[1]Opinion of the Advocate-General

Opinion of the Advocate-General

   1. This reference for a preliminary ruling from the Austrian
   Verwaltungsgerichtshof (Administrative Court) raises several issues in
   the field of State aid.

   2. In 1996, Austria granted undertakings engaged in the production of
   goods a rebate of energy tax where the amount of that tax exceeded
   0.35% of the net value of their production, but did not notify the
   measure to the Commission as aid. When in 2001 (2) the Court of Justice
   held that rebate to constitute aid because it was not available to
   service undertakings and was thus selective, the Commission examined
   the measure and decided in 2002 that, for the period from 1996 to 2001,
   it was compatible with the common market; at that stage, the Commission
   did not consider whether the 0.35% threshold might also give rise to
   selectivity. Subsequently, in 2004, it re-examined the aid, which had
   since been extended to service undertakings, but on that occasion
   decided that it was selective by reason of the 0.35% threshold, which
   favoured energy-intensive undertakings, and that it was not compatible
   with the common market for the years 2002 and 2003.

   3. The main proceedings arise out of claims for a rebate submitted by a
   number of service undertakings in respect of the period from 1996 to
   2001, during which the aid in its original form had not been notified.

   4. In those circumstances the national court asks essentially whether,
   for that period, Article 88(3) EC precludes application of the
   provision limiting the rebate to producers of goods, even if the
   Commission has since found the aid to be compatible with the common
   market for that period; and, if so, whether Article 88(3) also requires
   the rebate to be granted to those who were excluded from it even where
   their claims were submitted after the Commission's finding of
   compatibility.

   5. The question of the Commission's ability to approve aid
   retroactively is thus explicitly raised. In addition, it will be
   appropriate to consider the role of national courts in ensuring
   compliance with State aid rules, in particular whether they may render
   unlawful aid lawful by ordering that it be granted non-selectively and,
   if so, subject to what conditions or constraints. Finally, the question
   has been raised in the proceedings before the Court whether the
   Commission's 2004 decision in any way affects its 2002 decision.

   Community rules on State aid

   6. Pursuant to Article 87(1) EC, (3) save as otherwise provided in the
   Treaty, `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 common market.'

   7. Certain types of aid are however automatically compatible under
   Article 87(2) and other types, identified in Article 87(3), may be
   considered compatible with the common market. Of the latter, Article
   87(3)(c) lists `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'. (4)

   8. Article 88(1) EC provides for the Commission to review all measures
   of State aid granted to undertakings. Under Article 88(2), after giving
   the parties concerned an opportunity to submit their comments, the
   Commission may, depending on the view it reaches, require a Member
   State to abolish or alter a particular aid.

   9. Article 88(3) provides:

   `The Commission shall be informed, in sufficient time to enable it to
   submit its comments, of any plans to grant or alter aid. If it
   considers that any such plan is not compatible with the common market
   having regard to Article 87, it shall without delay initiate the
   procedure provided for in paragraph 2. The Member State concerned shall
   not put its proposed measures into effect until this procedure has
   resulted in a final decision.'

   10. Council Regulation (EC) No 659/1999 (5) codifies practice for the
   application of Article 88 EC. It entered into force on 16 April 1999.

   11. Articles 2 to 9 of that regulation concern the procedure regarding
   notified aid. Where the Commission has doubts as to the compatibility
   of an aid measure with the common market, it is to initiate a formal
   investigation procedure, governed by Articles 6 and 7. Where it finds
   that the aid is not compatible with the common market, it is to take a
   `negative decision'.

   12. Articles 10 to 15 concern the procedure regarding unlawful aid -
   that is to say, in this context, aid put into effect in breach of
   Article 88(3) EC. Under Article 10(1) and (2) of the regulation, where
   the Commission has information from any source regarding alleged
   unlawful aid, it is to examine that information without delay. If
   necessary, it is to request information from the Member State
   concerned. Where appropriate, under Article 13(1) the examination is to
   give rise to the initiation of a formal investigation procedure
   governed by Articles 6 and 7.

   13. If the Commission takes a negative decision in those circumstances,
   it is to require the Member State to recover the aid, in accordance
   with Article 14, unless recovery would be contrary to a general
   principle of Community law.

   National proceedings and background

   14. With effect from 1 June 1996, Austria introduced simultaneously (i)
   taxes on the supply and consumption of electricity and natural gas, and
   (ii) a procedure whereby consumer undertakings could claim a rebate of
   a portion of their tax burden which exceeded 0.35% of net production
   value. The right to claim a rebate was however limited to undertakings
   whose activity was primarily the production of goods. (6) I shall refer
   to that arrangement as `the original scheme'.

   15. The Austrian authorities did not regard the original scheme as
   State aid, and therefore did not notify it to the Commission in
   accordance with Article 88(3) EC.

   16. On 10 March 1999, the Austrian Verfassungsgerichtshof
   (Constitutional Court), called upon to decide on the legality of
   refusals to grant a rebate to a number of primarily service
   undertakings, referred two questions to the Court of Justice, asking
   whether the original scheme constituted State aid.

