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State Measures That Mitigate an Undertaking’s Environmental Obligations · Case T-257/18 Iberpotash · Annotation by Daniel Vasbeck journal article

Annotation on the Judgment of the General Court (Second Chamber) of 16 January 2020 in Case T-257/18 Iberpotash v Commission

Daniel Vasbeck

European State Aid Law Quarterly, Volume 19 (2020), Issue 3, Page 378 - 383

This case concerns the interplay between environmental obligations and State aid rules. The General Court upheld the Commission’s finding that Spain had granted State aid to the applicant, a mining operator, through two measures that alleviated its restoration obligations. The first measure related to guarantees covering environmental obligations. Their level was set by the State but the guarantees themselves were issued by a private bank. The General Court, based on an extensive interpretation of the State resources criterion, considered that a State measure reducing such guarantees below the requisite level could create a sufficiently concrete risk of a burden on the State budget. The General Court’s interpretation is significant because it extends to all scenarios where (i) undertakings have to provide a guarantee to cover environmental risks and (ii) the State has a subsidiary obligation to intervene. The second measure related to environmental protection measures adopted by the State in lieu of an undertaking and which went beyond the mandatory level. The judgment highlights the risk that Member States seeking to achieve a higher level of environmental protection may grant an advantage to an undertaking by reducing its future environmental exposure.

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