RIS322415 Bijlage 4 SA 102859 009AEF8A-0500-C221-982E-3E4E7825E3B4 67 1

EUROPEAN COMMISSION

Brussels, 28.8.2023 C(2023) 5810 final In the published version of this decision, some information has been omitted, pursuant to articles 30 and 31 of Council Regulation (EU) 2015/1589 of 13 July 2015 laying down detailed rules for the application of Article 108 of the Treaty on the Functioning of the European Union, concerning non-disclosure of information covered by professional secrecy. The omissions are shown thus […]

Subject:

PUBLIC VERSION This document is made information purposes only.

available

State Aid / Netherlands SA.102859 (2022/N) NL_BZK_CSDO_Den Haag United Fish Auctions N.V.

Excellency, 1.

PROCEDURE

(1)

By electronic notification of 15 November 2022, registered by the Commission on the same day under the reference SA.102859 (2022/N), the Netherlands notified individual ad hoc aid (the ‘aid’) to the company United Fish Auctions N.V. (‘UFA’). The aid relates to investments for the decontamination from asbestos and the renovation of the fish auction building of UFA in the port of Scheveningen in The Hague.

(2)

With letter of 12 January 2023, the Commission requested additional information. The Commission sent a reminder letter to the Netherlands on 8 March 2023. The Netherlands replied with letter of 3 April 2023, registered by the Commission on the same day. With letter of 31 May 2023, the Commission requested further information, to which the Netherlands replied with a written submission on 30 June 2023, registered by the Commission on the same day.

(3)

The Netherlands exceptionally agrees to waive its rights deriving from Article 342 of the Treaty on the Functioning of the European Union (‘TFEU’), in

H.E. Mr. Wopke Hoekstra Minister of Foreign Affairs Rijnstraat 8 Postbus 20061 NL - 2500 EB Den Haag Nederland Commission européenne/Europese Commissie, 1049 Bruxelles/Brussel, BELGIQUE/BELGIË - Tel. +32 22991111

for

conjunction with Article 3 of Regulation 1/19581 and to have this Decision adopted and notified in English. 2.

DESCRIPTION 2.1.

(4)

NL_BZK_CSDO_The Hague United Fish Auctions N.V. (NL_BZK_CSDO_Den Haag United Fish Auctions N.V.) 2.2.

(5)

Form of aid

The ais is granted in the form of direct grant. 2.4.

(7)

Objective

The objective of the aid is the renovation of the monumental fish auction building of the UFA in the port of Scheveningen in The Hague and more precisely: (a) the asbestos decontamination and the replacement of the asbestos containing roof of the fish auction building; and (b) the renovation of the fish auction building. 2.3.

(6)

Title

Legal basis

The legal basis of the aid is the draft of the ‘Development agreement Northern Head of Scheveningen Port UFA’, version dated 18 October 2022 (‘Ontwikkelingsovereenkomst Noordelijk Havenhoofd Scheveningen UFA’, Versie d.d. 18 oktober 2022) (the ‘Development agreement’) between the Municipality of The Hague and UFA. 2.5.

Budget and duration

(8)

According to the document ‘A. businesscase renovation Visafslaggebouw Scheveningen’ from 3 March 2023 that the Netherlands submitted (the ‘business plan’), the estimated budget of the aid is EUR […]2 and it will be financed by Municipality of The Hague (‘the Municipality’ or ‘the granting authority’). This budget will cover to investments for: (a) the asbestos decontamination and the replacement of the asbestos containing roof of the fish auction building; and (b) the renovation of the fish auction building. The total investment cost for the renovation project of the fish auction building amounts to EUR […]3.

(9)

The Netherlands also submitted that part of the project budget amounting to EUR […]4 is financed by the National Office for Cultural Heritage (the ‘RCE subsidy’) for the conservation of the fish auction building as a national monument. The RCE subsidy does not form part of the notified aid since it is financed under a block exempted scheme5, but it is simply cumulated with it (recital (46)).

1

Regulation No 1 determining the languages to be used by the European Economic Community (OJ 17, 6.10.1958, p. 385). 2 Covered by the obligation of professional secrecy. 3 Covered by the obligation of professional secrecy. 4 Covered by the obligation of professional secrecy. 5 According to the Netherlands this subsidy is granted on the basis of the Subsidieregeling restauratie rijksmonumenten 2019-2020 (https://wetten.overheid.nl/BWBR0042214/2019-05-18), which falls within the Staatssteunkader voor monumentenzorg, which is block exempted on the basis of Article 53 of the 2

(10)

According to the legal basis (recital (7)), the Development agreement will take effect only after the approval of the aid by the Commission. The date of the granting of the aid will be the date of signature of the Development agreement. UFA will develop the project within two years of the signature of the agreement. 2.6.

Beneficiary

(11)

According to the Netherlands, UFA is the owner of the fish auction building in the port of Scheveningen in The Hague and the beneficiary of the aid. UFA maintains and operates fish auctions and is the result of a merger in 2000 of the fish auctions in The Hague (Scheveningen) (previously owned by the Municipality of The Hague), Stellendam (previously owned by the Municipality of Goeree-Overflakkee) and Colijnsplaat (previously owned by the Municipality of Noord-Beveland).

(12)

The Municipality of The Hague owns 34 % of UFA’s shares, the Municipality of Goeree-Overflakkee owns 63 % and the remaining 3 % is owned by UFA itself.

(13)

The UFA group consists of the following 100 % owned operating subsidiaries: Visveiling Colijnsplaat B.V., Stellendam Trading B.V., Stellendam Factorij B.V., Visserij-innovatiecentrum Zuidwest-Nederland B.V., Visafslag Stellendam B.V. and Visafslag Scheveningen B.V.

(14)

In 2021, the UFA group employed 21 full-time employees and a had a net turnover of EUR 4.3 million.

(15)

The Netherlands confirmed that UFA: a) is not subject to an outstanding recovery order following a previous Commission decision declaring an aid illegal and incompatible with the internal market in accordance with point (11) of the Commission Guidelines for State aid in the fishery and aquaculture sector (‘the State aid Guidelines’)6; and b) is not an undertaking in in difficulty in accordance with points (10) and (31)(bb) of the State aid Guidelines within the meaning of the Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty7. 2.7.

