may result in an advantage for Olerex. The Complainant notes further that there is already existing precedent where providing the aid beneficiary with the option of choice alone can constitute aid, even if the choice to delay payment always results in fines. In particular, Advocate General Mengozzi explained the following under point 77 of C-279/08: “Unlike an undertaking excluded from the emission trading scheme established by the measure in question, which is required to comply with the emission ceiling imposed or pay a fine, the undertakings covered by the scheme have an alternative to that penalty if they exceed the standard. Contrary to what the Netherlands appears to contend, this alternative is genuine. At the end of each year those undertakings can decide whether to acquire the missing allowances immediately or to pay the fine and acquire them at a later date.” In contrast to the current circumstances and as will be outlined in more detail under section 2 of this reply, the State has further decided to not order the retroactive fulfilment of the Renewable Energy Obligation. Thus while in case C-279/08 clear arguments were put forward by the Advocate General Mengozzi that a choice between immediate payment for emission allowances or delayed payment combined with a fine may amount to a genuine alternative and thus state aid, Estonia appears to argue that immediate payment for fuel sources from renewable sources versus a fine significantly lower than the cost of said fuel does not amount to a genuine alternative and thus state aid, even if this option is only available to the largest market participant. It follows from above and contrary to what the Estonian State has explained, the criteria for an advantage for the beneficiary within the meaning of Article 107 (1) TFEU is met. 3.3 Selectivity of the advantage The Complainant notes that reply from the Ministry of Climate did not question the lack of selectivity, which the Complaint interprets as an agreement that the measure in question was selective. 7 Tartu County Court ruling No 4-24-4142, p 77 7 | 10 In any case, the Complainant notes that to the extent that it is aware, no other market participant failed to fulfil its Renewable Energy Obligation and as a result, no other market participant failed to pay tax and excise duties on amounts of fuel that should have been imported. 3.4 Effect on trade and competition As with the criteria of selectivity, the Ministry of Climate has not put forth any line of argument claiming that the criteria for the effect of trade and competition between Member States is not met. Since all fuel used in Estonia is imported from other EU Member States and the Renewable Energy Obligation impacts imported fuels, the effect on trade and competition between Member States is in any case fulfilled. 4 Benefit obtained due to lack of fines In its reply to the Commission, the Estonian State in essence claims that since the fines are applicable on all market participants as a flat fee, no market participant is put in an advantageous position. This claim is strongly contradictory already in the same reply, where in the last paragraph of section 2, the State makes it clear that in order to ensure a proportional mechanism for all market participants, a change in the application of fines was necessary (that is to say a change in law was required). As noted in the Complaint, the flat fee resulted in a progressively increasing benefit based on the quantities of fuel sold by a particular market participant. Olerex, being the largest market participant, thus obtained the largest benefit. Further, considering that no other market participant was in breach of the Renewable Energy Obligation up to the period ending in 2024, Olerex was also the only market participant to obtain an advantage. This has further been confirmed by the Ministry of Climate in the minutes of the meeting on 12.02.2024, at the Estonian Parliament Economic Committee, relating to the law change as follows: “/…/ in the law currently in force, the maximum fine is 10 million euros per infringement. The ministry’s analysis shows that if the largest supplier at present fails to meet the obligation, they would still be in profit with a 10-million-euro fine. This means