EC to investigate state aid to France's IFP

22 December 2005 15:56  [Source: ICIS news]

LONDON (ICIS news)--The European Commission (EC) said on Thursday it had launched a formal investigation into Euro363m ($436m) of state aid to France’s petroleum and petrochemicals research group Institut Français du Pétrole (IFP) in 2003 and 2004.

IFP’s relationship with its commercial arm, Axens, is begin investigated. The EC said that after a preliminary study it looks on IFP and Axens as a single player in the catalysts and refinery processing, gas processing and petrochemicals market which is in competition with other operators.

It considers that part of the state aid awarded to IFP for its non-profit-making research, documentation and training activities also benefits its commercial activities. Accounting segregation does not appear to be in place for IFP group’s economic and non-economic activities, it added.

State aid to IFP amounted to Euro200m in 2003 and Euro163m in 2004. The institute was  funded through taxes on petroleum products between 1944 and 2002.

Axens was set up in 2001 as a 100% subsidiary to market IFP research findings in refining and petrochemicals.

“The market for refinery processing technologies and catalysts is a highly competitive one, and it is important to ensure a level playing field for all players, be they public or private,” European Union (EU) Competition Commissioner Neelie Kroes said.

The Commission has questioned aid given to the research institute before – in 1996 and 1998.

By: Nigel Davis
+44 20 8652 3214

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