Description of the aid

Overview (16)

The aid is notified under Part 1, Chapter 2, section 2.3 ‘Aid for categories of measures covered by Regulations on block exemptions’ of the State aid

General Block Exemption Regulation (‘GBER’) i.e., Commission Regulation (EU) 2023/1315 of 23 June 2023 amending Regulation (EU) No 651/2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty and Regulation (EU) 2022/2473 declaring certain categories of aid to undertakings active in the production, processing and marketing of fishery and aquaculture products compatible with the internal market in application of Articles 107 and 108 of the Treaty (Text with EEA relevance) (OJ L 167, 30.6.2023, p. 1). See SA.40475. 6 Communication from the Commission Guidelines for State aid in the fishery and aquaculture sector (OJ C 107, 23.3.2023, p. 1). 7 Communication from the Commission — Guidelines on State aid for rescuing and restructuring nonfinancial undertakings in difficulty (OJ C 249, 31.7.2014, p. 1). 3

Guidelines i.e., by the Commission Regulation (EU) 2022/2473 declaring certain categories of aid to undertakings active in the production, processing and marketing of fishery and aquaculture products compatible with the internal market in application of Articles 107 and 108 TFEU (‘FIBER’)8. The Netherlands submitted that the aid is of the same kind as aid falling within Article 29 ‘Aid for fishing ports, landing sites, auction halls and shelters’ of the FIBER. (17)

The Netherlands explained that the only reason that the aid cannot be exempted from notification based on Article 29 of the FIBER is that the thresholds of Article 3 of the FIBER are exceeded. The total eligible investment costs of the renovation project are EUR […]9 based on the business plan (recital (8)) and therefore more than EUR 2,5 million. The gross grant equivalent of the notified aid measure is EUR […]10 (the contribution of the Municipality) and EUR […]11 (when the RCE subsidy under recital (9) is considered) and therefore this aid amount also exceeds the threshold of EUR 1,25 million per undertaking per year. Therefore, a notification of the aid measure remains necessary. Eligible costs

(18)

According to the business plan submitted by the Netherlands (recital (8)), the aid will finance the following expenditure: Concerning the remediation of asbestos: (a)

the remediation of the roofing amounting to EUR […]12;

(b)

the remediation of the asbestos indoor amounting to EUR […]13;

(c)

restoration works linked to asbestos remediation amounting to EUR […]14;

Concerning construction costs:

(19)

8

(d)

installations (electrical, mechanical and climate) amounting to EUR […]15; and

(e)

rebuilding (new layout: screeds, wall- and ceiling systems) amounting to EUR […]16.

Regarding the investments for the renovation of the fish auction building under recitals (18)(d)(18)(e) above, the Netherlands explained that the installations for electricity, heating, cooling and ventilation will be replaced or modified, both in the offices as in the inspection area and loading docks. The mechanical installations concerning drains and wells will also be replaced. A new climate system (heat pump) will be installed for cooling and heating. In addition, the fish

OJ L 327, 21.12.2022, p. 82.

9

Covered by the obligation of professional secrecy. Covered by the obligation of professional secrecy. 11 Covered by the obligation of professional secrecy. 12 Covered by the obligation of professional secrecy. 13 Covered by the obligation of professional secrecy. 14 Covered by the obligation of professional secrecy. 15 Covered by the obligation of professional secrecy. 16 Covered by the obligation of professional secrecy. 10

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auction hall will be structured based on a new layout, which will make the fish auction hall more compact. This will result in a more efficient way of handling the fish (less moving around, faster in and out), which will improve the quality of the fish. Because of this new layout screeds, walls and ceiling systems will be moved and replaced. (20)

The Netherlands has committed that the precise obligations of the beneficiary will be laid down in the final Development agreement and that it will verify the actual expenses through reports of an independent auditor.

(21)

The Netherlands also clarifies as regards the RCE subsidy (recitals (9) and (17)), that it is granted for the conservation of the national monument (instandhoudingskosten). According to the business plan, the RCE subsidy finances costs for structural work (including the substructure), wind and waterproof rough build (also including the roofing), the renovation of the facade (replacing window frames and glazing) and finishing works (such as tiling and painting, applying metal works). The costs that are subsidized by the Municipality according to recital (18), are different eligible costs than the costs that are part of the RCE subsidy, since the contribution of the Municipality covers the asbestos remediation and the installations (electrical, mechanical and climate) and rebuilding costs (new layout: screeds, walls and ceilings) as explained in recital (19). These costs are not covered by the RCE subsidy. Aided economic activity

(22)

According to the Netherlands, the aided economic activity is the operation of fish auctions (recital (11)). More precisely, the aid to UFA is aimed at the asbestos decontamination and renovation of the fish auction building (recitals (5) and (8)). The asbestos decontamination will provide a higher level of environmental protection and enhance the safety and working conditions in and around the fish auction building. The investments covered by the aid will contribute to the improvement of hygiene and food safety conditions in the fish auction building and therefore to the quality of the landed fish. Moreover, the Netherlands considers that the aid indirectly benefits the overall development of the port of Scheveningen. The fish auction building is an iconic national monument that must be preserved and made fit for the future. The renovation works and asbestos removal are necessary in that context as well.

(23)

The Netherlands furthermore explained that without the intervention of the State, the investments covered by the aid will not be addressed by the market i.e., UFA will not undertake these investments because it has no commercial incentive to do so, because these investments do not represent any potential return (recital (30)).

(24)

According to the Netherlands, despite that fact the UFA is considered a large enterprise (recital (12); see also recital (69) below), any negative effects of the aid on competition must be regarded as minimal or zero, because the aid aims only at the asbestos decontamination and renovation of the fish auction building. The renovation of the fish auction building does not increase the capacity of the auction or of the port in general. The aid does not cover investments in innovative products or working methods that would improve the competitiveness of UFA. In addition, the aid will not allow UFA to reduce its costs in a way that it would then have an impact on the tariffs. It is therefore unlikely that the renovation of the fish auction building, and the asbestos decontamination will result in attracting 5

customers or investments from other Member States or to an improvement in the competitive position of the beneficiary compared to operators of fish auctions in other Member States. Contribution to CFP and EMFAF objectives (25)

According to the Netherlands, the asbestos decontamination and renovation of the fish auction building of UFA will provide a higher level of environmental protection and will enhance the safety and working conditions in and around the fish auction building. The investments covered by the aid will contribute to the improvement of hygiene and food safety conditions in the fish auction building and therefore to the quality of the landed fish (recital (22)).