   17. On 8 November 2001 this Court gave judgment in that case, ruling
   essentially that provision for a rebate of energy taxes does not
   constitute State aid if it applies to all undertakings, but must be
   regarded as such if it applies only to undertakings whose activity is
   shown to be primarily the manufacture of goods. (7)

   18. That judgment gave rise to a number of developments.

   19. First, on 13 December 2001, the Verfassungsgerichtshof annulled the
   refusals to grant a rebate for the period 1996 to 2001 to a number of
   parties, including the first two appellants in the proceedings
   underlying the present reference for a preliminary ruling. It concluded
   from the Court's judgment in Adria-Wien that it was permissible to
   grant rebates to production businesses but not to refuse them to other
   businesses on the basis of the provision excluding them, which was to
   be set aside as the sole part of the scheme whose implementation was
   prohibited by Article 88(3) EC as a result of the failure to notify.

   20. Second, by letters of 15 January and 1 March 2002 in response to an
   official request, Austria provided the Commission with details of the
   original scheme. Following examination, the Commission adopted a
   decision on 22 May 2002 (`the 2002 decision'). (8) It noted that the
   scheme was clearly selective, and thus constituted aid, because it
   applied only to production businesses; (9) the Commission therefore
   expressly did not examine whether it was also selective by reason of
   the 0.35% threshold. The Commission then examined the substance of the
   aid in the light of the 1994 Community guidelines on State aid for
   environmental protection, (10) and concluded in particular that the
   original scheme was compatible with point 3.4 of those guidelines, (11)
   to the effect that temporary relief from new environmental taxes may be
   authorised where it is necessary to offset losses in competitiveness,
   particularly at international level. The Commission therefore - while
   `regretting' that the aid had been granted in breach of Article 88(3)
   EC - found the original scheme compatible with Article 87(3)(c) EC.
   That assessment was expressly stated to cover the period from 1 June
   1996 to 31 December 2001.

   21. Third, on 8 October 2002 but with effect from 1 January 2002 the
   Austrian authorities amended the original scheme so that the limitation
   of the right to claim a rebate to production businesses was removed
   (`the amended scheme'). (12) The amendment was notified to the
   Commission, which on 30 April 2003 informed Austria of its decision to
   initiate an investigation procedure.

   22. The appellants in the proceedings underlying the present reference
   for a preliminary ruling are all undertakings whose primary activity is
   the supply of services.

   23. The first two, Transalpine Ölleitung in Österreich GmbH (`TAL') and
   Planai-Hochwurzen-Bahnen GmbH (`Planai') were parties to the previous
   proceedings before the Verfassungsgerichtshof. The refusals to grant
   them energy tax rebates for the periods 1996 to 1998 and 1996 to 1997
   respectively were thus annulled by that court in its judgment of 13
   December 2001. They consequently lodged new claims for a rebate with
   their respective tax authorities, but these were rejected on the basis
   of the 2002 decision. The tax authorities essentially considered that
   decision to have modified, retroactively and with binding force, the
   legal context underlying the Verfassungsgerichtshof's judgment, which
   was therefore no longer relevant to that extent.

   24. The third appellant, Gerlitzen-Kanzelbahn-Touristik GmbH & Co. KG
   (`Gerlitzen'), applied in September 2002 for a rebate in respect of the
   years 1999 to 2001; its claim was similarly rejected.

   25. Planai and Gerlitzen challenged those refusals before the
   Verfassungsgerichtshof, which considered that there was no longer any
   manifest illegality on which it could rule, but which at the
   appellants' request referred the cases to the
   Verwaltungsgerichtshof. (13) TAL for its part appealed directly to the
   Verwaltungsgerichtshof, which on 12 August 2004 referred the following
   questions to the Court for a preliminary ruling:

   `(1) Does the prohibition on putting measures into effect under
   Article 88(3) EC preclude the application of a national legal provision
   which excludes businesses whose activity is not shown to consist
   primarily in the manufacture of goods from energy tax rebates and which
   must therefore be classified as aid within the meaning of
   Article 87 EC, but which was not notified to the Commission prior to
   the national entry into force of the rules, even where the Commission
   has found the measure to be compatible with the common market under
   Article 87(3) EC for a period in the past and the application for
   reimbursement relates to taxes payable for that period?

   (2) If so, in such a case does the prohibition on putting measures into
   effect require a rebate even in cases where the applications were made
   by service businesses after the adoption of the Commission's decision
   for assessment periods prior to that date?'

   26. Meanwhile however, on 9 March 2004, the Commission had adopted a
   further decision concerning the compatibility of the amended scheme for
   the years 2002 and 2003 (`the 2004 decision).' (14)

   27. It considered that the scheme was selective, and thus constituted
   aid, because although in theory applicable to all undertakings reaching
   the threshold of 0.35% of net production value, it was de facto
   tailored to energy intensive users; nor was it consistent with the
   internal logic of the energy tax. (15)

   28. The Commission assessed the aid in the light of the 2001 Community
   guidelines on State aid for environmental protection, (16) in
   particular points 45, 46 (17) and 51 to 53, (18) and considered that
   the aid did not meet the guidelines. There was no evidence that the tax
   had an appreciable positive impact in terms of environmental protection
   or that the rebate had become necessary as a result of a significant
   change in economic conditions that placed the undertakings concerned in
   a particularly difficult competitive situation; the tax had not been
   significantly increased; the rebate was neither limited to 50% of the
   extra costs nor degressive; finally, there was no evidence that
   undertakings paid a significant proportion of the tax. (19)

   29. The Commission thus found the amended scheme incompatible with the
   common market, and required Austria to abolish it.

