The special provisions, approved as state aid for environmental protection, reduce the full tax rate for electricity and mineral oil to as little as 20%, while other companies have to pay higher taxes than before. They will apply to manufacturing industry, the agriculture and forestry sector and rail transport services.

While the general increase or introduction of energy taxation, as provided for in the Ecotax law, does not represent State aid which has to be approved by the Commission, exemptions from such a general tax in the form of reduced tax rates or refunds may have to be qualified as State aid, if they intend to favour certain undertakings or sectors of industry. The Commission considers that this is in principle the case for the reduced tax rate in the Ecotax law.

The Commission has decided, however, not to raise any objections to the notified measures of the law, since it sees them as being in line with the Community guidelines on State aid for environmental protection, its past practice with regard to similar schemes in other Member States and the environmental policy of the Community.

The Community guidelines on State aid for environmental protection recognise that the introduction of environmental taxes and charges can involve State aid because some firms may not be able to stand the extra financial burden immediately and require temporary relief. Such State aid in the form of relief from environmental taxes may under certain conditions and assessing the case on its merits, be approved in exceptional cases.

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