(26)

According to the Netherlands, the aid is in line with the underlying principles and objectives of Article 29 of the FIBER (recital (16)). For this reason, it does not contravene any provisions of Union law and it contributes to the achievement of the objectives of the on the Common Fisheries Policy (‘CFP’)17 and, within that policy, to the objectives of Regulation (EU) 2021/1139 establishing the European Maritime, Fisheries and Aquaculture Fund18 (the ‘EMFAF regulation’).

(27)

The expected benefits of the aid are the higher level of environmental protection, an improvement in safety and working conditions of the building and its surroundings and an improvement of the hygiene and food safety of the fish auction and therefore of the quality of the landed products (recital (25)).

(28)

The aid does not involve an increase in fishing capacity or construction of new vessels that directly and automatically lead to non-compliance by the Member State with Article 22(7) of Regulation (EU) 1380/2013 and the fishing capacity ceilings set out in its Annex II.

(29)

The aid will contribute to a positive effect mentioned in the Communication from the Commission, Pathway to a Healthy Planet for All EU Action Plan ‘Towards Zero Pollution for Air, Water and Soil’, namely improving health and well-being by decontamination of toxic substances, such as asbestos (Paragraph 2.2 of the Action Plan). Incentive effect

(30)

The aid changes the behaviour of the beneficiary in the sense that without the aid, UFA would not engage in the investments supported by the aid, because it has no incentive to make these investments, or it would only have engaged in a restricted or different manner i.e., not under the desired conditions ensuring the preservation of the character of the fish auction building as a national monument (recitals (22) and (34)). The Netherlands explained in that regard that the asbestos removal and renovation of the fish auction building could not lead to any potential revenue for UFA. These investment costs of the renovation project of the fish auction building are high i.e., they are estimated at EUR […]19 according to the business plan that Netherlands submitted (recital (8)), mostly because the fish auction building is a national monument. Since UFA's net turnover in 2021 amounted to

17

OJ L 354, 28.12.2013, p. 22. Regulation (EU) 2021/1139 of the European Parliament and of the Council of 7 July 2021 establishing the European Maritime, Fisheries and Aquaculture Fund (OJ L 247, 13.7.2021, p. 1). 19 Covered by the obligation of professional secrecy. 18

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EUR 4.3 million (recital (14)), these investment costs cannot be covered from UFA's own resources, […]20. Therefore, UFA would not have engaged in these investments under the above desired conditions without the aid from the Municipality. (31)

The Netherlands also submitted that the aid does not improve the financial situation of UFA, because it only covers the additional expenditure which is necessary for the asbestos decontamination and renovation of the fish auction building. Moreover, according to the Netherlands, the aid does not concern operating aid or aid that facilitates the achievement of obligatory standards.

(32)

The Netherlands also confirmed that the renovation works will start upon entry into force of the Development agreement (recital (10)).

(33)

The Development agreement (recital (7)) will include a description of the project or activity, including its start and end dates, the amount of aid needed to carry it out and the eligible costs.

(34)

Since UFA is considered a large enterprise (recital (24)), the Netherlands submitted to the Commission a business plan with a comprehensive description of the investment costs. The Netherlands committed that the granting authority will carry out a credibility check of the counterfactual scenario and confirm that the aid has the required incentive effect. In this respect, the Netherlands explained that after weighing various construction alternatives for the fish auction building, the submitted project design is the best feasible option that takes into account the Municipality’s objective to preserve the character of the fish auction building, as a national monument (recital (22)). Without the contribution of the Municipality the investments supported by the aid would not be undertaken under these desired conditions (recital (30)). Therefore, the counterfactual scenario in this case is that the activities supported by the aid would not be undertaken at all by UFA. […]21.

(35)

In addition, as regards the evaluation of the level of profitability of the investments covered by the aid, the Netherlands explained that the aid will not be used for expanding or increasing the capacity of the UFA fish auction (or in general for improving any UFA activity) or of the port in general. There is no investment in innovative products or working methods that would improve the competitiveness of UFA (recital (24)). The aid will therefore not enable UFA to reduce its costs, nor would it lead to any potential revenue increase for the UFA. Therefore, there is no level of profitability to be evaluated.

(36)

According to the business plan that the Netherlands submitted, the funding gap for the renovation of the fish auction building is EUR […]22. The Municipality will contribute EUR […]23 which is the amount of the aid, and the remaining amount of EUR […]24 is financed by the RCE subsidy as explained in recital (9) above. Moreover, since the investments have no direct impact on the profitability of the fish auctions no operating profits can be expected for UFA.

20

Covered by the obligation of professional secrecy. Covered by the obligation of professional secrecy. 22 Covered by the obligation of professional secrecy. 23 Covered by the obligation of professional secrecy. 24 Covered by the obligation of professional secrecy. 21

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No breach of any relevant provisions of Union law (37)

The Netherlands confirmed that the aid measure does not contravene any provisions of Union law and that the aid measure is compatible with the CFP (recital (26)). Furthermore, the Development Agreement will stipulate that UFA must comply with the rules of the CFP.

(38)

The Netherlands further submitted that the aid: (a)

is not granted in support of fishing activities involving serious infringements under Article 42 of Council Regulation (EC) 1005/200825 or Article 90 of Regulation (EC) 1224/200926 and constituting or supporting illegal, unreported and unregulated (IUU) fishing;

(b)

is not granted in support of the operation, management or ownership of a fishing vessel included in the Union IUU vessel list as referred to in Article 40(3) of Regulation (EC) No 1005/2008, or of a vessel flying the flag of countries identified as non-cooperating third countries as set out in Article 33 of that Regulation;

(c)

complies with the rules laid down in Regulation (EU) 1379/2013 governing the common organization of the market27; and

(d)

does not involve an increase in fishing capacity or construction of new vessels that directly and automatically lead to non-compliance by the Member State with Article 22(7) of Regulation (EU) 1380/2013 on the CFP and the fishing capacity ceilings set out in its Annex II.

