EUROPEAN COMMISSION Brussels, C(2007) PUBLIC VERSION WORKING LANGUAGE This document is made available for information purposes only. Subject: State aid No. N 152/2007 – Sweden Regional transport subsidy scheme Sir, 1. PROCEDURE (1) On 15 December 1999, the Commission approved the Modified regional policy transport aid scheme for the period 2000 – 2006 under the State aid number N 146/19991. 1 SG(99) D/10274. There were two subsequent amendments to the scheme N 146/1999: N 220/2005 (Commission decision of 22 June 2005, K(2005) 1943, OJ C 235 of 23.09.2005) and N 637/2005 (Commission decision of 23 March 2006, K(2006) 1103, OJ C 153 of 01.07.2006). Carl Bildt Chef för Utrikesdepartementet Arvfurstens palats Gustav Adolfs torg 1 SE - 103 39 Stockholm Europeiska kommissionen, B-1049 Bryssel – Belgien Telefon: (32-2) 299 11 11 (2) By electronic notification dated 26 March 2007, the Swedish authorities notified to the Commission, pursuant to Article 88(3) of the EC Treaty, the above- mentioned aid scheme for the period 2007 – 2013. (3) By letters dated 16 May 2007 (D/52111) and 10 August 2007 (D/53352), the Commission asked the Swedish authorities to provide additional information on the above-mentioned measure. The Swedish authorities submitted the information requested by letter dated 15 June 2007, registered at the Commission on the same date (A/35027), and by letter dated 6 September 2007, registered at the Commission on the same date (A/37266). 2. DETAILED DESCRIPTION OF THE AID MEASURE 2.1. Objective (4) The Regional transport subsidy scheme, which has been in force in Sweden since 1971, aims at the stimulation of industrial activity in the North of Sweden by providing compensation for additional transport costs incurred by enterprises located in this region. 2.2. Legal basis (5) The legal basis of the scheme is the Decree on regional transport aid ("Förordning om regional transportbidrag") and Decree on amendments of the decree (2000:281) on regional transport aid ("Förordning om ändring i förordningen (2000:281) om regional transportbidrag"). (6) The scheme is published on the internet at the following web address: http://www.regeringen.se 2.3. Granting authority (7) NUTEK – the Swedish Agency for Economic and Regional Growth is the granting authority under the scheme. 2.4. Eligible regions (8) Areas eligible for transport aid are the following regions, including their respective population density (based on Eurostat data relating to the year 2005): In the NUTS-II region of SE07 Mellesta Norrland (5.2 inhabitants per square kilometre), the NUTS-III regions of SE071 Västernorrland (11.3 inhab/km²) and SE072 Jämtland (2.6 inhab/km²). In the NUTS-II region of SE08 Övre Norrland (3.3 inhab/km²), the NUTS-III regions of SE081 Västerbotten (4.7 inhab/km²) and SE082 Norrbotten (2.6 inhab/km²). 2.5. Beneficiaries (9) The beneficiaries under the scheme are firms of any size, which are located in the above-mentioned regions and which are not engaged in sectors that are excluded from the scope of the scheme (see the explanation below). 2 2.6. Eligible types of transport (10) Under the scheme, aid is granted in relation to: (1) transport from places within the support area if the goods are either finished goods or semi finished goods that have undergone extensive processing within the support area (aid for transport going from companies – outward transport (“uttransporter”)); (2) transport to places in the support area, if the goods are raw materials or semi-finished products that shall undergo extensive processing at a recipient's premises (aid for transport coming to companies – inward transport (“intransporter”)). (11) The Swedish authorities indicate that inward transport aid makes up some 15 per cent of total transport aid. Inward transport aid is granted to companies in specific sectors of industry in respect of products undergoing considerable processing or refining, i.e. mostly to companies in the engineering industry whose production facilities in sparsely populated areas depend on long-haul transport of inputs and intermediate products for their production activities. Around half of the 700 companies receiving transport aid in 2006 received inward transport aid. Most companies receiving inward transport aid also receive outward transport aid. Of the approximately 24 500 employees of companies receiving inward transport aid, some 14 000 worked in the engineering industry. The Swedish authorities emphasise that inward transport aid is therefore particularly important in this context as it better enables companies less dependent on local conditions to operate in different areas. (12) Under the notified scheme transport aid can be granted for additional transport costs incurred for transporting goods within Sweden’s borders by rail, for commercial traffic by road and by sea2. Transport aid may not be granted for sea transport between Swedish and non Swedish ports. (13) Under the notified scheme transport distance refers to the total stretch of the journey, based on the shortest route in Sweden for land transport and sea transport. The Swedish authorities indicate that the calculations of additional transport costs are based on the shortest, most environmentally sound and cheapest methods of transport. External costs for the environment are taken into consideration, as calculations for additional transport costs are based on rail transport, when this is an alternative to transport by lorry. 