EU Commission Opens In-Depth State Aid Investigation Into Support Measures Granted By Poland

; posted on
November 2nd, 2019

The European Commission announced that it had opened an in-depth investigation to assess whether two support measures with a total value of EUR 39 million granted by Poland in 2012-2013 to a chemical company PCC MCAA Sp. Zo.o (PCC) for investing in a new plant in Poland are in line with EU rules on regional State Aid.

Background

PCC MCAA Sp. Zo.o (“PCC”), a subsidiary of the PCC Group, is a large chemical company located in Poland. In 2012-2013, Poland decided to grant public support to PCC for investing in a new plant with an annual capacity of 42 kilo tons (kt) of ultra-pure monochloroacetic acid (“MCAA”) in Brzeg Dolny, Poland. The public support, which aimed at contributing to the development of the region, took the form of: (i) a direct grant of €16 million, and (ii) a tax exemption of maximum €23 million. Since Poland considered both support measures to be covered by the 2008 General Block Exemption Regulation (GBER 2008), which was applicable at the time, it did not report them to the Commission for assessment under State aid rules.

In response to the unreported treatment, the Commission received a complaint from a direct competitor of PCC alleging that the first Polish support measure in favour of the chemical company (i.e. the direct grant of €16 million) constituted State aid that should have been notified to the Commission and was not compliant with the applicable EU State aid rules.

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The Commission takes the view that both measures constitute State aid subject to notification to the Commission for assessment before being implemented. Furthermore, the Commission has doubts whether the Polish measures in favour of PCC are in line with EU State aid rules, in particular EU Regional Guidelines 2007-2013. The Commission will now investigate further to determine whether its initial concerns are confirmed.

European Commission

 

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