(39)

According to the Netherlands, the award of the aid is not subject to the obligation for the beneficiary to use national products or services, or to the restriction to exploit research, development, and innovation results in other Member States. The aid is also not granted for export-related activities.

(40)

The Municipality will incorporate the above conditions into the grant decision. Appropriateness of the aid

(41)

The Netherlands considers that the aid and its design are appropriate to achieve the objective of the measure at which the aid is targeted, which is the facilitation of the fish auctions through the renovation and asbestos decontamination of the fish auction building of the beneficiary UFA. The aid will not be used for expanding or increasing the capacity of the UFA fish auction or in general for improving any activity of UFA (recital (24)).

25

Council Regulation (EC) No 1005/2008 of 29 September 2008 establishing a Community system to prevent, deter and eliminate illegal, unreported and unregulated fishing (OJ L 286, 29.10.2008, p. 1). 26 Council Regulation (EC) No 1224/2009 of 20 November 2009 establishing a Community control system for ensuring compliance with the rules of the common fisheries policy (OJ L 343, 22.12.2009, p. 1). 27 Regulation (EU) No 1379/2013 of the European Parliament and of the Council of 11 December 2013 on the common organisation of the markets in fishery and aquaculture products, amending Council Regulations (EC) No 1184/2006 and (EC) No 1224/2009 and repealing Council Regulation (EC) No 104/2000 (OJ L 354, 28.12.2013, p. 1). 8

Appropriateness among different forms of aid (42)

According to the Netherlands, there is no other alternative less distortive form of aid that could meet the public objective of the Municipality. The investment aid is granted in the form of a direct grant. The Netherlands is of the opinion that other forms of aid are not, or at least are less, appropriate. The costs of the renovation project of the fish auction building are high. Due to the limited financial resources of UFA, it is not possible for UFA to fully finance the investments covered by the aid by itself […]28 (recitals (30) and (34)). This makes a direct grant an appropriate instrument to achieve the objective in question. Proportionality

(43)

According to the Netherlands, the amount of the aid does not exceed the applicable maximum intensity of public aid set out in FIBER and is therefore deemed to meet the principle of proportionality under point (84) of the State aid Guidelines. The maximum aid intensity under Article 29(2) of the FIBER is 50 %. The aid amounts to EUR […]29 of the total investment costs which according to the business plan are EUR […]30, therefore the aid intensity is 32.4 % of the eligible costs.

(44)

The Netherlands also confirmed that the maximum aid intensity and aid amount will be calculated by the granting authority when granting the aid; the eligible costs will be supported by the clear, specific and contemporary documentary evidence that will be verified through reports of an independent auditor (recital (20)); when calculating the aid intensity and the eligible costs, all figures will be taken before any deduction of tax or other charge; that and that value added tax (VAT) is not eligible for the aid.

(45)

Furthermore, according to the Netherlands the aid is limited to the net extra costs of implementing the investment and therefore to the minimum necessary because it only covers the costs for the asbestos decontamination and renovation of the fish auction building and it is below the maximum aid intensity cap of Article 29(2) of the FIBER (recitals (31) and (43)). The counterfactual scenario in this case is that the activities supported by the aid would not be undertaken at all by UFA, because it would simply not be feasible for UFA to finance the investments covered by the aid fully by itself (recital (34)). Moreover, the aid will not enable UFA to reduce its costs, nor would it lead to any potential revenue increase for the UFA. Therefore, there is no level of profitability to be evaluated (recital (35)). In addition, the Netherlands also noted that the RCE subsidy which covers costs for the conservation of national monuments, by its very nature does not create revenue.

(46)

Based on the business plan that the Netherlands submitted the RCE subsidy of EUR […]31 (recital (9)) finances different eligible costs than the costs as explained in detail in recital (21) above. In this context the Netherlands clarified that the RCE subsidy only covers costs for the conservation of national

28

Covered by the obligation of professional secrecy. Covered by the obligation of professional secrecy. 30 Covered by the obligation of professional secrecy. 31 Covered by the obligation of professional secrecy. 29

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monuments, which does not by its very nature create revenue. Therefore, the maximum aid intensity of Article 53(6) GBER must be considered 100%. (47)

According to the Netherlands the total state aid that UFA will receive -including the RCE subsidy- amounts to EUR […]32. Therefore, the total aid intensity including both the aid and the RCE subsidy amounts to 47 % of the eligible costs, which is below the threshold of 50 % of Article 29(2) of the FIBER.

(48)

The Netherlands furthermore confirmed the aid will not be cumulated with payments referred to in the EMFAF regulation in respect of the same eligible costs. Transparency

(49)

3.

The Netherlands committed to publish the information required by point (105) of the State aid Guidelines on in the European Commission’s transparency award module (TAM) database33 after the decision to grant the aid has been taken, to keep for at least 10 years and have it available for the general public without restrictions. The Netherlands also committed to comply with the reporting requirements of Part III, Section 4 of the State aid Guidelines. ASSESSMENT 3.1.

Existence of aid - Application of Article 107(1) TFEU

(50)

The European Parliament and the Council have determined in Article 10(1) of the EMFAF regulation that Articles 107, 108 and 109 TFEU apply to aid granted by Member States to undertakings in the fishery and aquaculture sector. The derogation from the application of these provisions stipulated in Article 10(2) of the same regulation does not apply in the current context because the notified aid is not granted pursuant to that Regulation. Therefore, the aid financed in accordance with the present decision must comply with State aid rules, including those related to the fishery and aquaculture sector, in accordance also with points (17) and (18) of the State aid Guidelines, which are applicable in the present case.

(51)

Pursuant 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.’

(52)

The qualification of a measure as aid within the meaning of this provision therefore requires the following cumulative conditions to be met: (i) the measure must be imputable to the State and financed through State resources; (ii) it must confer an advantage on its recipients; (iii) that advantage must be selective; and (iv) the measure must distort or threaten to distort competition and affect trade between Member States.