   30. Nevertheless, in accordance with Article 14(1) of Regulation No
   659/1999, it did not require the aid to be recovered in so far as
   recovery might infringe legitimate expectations. In particular, it
   stated that `it is conceivable that ... the wording of the Court's
   answer ... in Adria-Wien may have led some beneficiaries to believe in
   good faith that the national measures at issue before the national
   court would cease to be selective, and therefore cease to constitute
   State aid, if their benefit were extended to sectors other than the
   manufacture of goods'. (20)

   31. In their written and oral observations TAL, Planai, Austria and the
   Commission have discussed not only the national court's questions as
   referred (or as the parties consider they should have been referred)
   but also the significance of the Commission's 2004 decision concerning
   the amended scheme.

   Assessment

   32. It may be appreciated from that outline that the issues explicitly
   raised in this case are conditioned to some extent by other underlying
   questions.

   33. It seems to me important to bear in mind the basic question to
   which the Verwaltungsgerichtshof needs an answer in the context of the
   proceedings before it: as a matter of Community law, to what extent is
   it authorised and/or required to disapply the national provision
   limiting entitlement to a rebate to undertakings producing goods?

   34. I propose to examine that question in several steps.

   The position before the 2002 decision

   35. The first step is to consider what the position was during the
   period from the introduction of the original scheme to the adoption of
   the 2002 decision.

   36. During the whole of that period, the rebates granted under the
   original scheme constituted unnotified aid.

   37. Consequently, the Austrian authorities were precluded by Article
   88(3) EC from putting the aid into effect.

   38. They none the less did so, in the belief that it constituted a
   general measure.

   39. Once the Court's judgment in Adria-Wien had established that the
   rebate was indeed selective and thus constituted aid, the normal course
   of action incumbent on the Austrian authorities should have been to
   recover it.

   40. They did not do so, but proceedings were brought in the Austrian
   courts before the Commission had examined the compatibility of the aid
   with the common market.

   41. In those circumstances, as the Court recalled in Adria-Wien , (21)
   national courts are involved in the system for the review of State aid
   through the direct effect attributed to the prohibition on
   implementation of planned aid laid down in the last sentence of Article
   88(3) EC. They must offer to individuals the certain prospect that all
   appropriate conclusions will be drawn from an infringement of that
   provision, in accordance with their national law, as regards the
   validity of measures giving effect to the aid, the recovery of
   financial support granted in disregard of that provision and possible
   interim measures.

   42. Or, as the Court expressed it more recently in Streekgewest
   Westelijk Noord-Brabant : (22)

   `It is for the national courts to uphold the rights of the persons
   concerned in the event of a possible breach by the national authorities
   of the prohibition on putting aid into effect. Where such a breach is
   invoked by individuals who may rely on it and is established by the
   national courts, the latter must take all the consequential measures
   under national law.'

   43. Those statements are based on the very clear position that the
   final sentence of Article 88(3) EC is `the safeguard of the review
   machinery established by that article which, in turn, is essential for
   protecting the proper functioning of the common market.' (23)

   44. Thus in the period before the adoption of the 2002 decision it was
   incumbent on the Austrian courts to protect the rights of those
   concerned by drawing all appropriate conclusions from the fact that the
   original scheme was put into effect in breach of Article 88(3) EC, and
   by taking all consequential measures under national law.

   45. But the question in the present case is how those courts should act
   now, and in that connection it must be considered what effects the
   Commission's 2002 and 2004 decisions may have had.

   Effect of the 2002 decision

   46. The next question is thus whether, as the Austrian tax authorities
   apparently believe, the Commission's 2002 decision finding the original
   scheme compatible with the common market, by virtue of Article 87(3)(c)
   EC, for the period from 1 June 1996 to 31 December 2001, affected the
   legal situation deriving from the fact that the scheme was put into
   effect in breach of Article 88(3) EC.

   47. It follows from the Court's consistent case-law that the answer
   must be no.

   48. When the Commission is aware of State aid which has not been
   notified, it must examine the compatibility of that aid with the common
   market and is not entitled to find it incompatible solely on the ground
   that the obligation to notify was not complied with. (24)

   49. However, the decision which the Commission takes in those
   circumstances `does not have the effect of regularising ex post facto
   implementing measures which were invalid because they had been taken in
   breach of the prohibition laid down by the last sentence of Article
   [88(3) EC], since otherwise the direct effect of that prohibition would
   be impaired and the interests of individuals, which are to be protected
   by national courts, would be disregarded. Any other interpretation
   would have the effect of according a favourable outcome to the
   non-observance of that provision by the Member State concerned and
   would deprive it of its effectiveness'. (25)

   50. Indeed, if, for any particular aid plan, whether compatible with
   the common market or not, failure to comply with Article 88(3) EC
   carried no greater risk or penalty than compliance, the incentive for
   Member States to notify and await a decision on compatibility would be
   greatly diminished - as would, consequently, the scope of the
   Commission's control.