the provision would need to be made more effective. The ministry wishes to amend the provision so that the limit is no longer a maximum amount, but instead each litre of unfulfilled obligation would carry a specific sanction, which could amount to a total of up to 38 million euros.”8 Taken into account the ruling outlined by the Tartu County Court (case Nr 4-24-4142) outlined, noting that Olerex was able to escape costs in the amount of MEUR 4.6 only in 2023 and over MEUR 18 in 2022, it is already obvious that the level of fines was set at a level where it was more favourable to pay the fine rather than fulfil the Renewable Energy Obligation. The Complainant has explained in detail that the cumulative conditions to establish state aid are also met in the context of fines. 4.1 Transfer of State resources As a starting point, the Complainant notes that the Ministry has not refuted that a transfer of state resources from the State to Olerex has taken place within the meaning of Article 107(1) TFEU. In any case and for completeness - point 51 of the Commission Notice has distinguished that exemptions from the obligation to pay fines or other pecuniary penalties, fulfils the State resources requirement of Article 107(1) TFEU. The Complainant points out in this regard that by not fining biofuel violations or setting the fines at levels which do not serve its purpose to prevent further violations, the State has systematically allowed Olerex to escape the fine and lower the amounts paid. 8 Available online in Estonian here: https://www.riigikogu.ee/download/d4789fb8-e270-424b-9848- 2d1a8a1e9a07 8 | 10 The Complainant further notes that even if the State were to put forward a claim that Olerex is able to escape fines due to bad legislation, it cannot act as justification for breaching state aid rules. In particular, this argument would be in conflict with the effective application of EU law. I.e. under Article 4(3) of the Treaty on the European Union, Member States must ensure the full effectiveness of EU law and systematically bad legislation which continuously provides the largest market participant with an advantage cannot be considered an effective application of the prohibition outlined under Article 107 (1) TFEU. 4.2 Advantage for the beneficiary The Ministry of Climate argued in its reply to the Commission that no advantage exists since, the State has implemented the supervisory procedure and relevant misdemeanour proceedings in a non- discriminatory manner, since they are by law generally applicable to all market participants. The Ministry of Climate further noted that the proceedings have not exceeded normal market conditions and consequently the measure lacks an advantage for the beneficiary. In contrast - the Complainant explained that the breach of state aid rules with regard to fines was in summary due to: (i) The lack of application of fines that should have been applied; and (ii) The limits on fine amounts that benefit the largest market participant (Olerex); The reply by the Estonian State has not addressed either of these complaints and thus at a minimum fails to address the fact that an application of uniform fine on market participants in significantly different factual positions, is in itself considered discriminatory. Commission Notice paragraph 66 states that an advantage, within the meaning of Article 107(1) TFEU, is any economic benefit which an undertaking could not have obtained under normal market conditions, that is to say in the absence of State interventions. Paragraph 68 of the Commission Notice further specifies that the precise form of the measure is irrelevant – it covers all situations in which economic operators are relived of the inherent costs of their economic activities. Adopting legislation, which by its design affords the largest market participant an economic advantage is by design both attributable to the State and meets the criteria outlined under paragraph 66 of the Commission Notice. In essence, the system designed by the State created a situation (since confirmed by the Ministry 9) that afforded the largest market participant an advantage not available under market condition without state intervention. 