2 The legal basis stipulates that in case there are any special circumstances the Swedish Agency for Economic and Regional Growth may allow aid to be granted for transport costs that do not relate to transport in commercial traffic. The Swedish authorities explained that there are places that are so remote that it is impossible for professional transport services to reach them. So far only one small company, located in Karesuando (300 km from Kiruna, a principal town in the area) has received aid for transport with its own vehicles. No professional company has wished to take on this transport due to the company's geographical remoteness. The highest amount granted to the company in the 2000- 2006 period was SEK 34,700, which was granted in 2004. 3 (14) Transport aid may be granted for the sea transport for the stretch between a port in the support area and a port in another part of Sweden, irrespective of whether a vessel has passed the borders of the Swedish territorial waters. If the vessel is going to a foreign destination, transport aid may be granted for the stretch between the port in the support area and the closest domestic port to where the vessel is considered to have finally left the Swedish territorial waters. For transport going to the company, transport aid is granted for the stretch between the closest domestic port to where the vessel is considered to have entered the Swedish territorial waters and the port in the support area. Transport aid may be granted for water transport forming part of the stretch which is entitled to an aid and may be granted for transport on lakes in accordance with the rules that apply for land transport. (15) Transport of used goods is not eligible for a transport subsidy under the scheme. Moreover, as a general rule no transport subsidy shall be paid for transports made with the beneficiary’s own transport equipment. The aid under the scheme is only paid for transport undertaken by a professional carrier3. (16) The scheme is not applicable to the following sectors: steel sector, synthetic fibres and products specified in Annex I of the EC Treaty. The transport subsidy is also not payable to industries which are governed by specific State aid rules: such as fisheries and aquaculture, coal and shipbuilding industries. (17) Under the scheme no aid can be granted towards the transport or transmission of the products of businesses without an alternative location (products of the extractive industries, hydroelectric power stations, etc). 2.7. Calculation of the transport aid (18) The aid is calculated as a percentage of the “transport cost” incurred by the aid recipient. In this context, the “transport cost” refers to reasonable costs that are specified in a consignment note or equivalent document and which are dependent on the transport distance within the country, the weight of the goods and the type of goods, as well as supplementary freight charges and other charges that may be attributed to the actual transport. Value added tax and sums of money that are paid back by the transport company as a refund may not be calculated as part of the transport cost. (19) Aid for transport going from a company can be granted for transport for the stretch that exceeds 401 kilometres. The aid is calculated based on the stretch and a rate of aid in percent that depends on the location of the production site in accordance with the following table: Table 1: Transport aid intensity by location of the production site Located in Rate of aid in percent (%) 3 Ibid. 4 Municipalities of Sundsvall and Timrå 10 Municipalities of Härnösand, Ånge, Kramfors and Härjedalen, as well as the 15 municipalities of Örnsköldsvik and Sollefteå in the areas which are not specially listed below Municipalities of Bräcke and Ragunda 20 Municipalities of Berg, Nordmaling, Östersund, Krokom, Umeå, Vännäs, 25 Bjurholm, Robertsfors and Åre Municipalities of Åsele, Strömsund, Vindeln, Dorotea and Lycksele and the 30 parishes of Edsele, Junsele, Ramsele and Ådalsliden in the municipality of Sollefteå as well as the former parish registration district of Solberg in the municipality of Örnsköldsvik Municipalities of Vilhelmina, Skellefteå, Piteå, Luleå, Storuman, Norsjö and 35 Boden Municipalities of Älvsbyn, Malå, Kalix, Arvidsjaur, Haparanda, Sorsele, 40 Överkalix and Övertorneå Municipalities of Arjeplog, Jokkmokk, Pajala, Gällivare and Kiruna 45 (20) Aid for transport coming into a company is granted for transport for the stretch that exceeds 401 kilometres.