   51. That necessary conclusion from the system of the State aid rules in
   the Treaty is not in my view called into question by the statement of
   the Court of First Instance in RJB Mining (26) that the obligation on
   the Commission to make an ex post facto assessment necessarily means
   that it has the power to give ex post facto approval to aid paid prior
   to authorisation. That statement, although it referred to the situation
   under what is now Article 88(3) EC, did so by way of illustration only,
   since the issue which the Court of First Instance had to deal with
   concerned the different rules under the ECSC Treaty and the code of aid
   to the coal industry adopted thereunder. I do not think that it can
   prevail over the very clear statements of the law by the Court of
   Justice, which are a necessary corollary to the effectiveness of the
   prohibition contained in Article 88(3) EC.

   52. It might none the less be wondered what purpose is served by the
   requirement on the Commission to reach a decision on the compatibility
   of unnotified aid, if that decision cannot cure the initial
   unlawfulness entailed by the failure to notify.

   53. First, if the aid is of a continuing nature the decision, whatever
   its content, will produce full effects for the future. In the present
   case, if the Austrian authorities had not decided to amend the scheme
   as from 1 January 2002, the Commission's findings with regard to the
   period up to 31 December 2001 could presumably have been valid for the
   following period also - a somewhat ironic hypothesis, in the light of
   the 2004 decision.

   54. Second, an assessment by the Commission of a particular type of
   aid, even if that aid is no longer current, will assist Member States
   in determining whether future planned aid of the same type is
   permissible.

   55. Third, the procedural consequences could still change as a result
   of the Commission's decision, even with regard to the period before it
   was adopted. Where aid has been put into effect in breach of Article
   88(3) EC, national courts must draw the appropriate conclusions from
   that illegality, as stated above. What those conclusions may be is a
   point which I shall address in greater detail below. (27) Any options
   available will however be limited to recovery of the aid if that is
   what the Commission requires in its final decision. (28)

   56. There is therefore no reason to consider that, in the present case,
   the Commission's 2002 decision, which found the disputed aid compatible
   with the common market and thus did not require its recovery, affected
   the powers or duties of the Austrian courts in drawing the appropriate
   conclusions from the fact that, prior to the decision, the original
   scheme was put into effect in breach of Article 88(3) EC.

   The effect of the 2004 decision

   57. A further question which has been mooted in the course of the
   proceedings is whether the Commission's 2004 decision finding the
   amended scheme incompatible with the common market has any
   repercussions on the validity of its 2002 decision finding the original
   scheme compatible, given that the aspects on which the Commission based
   its second assessment do not appear to differ materially as between the
   two versions of the scheme.

   58. I consider that there are no such repercussions.

   59. The 2002 decision was adopted on the basis of the 1994 guidelines
   on State aid for environmental protection, while the 2004 decision was
   adopted on the basis of the 2001 guidelines. (29) The latter were
   adopted in particular to take account of increasingly frequent and
   increasingly varied grants of aid in the energy sector, especially in
   the form of tax reductions and exemptions. (30) The content of the two
   sets of guidelines differs considerably. In particular, the section on
   operating aid in the 1994 guidelines comprises three paragraphs
   occupying less than half a page of the Official Journal , whereas the
   equivalent section in the 2001 guidelines includes points 42 to 67,
   some three and a half pages of the Official Journal . The criteria on
   which the Commission based its finding of incompatibility in its 2004
   decision are to a large extent absent from the 1994 guidelines. In
   those circumstances, it does not seem to me possible to consider that
   the assessment in the 2004 decision casts any doubt on that in the 2002
   decision.

   60. That does not however mean that the findings in the 2004 decision
   can be of no relevance to the assessment of the situation in the period
   1996 to 2001 and must be disregarded even when they relate to aspects
   which did not change as between the original and amended schemes. In
   particular, I consider that the finding that the scheme was selective
   also by reason of the threshold of 0.35% of net production value may be
   of some importance. (31)

   Appropriate consequences

   61. The appropriate consequential measures to be taken by the national
   courts are not in principle dictated by Community law but depend on the
   kinds of remedy available in domestic law. (32)

   62. The appropriate course of action may depend on the nature of the
   aid - whether it takes the form of, for example, a subsidy or an
   exemption from a levy. It may depend in part also on national
   procedural constraints, and on the type of remedy actually sought in a
   particular case. Furthermore, the granting of one type of remedy in one
   case is likely to preclude the subsequent granting of another type of
   remedy in other proceedings if a coherent result is to be achieved.

   63. In so far as possible, however, whatever action is taken should be
   such as to achieve the aim of negating the unlawfully granted aid or at
   least its effects, of guaranteeing the effectiveness of Article 88(3)
   EC and protecting the rights of affected third parties.

