Global Trade Alert

On the 22 November 2011, Germany notified the EC that it has the intention to provide regional investment aid to Masdar PV GmbH under the Guidelines on National Regional Aid 2007-2013.
 
The reason for this state aid is "to support regional development and employment by providing regional aid, for the extension of a production plant for thin-film solar panels" ( para. 3 , letter EC to Germany - Brussels 08.05.2012).
 
Masdar PV GmbH is a company producing solar panels, established in 2008. The company is owned by Abu Dhabi Future Energy Company (ADFEC). Madsar PV already received state aid in 2008 (N 545/2008) for a first production line. Germany supported this project with EUR 28.6 million.
 
The notified aid will be used for the construction of "Madsar PV II" (a second production line for thin-film modules next to the existing facility). The new facility is considered to create at least 100 additional jobs. The costs amount to EUR 120.2 million. Germany intends to cover EUR 12.9 million, confirming to the EC that this amount will not be exceeded.
 
The state aid is to be granted in the form of a direct grant and an investment premium, while the latter will be granted on the basis of the "Investitionszulagengesetz 2010" (Law of investment premiums).
 
The EC argues that "the financial support will be given in the form of ... a direct grant. The support can thus be considered as given by the Member State... within the meaning of article 107(1) TFEU." (par. 34) Furthermore, the EC states that "The financial support will relieve Masdar from costs which it normally would have had to bear itself and therefore the company benefits from an economic advantage." Hence
'The financial support concerns the production of solar modules. Since these products
are subject to trade between Member States, the support given is likely to affect such trade.' (par 36-38, letter EC to Germany, Brussels 08.05.2012 c(2012) 3004 final)
 
Germany argues that the direct grant as well as the investment premium are both in conformity with article 8 of the Block Exemption Regulation for regional investment aid (RAG BER) respectively article 9 of the General Block Exemption Regulation (GBER), hence excluded from the application of article 107(1) TFEU(par. 40, letter EC to Germany, Brussels 08.05.2012 c(2012) 3004 final). 
 
The EC follows the German reasoning and concludes that the measure is "in line with the provisions of the RAG. Consequently the aid measure is compatible with the internal market in accordance with article 107(3) (a) TFEU,(par. 80, letter EC to Germany, Brussels 08.05.2012 c(2012) 3004 final). 
 
A state measure in the GTA database is assessed solely in terms of the extent to which its implementation affects the extent of discrimination against foreign commercial interests. On this metric, the state aid proposed here is discriminatory.