(53)

In the present case, the aid is based on an act i.e., the Development agreement between the Municipality and the undertaking UFA, under which aid will be

32

Covered by the obligation of professional secrecy. ‘State Aid Transparency Public Search’, available https://webgate.ec.europa.eu/competition/transparency/public?lang=en 33

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at

the

following

website:

granted to the singe beneficiary identified as UFA (recital (7)). Therefore, the Commission considers that it is ad hoc aid within the meaning of point (31)(b) of the State aid Guidelines. (54)

The aid will be granted by the Municipality based on the Development agreement as described in recitals (8) and (10). The measure is therefore imputable to the State. The aid is financed by the budget of the Municipality of The Hague (recital (8) and therefore it is financed through State resources.

(55)

The measure confers an advantage on its beneficiary in the form of a direct grant (recitals (6), (8) and (10)). The measure therefore relieves the beneficiary of costs that it would have to bear under normal market conditions.

(56)

The advantage granted by the measure is selective, since it is awarded only to a certain undertaking i.e., UFA (recitals (7), (10) and (11)).

(57)

The measure is liable to distort competition since it strengthens the competitive position of its beneficiary. It also affects trade between Member States since UFA is active in the sector of fish auctions, in which intra-Union trade exists.

(58)

In view of the above, the Commission concludes that the measure constitutes State aid within the meaning of Article 107(1) TFEU. 3.2.

(59)

Compatibility of the aid

The aid may only be considered compatible with the internal market if it can benefit from one of the derogations provided for in the TFEU. 3.3.

Application of Article 107(3)(c) TFEU

(60)

Having established that the measure involves aid within the meaning of Article 107(1) TFEU, it is necessary to consider whether the measure can be found to be compatible with the internal market based on the compatibility grounds foreseen by Article 107 TFEU.

(61)

Pursuant to Article 107(3)(c) TFEU the Commission may declare compatible with the internal market aid ‘to facilitate the development of certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions to an extent contrary to the common interest’.

(62)

Therefore, aid compatible under this Treaty provision (i) must contribute to the development of a certain economic activity or of certain economic areas and (ii) must not distort competition to an extent contrary to the common interest.

(63)

The aid is granted to the fishery sector and the Commission will therefore assess its compatibility based on the State aid Guidelines. 3.4.

(64)

Application of the State aid Guidelines

Under point (23) of the State aid Guidelines, where aid benefitting SMEs or large enterprises is of the same kind as aid falling within a category of aid that can be considered compatible with the internal market under one of the Regulations on block exemptions referred to in point (28)(a) of the State aid Guidelines, the Commission will assess the aid taking into account the compatibility assessment 11

under Article 107(3), point (c), TFEU, which are expanded upon in detail in Part I, Chapter 3 of the State aid Guidelines, and the criteria laid down for each category of aid set out in those Regulations. (65)

The aid relates to investments for the asbestos decontamination and the renovation of the fish auction building which are of the same kind as aid falling within Article 29 of the FIBER ‘Aid for fishing ports, landing sites, auction halls and shelters’ (recitals (16), (26) and section 3.4.3).

(66)

Article 29 of the FIBER does not apply to the aid at hand because the thresholds of Article 3 of the FIBER are exceeded (recital (17)).

(67)

According to point (9) of the State aid Guidelines, large enterprises tend to be less affected by market failures than micro, small and medium-sized enterprises (‘SMEs’). Moreover, large enterprises in the fishery and aquaculture sector are more likely to be significant players on the market and, consequently, in specific cases, aid granted to large enterprises may particularly distort competition and trade in the internal market.

(68)

UFA is a large enterprise within the meaning of point (33)(q) of the State aid Guidelines because it is an undertaking not fulfilling the criteria laid down in Annex I to FIBER (recital (12)). As regards the possible distortion of competition the Netherlands demonstrated that any negative effects of the aid on competition is minimal, because the aid aims only at the asbestos decontamination and renovation of the fish auction building and it will not affect the competitive position of the beneficiary in the market (recital (24) and section 3.4.2.5 below).

(69)

In compliance with point (4) of the State aid Guidelines, the Commission will assess whether the aid may be considered compatible with the internal market based on Article 107(3)(c) TFEU. 3.4.1.

First condition: the aid must facilitate the development of an economic activity or certain economic areas 3.4.1.1.

Facilitation of the aided economic activity

(70)

Under Article 107(3)(c) TFEU, the measure must contribute to the development of an economic activity34.

(71)

According to point (40) of the State aid Guidelines, the Member State must demonstrate that the aid aims at facilitating the development of the identified economic activity. The Netherlands consider that the aid will facilitate the fish auctions by increasing the level of environmental protection, improve safety and working conditions and improve the quality of the products landed, by improving the food safety of the fish auctions. By facilitating the auctions, the aid will contribute to the development of the economic activities in the fishery sector. According to point (42) of the State aid Guidelines, Member States must also describe if and how the aid will contribute to the achievement of the objectives of the CFP and, within that policy, to the objectives of the EMFAF and describe more specifically the expected benefits of the aid. The Netherlands explained that the aid aims at asbestos decontamination and the renovation of the fish auction

34

C-594/18 P Austria v Commission EU:C:2020:742 - Hinkley Point C, paras 20 and 24. 12

building as described in recitals (8) and (18) above. The Netherlands also explained that the aid increases the sustainability of the aided economic activity and contributes to the CFP and EMFAF objectives (recitals (25) to (29)). The Commission agrees with the arguments provided by the Netherlands and therefore, the provisions of points (40) to (42) of the State aid Guidelines are complied with. (72)

By enhancing the sustainability of the fisheries sector, the aid genuinely facilitates the development of this sector, thereby contributing to the first objective of the CFP35, namely to ‘ensure that fishing and aquaculture activities are environmentally sustainable in the long term and managed in accordance with the objectives of obtaining positive economic, social and employment benefits and contributing to the security of food supply’; as well as to ‘provide conditions for economically viable and competitive fishing capture and processing industry and land-based fishing related activity’36.

(73)

In view of the above, the Commission considers that the notified aid facilitates the development of an economic activity, as required by Article 107(3)(c) TFEU. 3.4.1.2.

Incentive effect

(74)

Regarding Part I, section 3.1.2 of the State aid Guidelines, as a rule, aid can be found compatible with the internal market if it has an incentive effect. According to recital (30), the Commission considers that the Netherlands demonstrated that the aid changes the behaviour of UFA in the sense that without the aid, it would not engage in the investments supported by the aid, in compliance with point (45) of the State aid Guidelines.

