In a state aid dispute, Danish courts have rule on the question, whether premium free loan guarantees from a municipality to district heating companies can constitute illegal state aid in the sense of Article 107 (1) the Treaty on the Functioning of the European Union. Horten assisted the Municipality of Sønderborg in the case.

The High Court of Western Denmark found that the district heating companies carry out activities on a market exposed to competition. The court found that there are several alternative heating sources, such as solar power and geothermal heating. Because the customers are free to choose a different source of heating, the district heating companies are in competition with other heating producers and thus covered by the Article 107.

The consequence of the ruling is that municipalities are obliged to charge a market-priced premium on loan guarantees offered to district heating companies to avoid an infringement of Article 107.


← Back to all articles