4.3 Selectivity of the advantage The Ministry of Climate has argued in essence that since the legal framework was applied uniformly on all market participants, no selectivity existed. The Complaint considers this claim to be in conflict with applicable case law and the Commission Notes. In particular, paragraph 118 of the Commission Notice states the following: “the case-law has made it clear that even interventions which, at first appearance, apply to undertakings in general may be selective to a certain extent and, accordingly, be regarded as measures designed to favour certain undertakings or the production of certain goods”. Taken into account the fact that the Ministry has since the actions against the state initiated by the Complainant changed the fine amounts from a uniform fee to a per energy unit basis and has put on official record that the law change was required due to the existing framework providing a benefit to the largest market participant10, there should be no question on the existence of selectivity on the measure. That said, the Complainant notes that the above still does not consider the advantage that has currently been afforded to Olerex from national level proceedings. While the State has claimed that the application of law has been uniform across all market participants, it has failed to account for the fact that the law has only been applied to Olerex. Further, while it has been clear that fines in the 9 See minutes of the Economic Committee of the Estonian parliament above in p 2. 10 See minutes of the Economic Committee of the Estonian parliament above in p 2. 9 | 10 amount of MEUR 10 still afford Olerex a benefit, the actual fines applied have been significantly less (e.g. EUR 300 000). In fact, in several cases, the State has elected not to pursue fines at all. Consequently, the (mis)conduct of the State has exacerbated the advantageous position of Olerex further by virtue of its failure to apply the applicable fines. It is based on the conduct of the State in processing the misconduct of Olerex that the Complainant considers state aid to still be present, since the fines seem not to be applicable on the conduct of Olerex. This is amongst others illustrated from the fact that the Complainant has in national proceedings submitted an application to the regulatory authorities to order the retroactive fulfilment of the Renewable Energy Obligation, thus limiting the advantage gained by Olerex. The authorities have however since refused this. In summary, the Complainant maintains that the State continues to favour Olerex through the following: - the lack of application of actual fines for breached conduct; - where fines are applied, they are applied at significantly discounted rates; - the favourable treatment of Olerex in respect to retroactive fulfilment of the Renewable Energy Obligation. Since already the general legal framework in place up to the start of 2025 is sufficient to meet the criteria for selectivity, the above conduct can be considered selective within the meaning of article 107 (1) TFEU. 4.4 Effect on trade and competition As with the argument related to unpaid taxes, the Ministry of Climate has not put forth any line of argument claiming that the criteria for the effect of trade and competition between Member States is not met. Since all fuel used in Estonia is imported from other EU Member States and the Renewable Energy Obligation impacts imported fuels, the effect on trade and competition between Member States is in any case fulfilled. Yours sincerely, Law firm COBALT ATTACHED: Annex 1 – Machine translation of case No 4-24-4142; Annex 2 – E-mail exchange between Olerex and Environmental Board; Annex 3 – 29.11.2024 misdemeanour decision in misdemeanour case no. 940024000261 Annex 4 – Reply of Minister of Climate to the Complainant 10 | 10 Saatja: "Mart Blöndal [COBALT]" <[email protected]> Saaja: "Info - RAM" <[email protected]> Teema: Euroopa Komisjoni menetlus seoses Olerexile antud riigiabiga Kuupäev: 2025-10-17 09:59 Tähelepanu! Tegemist on välisvõrgust saabunud kirjaga. Tundmatu saatja korral palume linke ja faile mitte avada. Austatud Rahandusministeerium, Edastame AS-i Terminal („Terminal“) palvel Rahandusministeeriumile märgukirja seoses Eesti riigiasutuste poolt ettevõttele AS Olerex (“Olerex”) antud