   64. Thus, in the case of a selective tax rebate such as the one in
   issue, an obvious option might be to set aside the whole measure or set
   of measures establishing the rebate, which would presumably entail
   repayment of such rebates as had already been granted, and thus
   recovery of the aid.

   65. In that regard, I disagree with the Commission's position that
   following the 2002 decision the aid was no longer to be recovered. That
   position is at odds with the case-law on the effectiveness of Article
   88(3) EC, in particular Van Calster , as I have explained above. (33)

   66. Another possibility could be an award of damages to those to whom
   the rebate was not available under the rules put into effect.

   67. The type of remedy envisaged in the present case is that of setting
   aside the provisions which render the energy tax rebate selective, thus
   making it possible for other economic operators to claim a rebate.

   68. The rationale for that course of action is clearly that, as
   confirmed in Adria-Wien , a rebate does not constitute State aid if it
   applies to all undertakings in national territory. By removing the
   selectivity condition and making rebates available to all undertakings,
   the Austrian courts aim to negate the aid.

   69. However, that course of action is open to two types of objection.

   70. First, it seems that the Austrian courts have only envisaged
   setting aside that part of the legislation which confines the right to
   claim a rebate to production undertakings, although another provision
   also renders the rebate selective on different grounds: the threshold
   of 0.35% of net production costs.

   71. If the courts have not envisaged setting aside the latter provision
   also, that may be simply because no appropriate claims have been
   brought before them. It may also be relevant that the effect of the
   0.35% threshold was not examined by the Court of Justice in Adria-Wien
   or by the Commission in its 2002 decision.

   72. Yet it seems likely that the original scheme was selective in that
   regard too. The Commission's reasoning in its 2004 decision is
   convincing as regards the selective nature of the 0.35% threshold in
   the amended scheme, and there is nothing in that decision or in the
   case-file to suggest that the differences between the original scheme
   and the amended scheme are such that only the latter was selective on
   that ground.

   73. Thus, as the Commission points out, to grant rebates only to
   service undertakings (in addition to production undertakings) not
   excluded by the 0.35% threshold would be simply to enlarge the circle
   of beneficiaries of the aid. It would not however deprive the aid of
   its effects as such, since a criterion of selectivity would remain.

   74. Care must therefore be taken by the national courts to ensure that
   whatever remedies they grant are such as in fact to negate the effects
   of the aid granted in breach of Article 88(3) EC (34) and not merely to
   extend it to a further, but still limited, class of beneficiaries.

   75. Second, a more general objection can be made. The Commission refers
   to the Court's statement in Banks (35) to the effect that the
   impossibility of recovering aid in the form of an exemption from a levy
   cannot lead to other operators being retrospectively exonerated from
   that levy: `Persons liable to pay an obligatory contribution cannot
   rely on the argument that the exemption enjoyed by other persons
   constitutes State aid in order to avoid payment of that contribution.'
   It cites also the judgments in EKW , Idéal Tourisme , and Sea-Land
   Service (36) in support of that proposition, and concludes from it that
   allowing all undertakings to claim a rebate may not be an appropriate
   solution under Community law.

   76. It does indeed seem to me open to doubt, on a number of grounds,
   whether the principle which requires national courts to ensure recovery
   of unnotified aid regardless of any subsequent authorisation can also
   justify allowing other undertakings to claim the benefit of the same
   aid.

   77. First, the last sentence of Article 88(3) EC lays down what is
   essentially a negative, or standstill, obligation. The aim is to ensure
   that aid is not granted until the Commission has judged it compatible
   with the common market, not to require national authorities and courts
   to eliminate such features as in their judgment confer the character of
   aid on a measure.

   78. Second, the powers conferred on the Commission itself in the case
   of unlawful (that is to say, unnotified) aid are limited, by Article 14
   of Regulation No 659/1999, to requiring recovery. The possibility of
   requiring the Member State to alter the aid, pursuant to Article 88(2)
   EC, is thus explicitly excluded by the regulation in such cases, and
   may be thought to be already implicitly excluded by the scheme of
   Article 88 EC. It would seem strange if the powers of national courts
   in the essentially preventive context of Article 88(3) EC were to
   exceed those conferred on the Commission following a substantive
   assessment.

   79. Third, the aim of Articles 87 and 88 EC is to prevent distortions
   of competition affecting trade between Member States. An extension of
   the circle of beneficiaries to all undertakings in a Member State does
   not remove such distortion but on the contrary widens its scope.

   80. Fourth, even if such an extension were otherwise justifiable, a
   judicial route does not seem the most suitable for achieving it
   effectively. It may easily be the case that not all possible `extended
   beneficiaries' will seek, or obtain, judicial or administrative
   redress, or be affected by whatever measures are taken in that context.
   Indeed, as will be seen from the subsequent discussion, (37) it may be
   difficult to establish who will have standing to make a claim. If any
   such extension were envisaged, then legislation, rather than judicial
   action, would seem a more appropriate option.

