In its Opinion in Kernkraftwerke Lippe-Ems, C-5/14, EU:C:2015:51 (not available in English), AG Spuznar has submitted to the CJEU that a German tax on fissionable nuclear materials used for the production of electricity does not constitute State aid within the meaning of Art 107(1) TFEU, regardless of the fact that such a tax only applies to companies that produce electricity commercially.
From the State aid perspective, the reasoning of AG Spuznar deserves some analysis, as it is based on a rather uncreative (rectius, unimaginative) counterfactual situation that excludes the possibility of any different theoretical methods of taxation of electricity production.
Indeed, the AG considers that, prior to the creation of the "nuclear tax"
German law does not include any general system for the taxation of electricity production. However, in certain circumstances, establishing a new tax only for certain undertakings in a comparable category can have the same effect as an exemption from an existing tax [for the other undertakings]. Is it possible then to conceive a general tax system under which all electricity producers are equally taxed in their production?
It is characteristic of electricity that it can be produced under numerous techniques, which are very different from each other; namely the combustion of fossil fuels (coal, natural gas or oil) and their derivatives, nuclear reaction, or the use of different sources of renewable energy such as water, wind, solar energy, geothermal energy, etc.
Thus, it seems impossible to create a system of prior imposition that considers all these production processes equally. In other words, companies producing electricity under these different technologies are not in a comparable factual situation in terms of any prior taxation. All they have in common is their final product, ie electricity.
Therefore, not having previously taxed electricity generated by means other than nuclear energy is not an advantage in the light of the overall tax system, because such a system cannot exist. Thus, the disputed tax in the main proceedings is a specific tax that can only apply to the nuclear sector.
Since such a general system of prior imposition of electricity producers is not an imaginable framework of reference, failure to submit these producers [ie, non-nuclear] to a system of this type cannot be perceived as a mitigation of charges normally included in the budget of an undertaking (paras 69-73, references omitted, emphasis added).
In my view, the problem with the AG's reasoning is that it fundamentally relies on the acceptance that an alternative tax system could not be conceived. I struggle to accept this at face value. Surely, if the tax trigger was the production of electricity using inputs that cannot be disposed of safely or that create very high risks of catastrophic accidents (as one can conceive nuclear material does), then the system could be designed objectively to cover all modes of electricity production.
If any of the producers with other technologies met those characteristics to a reduced degree (eg, oil also creates risks, particularly in terms of spills, but it may be considered less dangerous than nuclear material), the system could be constructed in a progressive way.
This would have the double advantage of being clearly not selective and, more importantly, it would be pursuing environmental considerations to a higher level. And this is just one option. I am sure that clever tax lawyers could find more tax triggers that could support an "imaginable" general system for the taxation of electricity production--which would always be general, even if it meant that "clean" energy production was taxed at zero rates.
Just as the AG may have been, I am torn with the situation (from a normative perspective, I agree that nuclear production should be heavily taxed in order to discourage it), as accepting the existence of such an alternative system would strike the German nuclear tax down due to its incompatibility with Art 107(1) TFEU.
This could have some short-term negative effects and would put significant heat under the seats of the CJEU, as environmental associations would see them as siding with nuclear production of energy. However, it would also require Germany (and all other 27 Member States) to rethink the taxation of electricity production, which is not necessarily a bad thing. And, more importantly, it would not push for a development of EU State aid law that is fundamentally based on a (self-perceived) impossibility of existence of alternative systems of taxation, which is not that sound. Hence, I would ask the CJEU to take the burn and depart from Spuznar's unimaginative way of dodging the bullet.