riigiabiiga. Täpsemalt, seoses riigi ja selle ametiasutuste passiivse käitumise tagajärjel tekkinud lubamatu eelisega, mis võimaldas Olerexil vedelkütuseseaduse § 21 sätestatud biokohustust kasumlikult ja üle mitme aasta rikkuda. Eeltoodud tegevusega seonduvalt on Euroopa Komisjon alustanud menetlust Eesti riigi suhtes hindamaks, kas Olerexile on antud keelatud riigiabi kolmel järjestikusel aastal perioodil (s.o. aastatel 2021-2023). Eesti riik edastas 02.04.2025 Euroopa Komisjonile oma nägemuse olukorrast, mille oli kokku pannud Kliimaministeerium ning millele palus Euroopa Komisjon ka Terminali seisukohta. Terminal edastas oma seisukoha Euroopa Komisjonile 22.09.2025 (manuses). Terminal soovib Rahandusministeeriumi tähelepanu juhtida asjaolule, et korrektne menetlus riigi poolt oleks toonud täiendavate maksudena riigile sisse ainuüksi 2023. aasta osas vähemalt 4,6 miljonit eurot, oleks taganud turu normaalse toimimise, mis oleks omakorda soosinud turu tavapärast arengut. Terminal usub, et Riik on tegelikkuses Olerexi eelistamisega kaasnevatest probleemides teadlik, sest on praktikas astunud ka positiivseid samme vedelkütuste seadust reguleeriva õiguskeskkonna korrastamiseks. Sellises olukorras ei ole Terminali hinnangul mõistlik ega pragmaatiline lahendus Olerexile antud eelise eitamine ning Riigi ressursside kasutamine Olerexi kaitsmiseks Euroopa Komisjoni ees, nagu seda on proovitud teha Kliimaministeeriumi poolt kokkupandud ning Euroopa Komisjonile esitatud seisukohas. Pragmaatiline lahendus on Olerexile antud riigiabi tagasi nõudmine ning ressursi kasutamine turu järelevalve parandamiseks, et selliseid biokohustuse nõude rikkumisi tulevikus ei juhtuks. Terminal palub, et Rahandusministeerium vastava noodi ka Kliimaministeeriumile edastaks. Terminali jaoks on kummastav, miks Kliimaministeeriumi poolt esitatud seisukoht ei andnud adekvaatset ülevaadet tegelikust tekkinud olukorrast. Ministeeriumi poolt ei olnud eksitav mitte ainult olukorra kirjeldus, vaid praeguseks hetkeks on riigi poolt Euroopa Komisjonile esitatud seisukoht selgelt vastuolus ka Eesti kohtute poolt tehtud lahenditega. Tähelepanuväärne on, et kohtu otsuses 4-24-4142 kinnitas kohus, et Riigi käitumise tulemusel on 2023. aastal tekkinud Olerexile ainuüksi säästetud maksude ja sellega seotud kulude näol vähemalt 4,6 miljoni eurone eelis. Sellises olukorras ei ole põhjendatud jätkuv Riigi ja seeläbi maksumaksja raha kasutamine Olerexi kaitsmiseks Euroopa Komisjoni ees. Vastavalt eeltoodule on tekkinud olukord, kus riik kulutab oma ressurssi eitamaks probleemi, millest on kõik turuosaliselt on teadlikud, mida on avalikkuses arutatud ning mida praeguseks hetkeks on kinnitanud ka Eesti kohtud. Sellise käitumise tulemusel viibib olukorrale lahenduse leidmine ja turule tekib täiendav kahju, mille maksavad lõpuks kinni Eesti ühiskond ja tarbijad. Olukorra absurdsust illustreerib hästi asjaolude võrdlus, kus ühelt poolt pidas Kliimaministeerium vajalikuks biokohustuse mittetäitmisega seotud trahvimäära muuta (RT I, 04.07.2024,1, jõustus 01.01.2025), selgitades Riigikogu majanduskomisjonis, et varasem trahv soosis kõige suuremat tarnijat (12.02.2024 toimunud istungi protokoll, lk 7) ning teisalt selgitab Euroopa Komisjonile, et Olerexile ei ole eelist antud, sest seadus kohtles kõiki turuosalisi võrdselt. Kliimaministeeriumi väited on selgelt vastuolulised ning selline lähenemine ei aita kaasa olukorra konstruktiivsele lähenemisele. Terminal rõhutab, et Eesti kütuseturu toimimise, ausa konkurentsi ja tarbijate heaolu huvides on Riigi konstruktiivne käitumine, mille tulemusel lõppeb Riigi ressursi kasutamine Olerexi kaitse eesmärgil. Terminali jaoks on jätkuvalt arusaamatu, miks Riik on otsustanud ühe turuosalise eelistamiseks oma ressurssi kasutada. Pöördumine ei sisalda ärisaladusi. Terminal on valmis kohtuma Rahandusministeeriumiga, et olukorda täpsemalt selgitada. Lugupidamisega, Mart Mart Blöndal Valdkonnajuht M. <tel:+372%205340%203776> +372 5340 3776 , T <tel:770> +372 665 1888 <http://www.cobalt.legal/> www.cobalt.legal Käesoleva e-kirja saatja on COBALT büroo Eestis ja sellele kohalduvad järgmised <https://www.cobalt.legal/et/cobalti-e-kirja-hoiatusklausel/> tingimused ja <https://www.cobalt.legal/et/uldtingimused/> üldtingimused