   81. Fifth, a feature of the notification and standstill obligation in
   Article 88(3) EC, in conjunction with the obligation of recovery
   pursuant to Article 14 of Regulation No 659/1999, is that the threat of
   such recovery gives beneficiary undertakings an incentive to verify
   that the aid which they receive is notified to the Commission. If the
   most they could fear were that competitors in their own Member State
   might also benefit from the aid, that incentive, and with it the system
   of monitoring aid, would be weakened.

   82. Sixth, whilst it may therefore appear sensible that recovery of
   unnotified aid be ordered even following a finding that the aid is
   compatible as it stands, it is difficult to see what purpose would be
   served by extending the aid, either in those circumstances or pending a
   decision as to compatibility.

   83. Finally, although on a rather different level, a practical
   consideration in the present case may be that an extension of the
   rebate to all undertakings in Austria would be likely to have
   considerable consequences for the system of energy taxes and even
   perhaps for State finances, so that other remedies might be more
   appropriate on that ground.

   84. Admittedly, other arguments can be marshalled against limiting the
   role of the national courts to ordering recovery of the aid granted in
   this case rather than allowing other undertakings also to claim a
   rebate.

   85. First, it might be thought from the Court's statements on the role
   of national courts in the event of a breach of Article 88(3) EC that
   the remedies to be granted are those determined by national law; by
   stating that those courts must take `all appropriate measures', the
   Court might be taken to imply that such measures cannot be limited to
   one kind. However, the measure must be appropriate; and, for the
   reasons given above, extension of the rebate does not seem appropriate
   as a remedy under Article 88(3) EC.

   86. Second, in some circumstances - if aid cannot in fact be recovered,
   for example - the most appropriate measure might be thought to be an
   award of damages in favour of a competitor adversely affected by the
   aid, and it might seem difficult to distinguish in economic terms
   between such an award and an extension of the right to receive the aid.
   Yet there is an economic difference, since the amount of compensation
   required to make good any damage incurred is unlikely to be equal to
   the amount of the rebate not received, and the two remedies are
   manifestly different in legal terms - an award of damages has no
   connection with the direct effect of Article 88(3) EC.

   87. Third, in the present case, the judgment in Adria-Wien might be
   taken to approve - albeit tacitly - the course which the
   Verfassungsgerichtshof was envisaging and of which the Court of Justice
   was fully aware. That seems in any event to have been the conclusion
   drawn and acted upon not only by the appellants in the main proceedings
   (and no doubt by others in a similar situation), but also by both the
   Verfassungsgerichtshof and the Verwaltungsgerichtshof. None the less,
   it is difficult to draw any conclusion from that, since the issue was
   not even raised in Adria-Wien .

   88. Accordingly, I find the reasons for ruling out an extension of the
   circle of beneficiaries of unnotified aid by judicial remedy
   considerably more compelling than those for allowing such extension.
   The latter course of action seems at odds with the scheme of the
   Community State aid rules, in particular with the fundamental aims of
   ensuring that aid is not granted until it has been declared compatible
   with the common market, and that it is not granted at all if it may
   lead to distortion of competition in trade between Member States.

   89. At this stage I thus reach the view that, in respect of the period
   covered by the original scheme, the Austrian courts remain required to
   grant in appropriate cases such remedies as may achieve the aim of
   negating the aid put into effect in breach of Article 88(3) EC, or at
   least its effects; and that neither the extent of their duties in that
   regard nor the range of remedies which they may grant is affected by
   the Commission's 2002 or 2004 decision. However, that range of remedies
   does not include allowing undertakings excluded from the original
   scheme to claim a rebate.

   90. If on the other hand the Court should consider such a remedy
   permissible, it must be open to all economic operators concerned and
   not merely to those qualifying on the basis of the 0.35% threshold.
   Moreover, when reaching their decision the national courts should take
   account of the very considerable economic consequences likely to ensue
   from such a course of action.

   Individual standing to claim a rebate

   91. It remains in any event to be considered which parties might be
   entitled to bring proceedings in order to protect their rights.

   92. The Austrian Government and the Commission submit that the
   appellants in the main proceedings and other comparable claimants are
   not concerned by the rebates granted to production undertakings, and
   that no rights under Community law have been infringed. As service
   undertakings, they were not in competition with production undertakings
   which received a rebate; they did not have to pay any charge or
   contribution levied specifically for the purpose of financing the
   rebates; (38) and the energy tax which they had to pay was not itself
   contrary to Community law.

   93. In that regard, it is in principle for national law to determine an
   individual's standing and legal interest in bringing proceedings;
   Community law merely requires that the national legislation does not
   undermine the right to effective judicial protection. (39)

   94. The question of standing, in particular in so far as it is based on
   the existence of a competitive relationship, is thus a matter for the
   national court to determine, in principle on a case-by-case basis.

   95. However, it does not seem to me at all obvious that, as Austria and
   the Commission argue, undertakings excluded from the benefit of the
   rebate cannot be in competition with those able to claim it.