(75)

According to recital (31), the Netherlands also demonstrated that the aid does not intend to improve the financial situation of UFA and does not facilitate the achievement of obligatory standards. The aid aims to undertake investments in the auction hall and therefore it will not cover its pure operating cost. Furthermore, by its very nature, the aid is also unlikely to interfere with the mechanisms regulating the organisation of the internal market. Therefore, the Commission considers that the conditions of points (46) and (47) of the State aid Guidelines are complied with.

(76)

In addition, the Commission notes that the Netherlands demonstrated in recitals (8), (18), (30) and (31) that the aid is only covers the investment costs for the asbestos decontamination and renovation in the fish auction building, which is a national monument, that the UFA could not undertake by itself. Based on these explanations, the Commission considers that UFA could not have undertaken reasonable efforts to minimize the risks resulting from the existence of asbestos in the fish auction building and therefore, the conditions of point (48) of the State aid Guidelines are complied with.

(77)

Moreover, according to recitals (10) and (32), the Development agreement will take effect only after the approval of the aid by the Commission and the renovation works covered by the aid have not started yet, in compliance with points (31)(aa) and (49) of the State aid Guidelines. The Commission considers

35 36

Article 2(1) of CFP-Regulation. Article 2(5) c) of the CFP-Regulation 13

that the Development agreement (recital (7)) also fulfils the conditions of point (50) of the State aid Guidelines (recital (33)). Additional conditions for individually notifiable investment aid (78)

According to point (51) of the State aid Guidelines, large enterprises must describe the situation without the aid, which situation is referred to as the counterfactual scenario or alternative project or activity and submit documentary evidence in support of the counterfactual described in the application. According to point (52) of the State aid Guidelines, the granting authority must carry out a credibility check of the counterfactual and confirm that the aid has the required incentive effect. A counterfactual is credible, if it is genuine and relates to the decision-making factors prevalent at the time of the decision by the beneficiary undertaking regarding the project or activity concerned. According to point (55) of the State aid Guidelines, for individually notifiable investment aid the Member State must provide clear evidence that the aid effectively has an impact on the investment choice, including a comprehensive description of the counterfactual scenario, in which no aid is granted to the beneficiary undertaking by any public authority. In addition, according to point (56) of the State aid Guidelines, Member States are invited to draw up genuine documents, such as internal business plans related to the investment project under assessment, which are contemporary to the decision-making process concerning the investment.

In this context, according to point (57), the level of profitability of may also be evaluated. Finally, according to point (58) of the State aid Guidelines, where no specific counterfactual scenario is known, the incentive effect can be assumed when there is a funding gap. That is the case when the investment costs exceed the net present value (NPV) of the expected operating profits of the investment on the basis of an ex ante business plan.

(79)

The Commission considers that the Netherlands has demonstrated in recital (34) that the counterfactual scenario in the present case would be that the investments covered by the aid would not be undertaken by the beneficiary. In addition, the Netherlands committed that the granting authority will carry out a credibility check of the counterfactual scenario and confirm that the aid has the required incentive effect. It also provided a contemporary and comprehensive description of the investments covered by the aid in an analytical business plan for the renovation of the fish auction building (recitals (8), (18), (30), (34), (36) and (43)). Therefore, the Commission considers that the requirements of points (51), (52), (55) and (56) of the State aid Guidelines are complied with. In addition, in recital (35) the Netherlands demonstrated that the aid will not enable UFA to reduce its costs, nor would it lead to any potential revenue increase for the UFA and that therefore there is no level of profitability to be evaluated under point (57) of the State aid Guidelines. Finally, in recital (36), the Netherlands demonstrated the funding gap for the renovation of the fish auction building in compliance with the requirement of point (58) of the State aid Guidelines.

(80)

Considering the above, the Commission concludes that the aid has an incentive effect in compliance with Part I, section 3.1.2 of the State aid Guidelines.

14

3.4.1.3.

No breach of relevant provisions and general principles of Union law

(81)

According to point (60) of the State aid Guidelines, if a State aid measure, the conditions attached to it, including its financing method when the financing method forms an integral part of such measure, or the activity it finances entails a violation of relevant Union law, the aid cannot be declared compatible with the internal market.

(82)

As explained in recitals (37) and (38), under the notified aid no aid is granted in support of fishing activities involving serious infringements under Article 42 of Regulation (EC) 1005/200837 or Article 90 of Regulation (EC) 1224/200938 and constituting or supporting IUU fishing; or in support of the operation, management or ownership of a fishing vessel included in the Union IUU vessel list as referred to in Article 40(3) of Regulation (EC) 1005/2008, or of a vessel flying the flag of countries,. In addition, the beneficiary must comply with all CFP rules and with the rules laid down in Regulation (EU) 1379/2013 on the common organisation of the market39. Moreover, the beneficiary cannot be involved in an increase in the fishing capacity of vessels or the construction of new vessels that directly and automatically leads to non-compliance by the Member State with Article 22(7) of the Regulation (EU) No 1380/2013 on the CFP40 and the fishing capacity ceilings set out in Annex II to that Regulation. The Commission considers that aid therefore complies with point (61) of the State aid Guidelines.

(83)

The Netherlands has confirmed in recital (39) that the award of aid is not subject to the obligation for the beneficiary undertaking to use national products or services and it does not restrict the possibility for the beneficiary undertaking to exploit the research, development and innovation results in other Member States; and that the aid does not cover export-related activities. Finally, the Netherlands confirmed that the Municipality will incorporate the above conditions into the grant decision. Therefore, the Commission considers that also the requirement of point (64) of the State aid Guidelines is complied with.

(84)

Considering the above, the Commission concludes that the aid does not entail a violation of relevant Union law and therefore point (60) of the State aid Guidelines is complied with.

37

Council Regulation (EC) No 1005/2008 of 29 September 2008 establishing a Community system to prevent, deter and eliminate illegal, unreported and unregulated fishing (OJ L 286, 29.10.2008, p. 1). 38 Council Regulation (EC) No 1224/2009 of 20 November 2009 establishing a Community control system for ensuring compliance with the rules of the common fisheries policy (OJ L 343, 22.12.2009, p. 1). 39 Regulation (EU) No 1379/2013 of the European Parliament and of the Council of 11 December 2013 on the common organisation of the markets in fishery and aquaculture products, amending Council Regulations (EC) No 1184/2006 and (EC) No 1224/2009 and repealing Council Regulation (EC) No 104/2000 (OJ L 354, 28.12.2013, p. 1). 40 OJ L 354, 28.12.2013, p. 22. 15

3.4.2.

