The European Commission said it is demanding that France, Ireland and Italy partially recover government aid given to three companies as tax exemptions for heavy fuel used in the production of alumina.
It is ordering the three countries to recover 20 pct of the value of the tax exemptions for the period from Jan 1 2004 from Alcan in France, Aughinish in Ireland and Eurallumina in Italy.
The commission said that in all three member states the exemptions are 'highly selective' and 'in practice' benefit only one company and one sector per country.
France, Ireland and Italy must now suspend the payment of aid to beneficiaries until they have paid back the aid found incompatible in both decisions.
In December 2005, the commission already ordered the recovery of part of the tax exemptions for alumina production in France, Ireland and Italy for the period 2002-2003.
Alumina is a white powder, produced from bauxite ore, used in smelters to produce aluminium.
Separately, the commission approved German tax exemptions for 'dual use' energy products, where the product is also used as a raw material, such as in steel production.
It also approved exemptions for energy products used in processing minerals, such as cement and glass production.
The EU executive said the tax exemptions are 'a consistent part of the overall national tax system'.
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