   96. In the original scheme the criterion distinguishing production from
   service undertakings is that of activity consisting primarily in the
   production of goods. Therefore, two undertakings which both produce the
   same goods and both provide the same services may be in direct
   competition over the whole range of their activities, yet receive a
   rebate or not depending on their primary activity. Other cases of
   partial competition will be considerably more frequent, and distortion
   will arise even if entitlement to a rebate is not determined by
   activity in the sector in which the undertakings are in competition. In
   any event, there may be areas in which certain services are a
   substitute for, and thus in competition with, certain goods. And
   clearly undertakings disqualified by the 0.35% threshold are likely to
   be in competition with others not so disqualified. Furthermore, to the
   extent that some beneficiaries are in (even partial) competition with
   some non-beneficiaries, the latter will be in (even partial)
   competition with other non-beneficiaries, generating a `ripple effect'
   reaching all economic operators.

   97. If it can be established that, as a result of aid put into effect
   in breach of Article 88(3) EC, an undertaking has suffered a
   disadvantage in comparison with another undertaking - and that will
   always be the case where one has benefited from a rebate and the other
   has not - and that the two are in competition - a situation which is
   likely to be general as a result of the ripple effect just mentioned -
   then it seems to me that the first undertaking must enjoy rights under
   Community law which national courts must protect.

   98. If it follows from those considerations that all undertakings in
   national territory have standing to challenge refusals to grant them a
   rebate, that is consistent with the condition expressed above that the
   courts should not, by a limited extension of the right to claim a
   rebate, merely enlarge the circle of beneficiaries rather than negate
   the effects of the aid.

   99. However, the significance of that conclusion depends on whether
   annulment of provisions limiting the circle of those entitled to a
   rebate is considered a permissible remedy, and I have expressed my view
   that it is not.

   Time-limits

   100. The Verwaltungsgerichtshof in its second question raises the issue
   of whether a claim for a rebate brought by an undertaking excluded from
   the original scheme should be treated differently depending on whether
   it was lodged before or after the 2002 decision.

   101. That issue arises only if it follows from Article 88(3) EC that a
   rebate must be granted to those excluded from the original scheme.

   102. I have in any event made it clear that the 2002 decision has in my
   view no effect on the powers and duties of the national courts, and
   thus on the situation of individual claimants before them, with regard
   to claims concerning the period during which the aid had not been
   notified or finally approved and the Austrian authorities were thus
   prohibited from putting it into effect.

   103. However, the question of time-limits for bringing proceedings -
   whatever their nature - might none the less arise, particularly since
   nearly 10 years have now elapsed since the introduction of the energy
   taxes and the rebate scheme.

   104. It may be noted that uncertainty as to the nature of the scheme
   and as to the rights that could be invoked in relation to it was
   broadly dispelled by the Court's judgment in Adria-Wien and the
   Verfassungsgerichtshof's subsequent judgments in December 2001, only to
   gather again as a result of the Commission's 2002 decision and the
   Austrian tax authorities' second round of refusals to grant rebates.

   105. Moreover, the selective nature of the 0.35% threshold, which the
   Court might have been believed to have ruled out in the Adria-Wien
   judgment, (40) was not established by the Commission until its 2004
   decision.

   106. The rights of many claimants or potential claimants will thus not
   be certain until the Court of Justice has given its ruling in the
   present case and the Verwaltungsgerichtshof has delivered judgment in
   the main proceedings.

   107. In those circumstances, it might be appropriate to consider that
   one or more of the events just listed should cause time to start
   running again for the purpose of bringing proceedings. Indeed, it
   appears from what was said at the hearing by counsel for TAL and Planai
   that, following the Verfassungsgerichtshof's judgments in 2001, the
   Austrian authorities extended the deadline for applying for a rebate.

   108. The decision on that point is a matter for the national courts in
   accordance with national law. However, they must bear in mind that
   national rules may not render the exercise of rights conferred by
   Community law in practice impossible or excessively difficult, nor may
   they be less favourable than those relating to comparable claims based
   on domestic law.

   Conclusion

   109. In view of all the foregoing considerations, I am of the view that
   the Court should answer the questions raised by the
   Verwaltungsgerichtshof as follows:

   Where a national measure providing for a tax rebate is selective in
   that it benefits only certain undertakings and must therefore be
   classified as aid within the meaning of Article 87 EC, and where, in
   breach of Article 88(3) EC, that measure was not notified to the
   Commission prior to its entry into force, national courts are required
   to grant such remedies as will negate the unlawfully granted aid, or at
   least its effects, and protect the rights of affected third parties.

   Neither the extent of their duties in that regard nor the range of
   remedies which they may grant is affected, in respect of the period
   during which the aid was unlawfully put into effect in breach of
   Article 88(3) EC, by a subsequent Commission decision finding the aid
   compatible with the common market.

   However, that range of remedies does not include allowing undertakings
   excluded from the original scheme to claim a rebate.

   (1) .

   (2)  - Case C-143/99 Adria-Wien Pipeline [2001] ECR I-8365.

