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This blog looks at recent reforms in the EU concerning the administrative and judicial review of decisions to approve state aid. The reforms were triggered by the findings of the Aarhus Convention Compliance Committee (ACCC) in case ACCC/C/2015/128 and are expected to facilitate challenges to state aid decisions alleged to breach EU environmental law. I explain the nature of these reforms and reflect on the extent to which what is happening in the EU might raise questions of Aarhus compliance in relation to the UK’s own Subsidy Control Act 2022.
The EU’s Aarhus Regulation and procedures for administrative and judicial review
The EU is a party to the Aarhus Convention and has implemented the Convention via the Aarhus Regulation (Regulation 1367/2006). The Regulation includes provisions for administrative and judicial review, in line with the Aarhus Convention’s Article 9 (concerning access to justice). In short, environmental NGOs (and members of the public meeting certain criteria) may challenge administrative acts adopted by EU institutions which they consider to be in breach of environmental law via an administrative review procedure, known as “requests for internal review.” The EU institution targeted by a request, usually the Commission, must respond and make an internal review decision. If the applicants remain dissatisfied with the decision taken upon a request for internal review, they may challenge that decision before the EU courts, via judicial review. An example of a request for internal review and subsequent legal challenge I was involved in recently is a challenge brought by a coalition of NGOs relating to the Commission’s decision to include certain aviation and shipping activities withing the EU’s Taxonomy (which facilitates investment in activities which it defines as “sustainable”).
Until the EU’s recent reforms, the Aarhus Regulations’ provisions on administrative and judicial review did not apply to state aid decisions adopted by the Commission under Article 108(2) TFEU. (i.e., final decisions adopted after a formal investigation procedure). While interested parties could participate in the formal investigation procedure preceding any such final decision, “interested parties” were defined narrowly (as “any Member State and any person, undertaking or association of undertakings whose interests might be affected by the granting of aid, in particular the beneficiary of the aid, competing undertakings and trade associations”). Once a final decision was made, judicial review was available only to those who met the so-called “Plaumann test” for direct and individual concern (which is short of impossible to meet, especially for NGOs advancing issues of general public interest).
The 2025 Reforms
However, in 2021, the ACCC upheld a complaint brought to it by an environmental NGO relating to a Commission decision on State aid granted to support the development of the Hinkley Point C Nuclear Plant in the UK. In short, the ACCC held that the EU was in breach of Article 9(3) of the Convention because of its failure to provide access to administrative or judicial procedures for members of the public to challenge State aid measures under Article 108(2) TFEU alleged to contravene EU environmental law.
Following a consultation (which, the Commission said, generated “limited albeit informative feedback from stakeholders”) the EU has redressed that Aarhus non-compliance. The reforms mean that:
What about the UK?
Post-Brexit, the UK implemented the provisions relating to state aid in the Trade and Cooperation Agreement via the domestic Subsidy Control Act 2022. The Competition and Markets Authority (‘CMA’) and Competition Appeals Tribunal (‘CAT’) have key responsibilities under the 2022 Act. Some subsidies must be referred to the CMA’s Subsidy Advice Unit (‘SAU’) before they are awarded, and the CAT can hear “quasi-judicial review” challenges to public authorities’ decisions to award subsidies. My colleague Barney discusses the operation of the 2022 Act here.
For this blog’s purposes, what I care about are the 2022’s Act’s provisions on standing for reviews before the CAT. Challenges can only be brought by an “interested party,” defined in Article 70(7) as “anyone whose interests may be affected by the giving of the subsidy or making of the scheme.” The definition is narrow, as the SCA Statutory Guidance suggests: “An interested party would most typically be a competitor of the person that receives the subsidy (the beneficiary). It could also be a trade association active in the relevant sector and that represents the competitor or competitors of the beneficiary.” The definition thus largely mirrors the EU’s definition of interested parties, pre-2025 reforms (see above).
It’s unclear whether environmental NGOs could ever meet the standing test under the 2022 Act, or whether they can bring an ancillary judicial review should they not fall within the 2022 Act’s definition of interested party. If they cannot, then do these domestic provisions raise similar concerns around Aarhus compliance in the UK (it may be that this will matter little in due course if, as Alex’s latest blog points out, the UK ends up “Aarhxiting”)? And, in light of the reforms which the EU has now implemented, is there a risk that the UK’s more restrictive provisions on challenges to subsidy decisions may fall foul of the provisions on non-regression from levels of environmental protection and the general implementation of agreements in the Trade and Cooperation Act and EU (Future Relationship) Act?
This blog post was written by Margherita Cornaglia.
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Authors of the Aarhus blogs
– James Maurici KC – James has been in many of the leading cases on Aarhus costs including: R (RSPB) v SSJ [2017] 5 Costs L.O. 691; Case C 530/11 Commission v United Kingdom; Case C-260/11 Edwards v EA; R (Edwards) v EA (No.2) [2011] 1 Costs L.R. 70 and [2013] UKSC 78; and R (Edwards) v EA [2011] 1 W.L.R. 79. He has also appeared a number of times before the UNECE Aarhus Compliance Committee in Geneva, cases include: ACCC/C/2010/45; ACCC/C/2010/53; ACCC/C/2011/60; ACCC/C/2011/61; ACCC/C/2012/77; ACCC/C/2014/100 and 101; ACCC/C/2017/150. He is currently acting on the Free Trade Agreement Communication ACCC/C/2022/194. He was one of the contributors to the Aarhus Convention: A Guide for UK Lawyers (2015) and he has written and lectured extensively on the Aarhus Convention.
– Jacqueline Lean – Jacqueline has also been instructed on a number of matters concerning the Aarhus Convention, including appearing (with James Maurici KC) for United Kingdom before the Aarhus Compliance Committee on two communications concerning the Government’s decision to proceed with HS2 (ACCC/C/100 & 101); representing the Secretary of State for Communities and Local Government Secretary of State in R (CPRE Kent) v Secretary of State for Communities and Local Government [2019] EWCA Civ 1230 in which the Court of Appeal considered the approach to summary assessment of costs at permission stage when an Aarhus costs cap applied; and acting for the Secretary of State in R (RSPB) v Secretary of State for Justice [2018] Env LR 13, a challenge to the Government’s amendments to the Aarhus costs protections in the CPR (also with James Maurici KC). She is also a contributing author to Coppel’s ‘Information Rights’ on Environmental Information.
– Nick Grant – Nick joined Chambers in 2019 and has regularly advised on Aarhus related matters. He has represented the UK twice before the Aarhus Convention Compliance Committee, appearing with James Maurici KC in ACCC/C/2017/150 (the Withdrawal Act case) and unled in the admissibility hearing for ACCC/C/2022/194 (the free trade agreements case).
– Alex Shattock – Alex has been involved in a number of environmental claims including Friends of the Earth v SSLUHC (the Cumbria coal mine case: acting for Friends of the Earth in the Planning Inquiry and High Court, with Paul Brown KC and Toby Fisher); Cox and Ors v Oil and Gas Authority [2022] EWHC 75 (Admin) (representing Extinction Rebellion activists in a challenge to the Oil and Gas Authority’s Strategy, with David Wolfe KC and Merrow Golden); R (Hough) v SSHD [2022] EWHC 1635 (acting for the claimant in an environmental and equalities challenge to the controversial use of Napier Barracks as asylum seeker accommodation, with Alex Goodman KC and Charles Bishop). He regularly advises individual and NGO clients on Aarhus costs protection. Alex also has a keen interest in treaty law generally. He has a masters and PhD in public international law and has been involved in various treaty negotiations and treaty ratification processes.
