EC Authorises Aid For Port-Handling Firms

by Carla Johnson, Investors Offshore.com, London

27 February 2008

The European Commission this week authorised a reduction in excise duty on diesel fuel used by German port handling companies, in line with Community rules on State aid. The rate of excise duty will therefore fall from 47.040 to 6.135 euro cents per litre for these activities.

According to the German authorities, the cost of this measure to the budget will be EUR25m a year.

Altough the Commission and the Community courts have always considered reductions in excise duty which apply to only one business sector to be state aid, the new environmental aid guidelines approved by the Commission on 23 January 2008 allow the Commission to authorise aid in the form of lower excise duties on energy products, subject to compliance with the minimum rates of taxation provided for in Community legislation.

The measure notified by Germany complies with the minimum rates of taxation laid down in Directive 2003/96/EC on energy taxation.

The Commission has concluded, on the basis of the new guidelines, that the aid is compatible with the common market.

The decision adopted by the Commission will enable the German authorities to apply the notified measure when the new guidelines enter into force.

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