   (3)  - Articles 87 and 88 EC were, prior to the entry into force of the
   Amsterdam Treaty on 1 May 1999 and thus during a large part of the
   material period in the present case, Articles 92 and 93 of the EC
   Treaty. I shall however use the new numbering throughout; although some
   changes were made when Article 92 became Article 87, there is no
   difference material to the present case between the two versions.

   (4)  - As Article 93(3) of the EC Treaty, it also covered other types
   of aid not relevant to the present case.

   (5)  - Of 22 March 1999 laying down detailed rules for the application
   of Article 93 of the EC Treaty (OJ 1999 L 83, p. 1).

   (6)  - For a slightly more detailed account, see Adria-Wien, cited in
   footnote 2, at paragraphs 3 to 8 of the judgment and points 2 to 7 of
   the Opinion of Advocate General Mischo.

   (7)  - Adria-Wien , cited in footnote 2.

   (8)  - C (2002) 1890 final; State aid NN 165/2001 - Austria.

   (9)  - The Commission's assumption that it extended to producers in the
   primary sectors of agriculture, forestry and fisheries does not appear
   entirely consistent with the use in Adria-Wien of the term `manufacture
   of goods' (`fabrication de biens corporels' in French; for `Herstellung
   von körperlichen Gütern' in the Austrian legislation), but does not
   affect the fact that service businesses were excluded.

   (10)  - OJ 1994 C 72, p. 3.

   (11)  - Namely, the section entitled `Operating aid'.

   (12)  - Bundesgetsetz Nr 158/2002, BGBl. I 1643.

   (13)  - For an explanation of the national procedural situation, see
   Adria-Wien , cited in footnote 2, paragraph 15.

   (14)  - Commission Decision of 9 March 2004 on an aid scheme
   implemented by Austria for a refund from the energy taxes on natural
   gas and electricity in 2002 and 2003 (notified under document number
   C(2004) 325) (OJ 2005 L 190, p. 13).

   (15)  - Points 45 to 55 of the decision, in particular points 46 and
   53.

   (16)  - OJ 2001 C 37, p. 3.

   (17)  - In the section on `all operating aid to promote ... energy
   saving'.

   (18)  - In the section on `all operating aid in the form of tax
   reductions or exemptions'.

   (19)  - Points 56 to 59 of the decision, in particular points 57 and
   58.

   (20)  - Point 66 of the decision.

   (21)  - At paragraphs 26 and 27, citing Case C-354/90 Fédération
   Nationale du Commerce Extérieur des Produits Alimentaires and Syndicat
   National des Négociants et Transformateurs de Saumon ( `FNCE' ) [1991]
   ECR I-5505, paragraph 12.

   (22)  - Case C-174/02 [2005] ECR I-0000, paragraph 17.

   (23)  - Adria-Wien , paragraph 25.

   (24)  - See for example Case C-301/87 France v Commission ( `Boussac' )
   [1990] ECR I-307, paragraphs 21 to 23, and FNCE , cited in footnote 21,
   paragraphs 13 and 14.

   (25)  - FNCE , paragraph 16; Joined Cases C-261/01 and C-262/01 Van
   Calster and Others [2003] ECR I-12249, paragraph 63.

   (26)  - Case T-110/98 RJB Mining v Commission [1999] ECR II-2585,
   paragraph 78.

   (27)  - At point 61 et seq. below.

   (28)  - Without prejudice, of course, to possible interim measures
   preventing the granting of aid not yet put into effect, which is a
   different situation.

   (29)  - The 2001 guidelines were already in force at the time of the
   2002 decision but, pursuant to point 82 thereof, were not to be applied
   to unnotified aid granted prior to their publication.

   (30)  - See point 2 of the 2001 guidelines, cited above in footnote 16.

   (31)  - See point 69 et seq. below.

   (32)  - See, for example, point 4 of the operative part in Case 120/73
   Lorenz [1973] ECR 1471 (and in the three subsequent cases decided by
   the Court on the same day).

   (33)  - Point 46 et seq.

   (34)  - Bearing in mind that this case concerns only the aid granted up
   to the end of 2001, and not the notified aid covered by the 2004
   decision.

   (35)  - Case C-390/98 [2001] ECR I-6117, paragraph 80.

   (36)  - Case C-437/97 EKW and Wein & Co. [2000] ECR I-1157, paragraphs
   51 to 53, Case C-36/99 Idéal Tourisme [2000] ECR I-6049, paragraphs 26
   to 29 (both cases cited also in Banks ) and Joined Cases C-430/99 and
   C-431/99 Sea-Land Service and Nedlloyd Lijnen [2002] ECR I-5235,
   paragraphs 45 to 48 (which itself cites Banks as authority).

   (37)  - See point 91 et seq.

   (38)  - See Van Calster , cited in footnote 25, paragraph 54.

   (39)  - Joined Cases C-87/90 to C-89/90 Verholen and Others [1991] ECR
   I-3757, paragraph 24; Case C-13/01 Safalero [2003] ECR I-8679,
   paragraph 50; Streekgewest , cited in footnote 22, paragraph 18.

   (40)  - See point 30 above.

References

   1. file:///tmp/lynxXXXXUH1cWF/L97785-8103TMP.html#OP