Second condition: the aid must not affect trading conditions to an extent contrary to the common interest 3.4.2.1.

Need for State intervention

(85)

According to point (71) of the State aid Guidelines, the Commission considers that the market is not delivering the expected objectives without State intervention concerning aid fulfilling the specific conditions laid down in Part I, Chapter 2, Section 2.3. Therefore, such aid will be considered necessary.

(86)

The aid meets the specific conditions under Part I, Chapter 2, Section 2.3. of the State aid Guidelines, because it of the same kind as aid falling under Article 29 ‘Aid for fishing ports, landing sites, auction halls and shelters’ of the FIBER that can be considered compatible with the internal market, as explained in more detail under section 3.4.3 below.

(87)

The Commission therefore considers that the aid is necessary. 3.4.2.2.

Appropriateness of aid

(88)

According to point (72) of the State aid Guidelines, the proposed aid must be an appropriate policy instrument to facilitate the development of the economic activity. There may be other, better placed instruments, such as regulation, market-based instruments, infrastructure development and improvement in the business environment, to achieve the objectives of the aid. The Member State must demonstrate that the aid and its design are appropriate to achieve the objective of the measure at which the aid is targeted. The Commission considers that the Netherlands demonstrated that the aid is targeted i.e., is aiming at the facilitation of the fish auctions through the renovation and asbestos decontamination of the fish auction building of the beneficiary UFA (recital (41)).

(89)

According to point (73) of the State aid Guidelines, the Commission considers that aid measures which meet the specific conditions laid down in Part I, Chapter 2, Section 2.3 ‘Aid for categories of measures covered by Regulations on block exemptions’ are an appropriate policy instrument. The aid meets the specific conditions under Part I, Chapter 2, Section 2.3. of the State aid Guidelines, because it is of the same kind as aid falling under Article 29 of the FIBER ‘Aid for fishing ports, landing sites, auction halls and shelters’. The Commission therefore considers that the aid is the appropriate policy instrument, because it meets the specific conditions of Article 29 of the FIBER, as explained in more detail under section 3.4.3 below.

(90)

According to point (76) of the State aid Guidelines, aid can be granted in various forms. The Member State should however ensure that the aid is granted in the form that is likely to generate the least distortions of trade and competition. In addition, according to point (77) of the same Guidelines, the Commission considers that aid granted in the form provided for in these Guidelines or in the respective EMFAF intervention in accordance with Regulation (EU) 2021/1139 is an appropriate form of aid. According to point (78) of the same Guidelines, where the aid is granted in forms that provide a direct pecuniary advantage (for example, direct grants), the Member State must demonstrate why other potentially less distortive forms of aid such as repayable advances or forms of aid that are based on debt or equity instruments (for example, low-interest loans or interest rebates, 16

State guarantees or an alternative provision of capital on favourable terms) are less appropriate. The Netherlands demonstrated in recital (42) why a direct grant is the most appropriate form of aid in this case. The Commission can accept these arguments. In addition, the form of the aid is in line with Articles 13(i), 55(1) and Annex III of the EMFAF regulation41, that allows the financing with direct grants of operations improving the infrastructure of fish auction halls. (91)

Therefore, a direct grant can be considered as the most appropriate aid instrument in this case and the conditions of points (76) to (78) of the State aid Guidelines are complied with. 3.4.2.3.

(92)

Proportionality of aid

According to point (80) of the State aid Guidelines, aid in the fishery and aquaculture sector is proportionate, if the aid amount is limited to the minimum needed. Maximum aid intensity

(93)

According to point (84) of the State aid Guidelines, for categories of measures covered by Regulation (EU) 2022/2473, as set out in Part I, Chapter 2, Section 2.3, the principle of proportionality of the aid is deemed to be respected, if the amount of the aid does not exceed the applicable maximum intensity of public aid set out in that Regulation and Annex IV thereto.

(94)

The aid meets the specific conditions under Part I, Chapter 2, Section 2.3. of the State aid Guidelines, because it is of the same kind as aid falling under Article 29 ‘Aid for fishing ports, landing sites, auction halls and shelters’ of the FIBER that can be considered compatible with the internal market, as explained in section 3.4.3 below. More precisely, the aid meets the requirements of the maximum aid intensity rate of Article 29(2) FIBER, as explained in recital (107) below. Additional conditions for individually notifiable investment aid

(95)

41

According to point (94) of the State aid Guidelines, as a general rule, for individually notifiable investment aid to be considered limited to the minimum, the aid amount must correspond to the net extra costs of implementing the investment in the area concerned, compared to the counterfactual scenario in the absence of aid, with maximum aid intensities as a cap. According to point (95) of the same Guidelines, the aid amount should not exceed the minimum necessary to render the project sufficiently profitable, for example, it should not lead to an increase of its Internal Rate of Return (IRR) beyond the normal rates of return applied by the undertaking concerned in other investment projects of a similar kind or, if these rates are not available, to an increase of its IRR beyond the cost of capital of the undertaking as a whole or beyond the rates of return commonly observed in the sector concerned. According to point (97) of the same Guidelines, as regards individually notifiable investment aid, the Commission will verify whether the aid amount exceeds the minimum necessary to render the project sufficiently profitable, as provided in point (95). Calculations used for the analysis of the incentive effect can also be used to assess if the aid is

OJ L 247, 13.7.2021, p. 1. 17

proportionate. The Member State must demonstrate the proportionality based on documentation such as that referred to in point (56). (96)

In recitals (8), (18) and (45) the Netherlands demonstrated that the aid is limited to the net extra costs of implementing the investment and therefore to the minimum necessary because it only covers the costs for the asbestos decontamination and renovation of the fish auction building. In addition, as also explained in recital (80) the counterfactual scenario in the present case would be that the investments covered by the aid would have not been undertaken by the beneficiary, while the Netherlands committed that the granting authority will carry out a credibility check of the counterfactual scenario and confirm that the aid has the required incentive effect. The Netherlands also provided a contemporary and comprehensive description of the investments covered by the aid in an analytical business plan for the renovation of the fish auction building (recitals (8), (18), (30), (34), (36) and (43)) in compliance with point (56) of the State aid Guidelines. In addition, in recital (35) the Netherlands demonstrated that the aid will not enable UFA to reduce its other costs, nor would it lead to any potential revenue increase for the UFA and therefore there is no level of profitability to be evaluated under point (57) of the State aid Guidelines.

