ECJ rules Ireland must claw back €10m over illegal state aid

Case centres on granting of aid to one of country’s biggest manufacturing plants

The Aughinish facility is the largest alumina refinery in Europe with 450 employees and the capacity to produce up to two million tonnes of aluminium oxide a year
The Aughinish facility is the largest alumina refinery in Europe with 450 employees and the capacity to produce up to two million tonnes of aluminium oxide a year

The European Court of Justice has ruled against Ireland in a long-running legal case concerning the granting of state aid to the owners of one of the country’s biggest manufacturing plants.

The court on Friday agreed with two previous European Commission rulings which stated that tax relief given for the Aughinish Alumina facility in Askeaton, Co Limerick, amounted to illegal state aid.

The latest ruling means Ireland will be forced to claw back as much as €10 million in a move that is seen as likely to put jobs at risk at the plant. Alcan in France and Euroallumina in Italy are also impacted by the ruling, which is the result of a case that began in 2006.

The Aughinish facility is the largest alumina refinery in Europe with 450 employees and the capacity to produce up to two million tonnes of aluminium oxide a year.

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Now part of the Russian aluminium conglomerate Rusal, the plant was previously owned by commodities group Glencore.

The previous owners of the plant were exempted from paying excise on the fuel oil it used to power the manufacturing plant, which produces alumina, a substance used to make aluminium.

“The General Court considers, in today’s judgment and contrary to its first two judgments of 2007 and 2012, that the commission’s decision is valid and that the State aid must therefore be recovered for the period between February 3rd, 2002 and December 31st, 2003,” the Luxembourg-based court said ina statement.

The recorded a pretax profit of $15.6 million (€12.2 million) in 2013 following the closure of its defined benefit pension scheme, according to accounts filed at the Companies Office.

The profits for the Shannon estuary-based alumina refinery, owned by Russian aluminium giant Rusal, mark a turnaround on the operations performance in 2012, when it dipped into the red and had a $10.4 million (€8.1 million) pretax loss.

Charlie Taylor

Charlie Taylor

Charlie Taylor is a former Irish Times business journalist