The European Commission has today authorised Germany to pay national aid worth a total of € 43 million to a subsidiary of Südzucker AG, Südzucker Bioethanol GmbH. The aid will finance investment in a plant for producing bio ethanol as well as feedingstuffs from regenerating agricultural raw materials (cereals and sugar treacle) in Zeitz, (Saxony-Anhalt). With this large-scale investment project, new forms of utilization of cereals are created in an area with significant surplus cereal production. The project fits well into the positive framework created by the EU and Germany for the promotion of the use of biofuels or other renewables.

The state aid, in the form of an investment premium, will be financed by Germany on the basis of the Investment Allowance Act (Investitionszulagengesetz), an aid scheme already approved by the Commission. However, to be in accordance with the European Union (EU) guidelines for State aid in the agriculture sector*, aids for investments with eligible expenses in excess of € 25 million must be specifically notified and approved by the Commission.

The total eligible costs of the investment project comprise around € 182.5 million. Hence, this is one of the biggest individual investment projects the Commission has approved under state aid rules in the agriculture sector.

For this project, the Land of Saxony-Anhalt has also applied for aid within the framework of the Structural Funds Regulation No 1260/1999**, which is partly financed by the EU.
The text of the decision will be made available on the Internet at
http://europa.eu.int/comm/secretariat_general/sgb/state_aids/agriculture.htm
once Member States have indicated whether they want parts of the decisions deleted for reasons of confidentiality. The decision can be found under the aid number N 267/04.

* Community Guidelines for state aid in the agriculture sector, OJ C 232 of 12 August 2000, p. 19.

** Regulation (EC) No 1260/1999 of 21 June 1999 laying down general provisions on the Structural Funds.