In view of the above, the Commission considers that the requirements of points (94), (95) and (97) that are applicable in this case are complied with. Cumulation

(97)

According to point (99) of the State aid Guidelines aid may be granted concurrently under several schemes or cumulated with ad hoc aid, provided that the total amount of State aid for an activity or project does not exceed the aid intensity and aid amount laid down in these Guidelines. According to point (100) of the same Guidelines aid with identifiable eligible costs may be cumulated with any other State aid if those aids concern different identifiable eligible costs. Aid with identifiable eligible costs may be cumulated with any other State aid, in relation to the same eligible costs, partly or fully overlapping, only if such cumulation does not result in exceeding the highest aid intensity or aid amount applicable to this type of aid under those Guidelines. Moreover, according to points (102) and (104), State aid in favour of the fishery and aquaculture sector should not be cumulated with payments referred to in the EMFAF Regulation (EU) 2021/1139 in respect of the same eligible costs, if such cumulation would result in an aid intensity or aid amount exceeding those laid down in the State aid Guidelines.

(98)

The aid will be cumulated with the RCE subsidy (recital (9)). However, there is no risk of funding of the same eligible costs, as explained in recital (46) and the total amount of the aid resulting from this cumulation amounts to 47 %, which is below the maximum aid intensity of 50 % set out in Article 29(2) of the FIBER, as explained in recital (47). According to recital (48) the aid will not be cumulated with payments referred to in the EMFAF regulation in respect of the same eligible costs. Therefore, the requirements of points (99), (100), (102) and (104) of the State aid Guidelines are complied with.

(99)

Based on those elements, the Commission considers that the aid is limited to the minimum necessary.

18

3.4.2.4.

Transparency

(100) Member States must ensure the publication of the information set out in point (105) of the State aid Guidelines in the Commission’s transparency award module or on a comprehensive State aid website at national or regional level. The Netherlands has committed in recital (49) to comply with the transparency requirements under points (105), (107) and (108) of the State aid Guidelines. 3.4.2.5.

Avoidance of undue negative effects on competition and trade

(101) According to point (109) of the State aid Guidelines, aid for the fishery and aquaculture sector may potentially cause product market distortions. For the aid to be compatible with the internal market, the negative effects of the aid in terms of distortions of competition and impact on trade between Member States must be minimised or avoided. The Commission considers that, in principle, where aid fulfils the specific conditions set out in Part I, Chapter 2, Section 2.3, the negative effects on competition and trade are limited to the minimum. (102) The aid meets the specific conditions under Part I, Chapter 2, Section 2.3. of the State aid Guidelines, because it is of the same kind as aid falling under Article 29 of the FIBER that can be considered compatible with the internal market, as explained in section 3.4.3 below. (103) In addition, as explained any negative effects of the aid on competition is minimal, because the aid aims only at the asbestos decontamination and renovation of the fish auction building and it will not affect the competitive position of the beneficiary in the market (recitals (24) and (69)). (104) The Commission therefore considers that the negative effects of the aid on competition and trade are limited to the minimum. 3.4.3.

Specific assessment under Part I, Chapter 2, Section 2.3 of the State aid Guidelines and Article 29 of the FIBER

(105) Article 29 of the FIBER stipulates the following: ‘1. Aid for fishing ports, landing sites, auction halls and shelters fulfilling the conditions laid down in Chapter I of this Regulation shall be compatible with the internal market within the meaning of Article 107(3), point (c), TFEU and shall be exempted from the notification requirement of Article 108(3) thereof provided that: (a) the aid aims to increase the quality, control and traceability of the products landed, increasing energy efficiency, contributing to environmental protection and improving safety and working conditions; (b) the aid covers the following eligible investment costs that: (i) improve the infrastructure of fishing ports, auction halls, landing sites and shelters, including investments in adequate reception facilities for lost fishing gears and marine litter collected from the sea; 19

(ii) facilitate compliance with the obligation to land all catches in accordance with Article 15 of Regulation (EU) No 1380/2013 and Article 8(2), point (b), of Regulation (EU) No 1379/2013 or add value to under-used components of the catch; or (iii) improve the safety of fishers by way of construction or modernisation of shelters. 2. The amount of the aid granted under this Article shall not exceed, in gross grant equivalent, a maximum aid intensity rate of 50 % of the eligible costs. Specific maximum aid intensity rates shall be as set out in Annex IV. Where one operation falls under several of the rows 1 to 11 of Annex IV, the highest maximum aid intensity rate shall apply.’ (106) The aid meets the specific conditions under Part I, Chapter 2, Section 2.3. of the State aid Guidelines, because it is of the same kind as aid falling under the above Article 29 of the FIBER, because it is in line with Article 29(1)(b)(i) of the FIBER, as explained in detail in recitals (8), (18), (19), (22) and (26). (107) In addition, the aid complies with Article 29(2) of the FIBER: as explained in recitals (43) and (44) that the maximum aid intensity is 32.4 % of the eligible costs for the renovation project, which is below the aid intensity of 50 % set out in Article 29(2) of the FIBER. This aid intensity based on the actual costs will be also adequately verified by the granting authority.

Therefore, the condition of Article 29(2) of the FIBER is complied with. (108) The Commission therefore considers that the aid is a FBER-like measure that fulfils the conditions of Part I, Chapter 2, Section 2.3 of the State aid Guidelines in conjunction with Article 29 of the FIBER. 3.4.4.

Other general conditions

(109) The Commission notes that UFA is not an undertaking in difficulty within the meaning of point (31)(bb) of the State aid Guidelines or an undertaking subject to an outstanding recovery order following a previous Commission decision declaring an aid illegal and incompatible with the internal market (recitals (15) a) and b)). Therefore, the conditions of points (10) and (11) of the State aid Guidelines are fulfilled. 3.4.5.