Former Ilva: the EU Court’s ruling – no energy subsidies for a state-aided company

“A ‘firm in difficulty’ cannot benefit from the concessions provided for firms with high electricity or gas consumption.” This is established by a ruling of the Court of Justice of the European Union concerning the former Ilva, which came following a request from the Italian administrative court to the Court of Justice for guidance on the question of whether the exclusion of companies subject to special administration from access to the incentives provided for energy- or gas-intensive companies is compatible with EU law. The Court clarifies that “energy aid must not be granted to undertakings in difficulty within the meaning of the guidelines on rescue aid”.

In reconstructing the background to the case, the Court notes that “in 2024, the Italian authorities rejected the applications submitted by Acciaierie d’Italia, Italy’s leading steel group, regarding its inclusion, for the year 2025, on the lists of enterprises with high electricity or gas consumption. Consequently, AdI did not benefit from the financial incentives provided for such companies”. The rejections – the text states – “were based on AdI being classified as a ‘company in difficulty’ within the meaning of the European Commission’s guidelines on state aid for the rescue of companies in difficulty, due to its being subject to the Italian regime of extraordinary administration and its state of insolvency”.

“Following appeals lodged against these refusals, the Italian administrative court referred to the Court of Justice the question of whether the exclusion of undertakings subject to special administration from access to the incentives provided for energy- or gas-intensive undertakings is compatible with EU law. The Court notes that, in adopting the Guidelines on rescue aid, the Commission deliberately limited its own discretion regarding the compatibility of State aid. Consequently, any derogation from those rules would constitute a breach of the general principles of law, in particular those of equal treatment and the protection of legitimate expectations”. The Court notes that “Italy has merely brought its legislation on State aid for energy into line with the requirements of the Commission’s guidelines on State aid for climate, the environment and energy, which specify that energy aid must not be granted to undertakings in difficulty within the meaning of the Guidelines on rescue aid”.

“A company placed under special administration is a company in difficulty within the meaning of EU law, in that such a regime constitutes insolvency proceedings subject to the prior determination of the insolvency of the company concerned, a matter which it is for the referring court to verify. The fact that the insolvency proceedings provided for by the legislation of the Member States are aimed at restoring the economic viability of the undertakings concerned does not call into question the fact that those undertakings are undertakings in difficulty within the meaning of the Guidelines on rescue aid”, the Court points out. "Furthermore, aid for the energy sector must not be confused with rescue aid, which pursues different objectives", adds the Court.