Green Goals, Red Tape: Aarhus Convention’s Impact on EU State aid procedure

In May 2025, the European Commission (EC) amended the State aid rules to ensure compliance with the European Union’s (EU) obligations under the Aarhus Convention.  This follows a finding by the Aarhus Convention Committee in 2021 that the EU had breached the Convention’s provisions on access to justice by failing to establish administrative or judicial procedures enabling the public to challenge State aid decisions on the grounds that they contravene EU environmental law.

The amendments to the State aid rules are relevant for all businesses seeking EC approval of State aid that may have an environmental impact, even if the aid itself is not granted for environmental purposes but instead supports other policy objectives (e.g., State aid under the EU Chips Act).  Specifically, the amendments introduce a new EC internal review mechanism that allows environmental non-governmental organisations (NGOs) to request the EC to review certain State aid decisions on the grounds that they potentially breach EU environmental law.  The amendments also allow NGOs to appeal the EC’s review decision to the General Court of the European Union (GCEU).

Background

The Aarhus Convention requires public authorities to ensure access to information for the public and prescribes certain procedural rights, in particular regarding access to justice, for reviewing administrative acts concerning environmental matters.  With the adopted amendments to State aid rules — specifically to the State aid Implementing Regulation and to the State aid Best Practices Code — the EC seeks to comply with its obligations under the Convention.

It should be noted that the European Court of Justice (ECJ) had already ruled in 2020 (C-594/18 P, Austria v Commission) that when considering the approval of State aid, the EC must “check that [the aided] activity does not infringe rules of EU law on the environment. If it finds an infringement of those rules, it is obliged to declare the aid incompatible with the internal market without any other form of examination.” 

In light of this judgment, one could debate the practical impact that this new internal review mechanism will have on ensuring the compatibility of State aid measures with EU environmental law. 

It is, however, clear that the EC has introduced this new internal review mechanism in response to its legal obligations under the Aarhus Convention. It is also clear that, from the perspective of environmental NGOs seeking to challenge aid approvals, the internal review mechanism will provide a new and separate route by which to do so — one that is arguably in the EC’s interest, as it allows for a self-administered check on the environmental compliance of its own decisions.

Overview of changes on State aid rules

Going forward, NGOs can request an ‘internal review’ of certain State aid approval decisions by the EC, by providing evidence that a specific provision of EU environmental law has been infringed by the aid in question.

As the EC notes in its Staff Working Document, since aid measures that contravene EU environmental law cannot be declared compatible with the internal market in the first place, the internal review to be carried out under the new mechanism will consist of verifying if the EC’s initial assessment has been carried out correctly.

Where the EC finds a request for internal review inadmissible, or concludes that the State aid decision does not breach EU environmental law, the applicant NGO can appeal the EC’s finding to the GCEU — in doing so, the NGO’s standing to appeal will not be limited to traditional requirements, but instead be based on eligibility criteria in the updated State aid Best Practices Code.  Previous cases before EU courts on the application of the Aarhus Convention to other areas of EU law do, however, indicate that the scope of this administrative and judicial review would be narrow, namely that: 

• Administrative review by the EC should address violations of environmental provisions, not a full challenge to the legal and procedural validity of the act or decision; and 
• Subsequent judicial review before the EU courts concerns the legality of the review decision itself. The court held in TestBioTech (T-606/21) that the NGO cannot introduce new grounds beyond those already included in the request for review.  However, it can introduce new arguments connected with already submitted grounds.

Neither the administrative nor the judicial proceedings have a suspensive effect on the EC’s State aid decision.  However, the GCEU can annul the EC’s finding on appeal, in which case the EC would have to reassess whether there was a breach of environmental law and potentially revoke the State aid approval decision.  It remains to be seen whether the mechanism will, therefore, lead to a de facto suspension of the implementation of the aid measure.

Potential impact on future State aid procedures

The introduction of the internal review mechanism comes with a number of practical implications for the granting of State aid, including:

• More information required in the general notification form, showing that neither the aided activity nor any aspects “indissolubly linked” to the object of the aid are in breach of EU environmental law (with upcoming EC guidance on the notion of an “indissoluble link”).  Aid recipients will, consequently, be under an increased obligation to provide information to the Member State to carry out this assessment. 
• Legal uncertainty for Member States and State aid recipients on whether a State aid approval could be revoked.  This uncertainty exists for an initial eight-week window after publication of the clearance decision, within which an NGO may request a review. If this request is granted by the EC, the uncertainty will continue for up to an additional 22 weeks while the EC reviews the aid measure to determine if it breaches EU environmental law.  It may go even further if the EC’s finding is appealed to the GCEU, with the additional time required to reach a conclusion on the matter potentially taking years. 
• Compliance with environmental law can be expected to receive more attention.  Establishing that a State aid measure is compliant with environmental law will likely become a more important pillar in the State aid procedure.

Conclusion

While the objective of introducing the new internal review mechanism — to ensure the compliance of State aid measures with EU environmental law — is apparent, it will undoubtedly introduce another layer of regulatory complexity and administrative burden.  A clear understanding of the scope of the mechanism, as well as EU environmental rules, is therefore important for future aid measures, as EU Member States and businesses seek to minimise disruption to the State aid process.