Commissie onderzoekt 363 miljoen euro Franse staatssteun aan de Institut Français du Pétrole (en)

The European Commission has launched a formal state aid investigation as provided for in Article 88(2) of the EC Treaty into the state aid awarded by France to Institut Français du Pétrole (IFP) and some of its subsidiaries.

IFP is a non-profit-making body engaged in research, training and documentation in the hydrocarbons field and benefits, by virtue of its status, from state aid which amounted to €200 million in 2003 and €163 million in 2004.

The Commission takes the view that IFP and its subsidiary Axens form a single player on the refinery processing technologies and petrochemicals market which is in competition with other private operators.

The Commission also believes that R&D expenditure by IFP and its subsidiary on the market is funded at least in part from the state aid awarded for IFP's non-profit-making activities, and it doubts that this funding is compatible with the state aid rules.

The investigation will enable the Commission to obtain further information on the scope and nature of the state-funded activities of IFP and some of its subsidiaries and will provide interested parties with an opportunity to submit their comments on the measure. It does not prejudge the outcome of the investigation.

EU Competition Commissioner Neelie Kroes i said: "The market for refinery processing technologies and catalysts is a highly competitive one, and it is important to ensure a level playing field for all players, be they public or private."

Between 1944 and 2002 IFP received the proceeds of a parafiscal charge on certain petroleum products. On two occasions, in 1996 for the period 1993-1997 and in 1998 for the period 1998-2002, the Commission concluded that this payment to IFP was not state aid within the meaning of the EC Treaty, taking the view that IFP was a non-profit-making research centre which distributed its research findings on a non-commercial basis to all companies without discrimination and did not give special treatment to companies in which it had shares.

Further to a complaint, the Commission examined whether the circumstances on which its previous decisions were based still applied.

Axens, set up in 2001, is a 100% subsidiary of IFP, which entrusted it with marketing its R&D findings in the refinery processing, petrochemicals and gas fields by signing two exclusive framework licence and product licence agreements. In addition, under an industrial research agreement with IFP, Axens has priority access ("right of first refusal") to all IFP's R&D findings in its field of activity.

After a preliminary examination, the Commission takes the view that IFP and its subsidiary Axens form a single player in the catalysts and refinery processing, gas processing and petrochemicals market which is in competition with other operators. In addition, the Commission considers that part of the state aid awarded to IFP for its non-profit-making research, documentation and training activities also benefits its commercial activities on that market. Accounting segregation does not appear to be in place for IFP group's economic and non-economic activities, thus enabling some IFP/Axens expenditure to be funded, at least in part, from the public purse.

The formal investigation procedure should enable the Commission to assess the proportion of R&D expenditure by IFP and its subsidiary which is state-funded, to determine whether state aid is necessary for that expenditure and to ensure that state-funded expenditure does not cover operating costs, the state aid rules being very strict on that point.

The Commission also intends to extend its formal investigation to IFP group's commercial activities on two other markets, namely consultancy services for the exploitation of oilfields and for the treating of gas and desulphurisation, in which IFP is active with its subsidiaries Beicip-Franlab and Prosernat, which have priority access to its research findings.