Commission Decision (EU) 2017/1494
of 19 December 2016
on State aid for an investment contract for the biomass conversion of the first unit of the Drax power plant SA.38760 (2016/C) which the United Kingdom is planning to implement
(notified under document C(2016) 8442)
(Only the English text is authentic)
(Text with EEA relevance)
THE EUROPEAN COMMISSION,
Having regard to the Treaty on the Functioning of the European Union, and in particular the first subparagraph of Article 108(2) thereof,
Having regard to the Agreement on the European Economic Area, and in particular Article 62(1)(a) thereof,
Whereas:
Following pre-notification contacts, on 2 April 2015 the United Kingdom notified the Commission, pursuant to Article 108(3) of the Treaty, of support for the conversion to biomass of Unit 1 of the Drax Power Station. The Commission requested the United Kingdom to provide additional information on 20 May, 24 July and 23 October 2015. The United Kingdom provided a reply to the Commission on 26 May, 25 August and 5 November 2015.
By letter dated 5 January 2016, the Commission informed the United Kingdom that it had decided to initiate the procedure laid down in Article 108(2) of the Treaty in respect of the aid for the conversion to biomass of unit 1 of the Drax Power Station (the Opening Decision).
On 18 February 2015, the United Kingdom provided its comments on the Opening Decision to the Commission.
On 5 February 2016, the Opening Decision was published in the Official Journal of the European Union. The Commission also invited interested parties to submit their comments.
The Commission received comments from 49 interested parties. On 7 April 2016, it forwarded those comments to the United Kingdom, which was given the opportunity to reply. On 9 May 2016, the United Kingdom duly replied to the comments.
The notified aid concerns operating aid for the electricity generated in one unit (Unit #1) of the coal fired Drax power plant converted to enable it to operate entirely on biomass. The power plant is situated in Selby, North Yorkshire in North East England and it is owned and operated by Drax Power Limited (the beneficiary), a wholly owned subsidiary of Drax Holding Limited.
Drax is a 3 960 MW coal fired power plant that started commercial operation in 1974. Under the current proposal, one of the six units in the power plant will be retrofitted to operate exclusively on biomass. Due to the characteristics of the combustion process, the plant will be able to burn only industrial grade wood pellets. The plant will provide electricity to the national power grid and the United Kingdom estimates that the project will generate 1,1 % of the United Kingdom's average annual future electricity.
According to United Kingdom's estimates, the notified project will save approximately 28,8 million tonnes of CO2 emissions during the lifetime of the project and supply approximately 3,6 TWh of electricity per annum. The plant will provide base-load, low-carbon electricity.
Operating parameters Drax unit (updated)7 | ||
|---|---|---|
Fuel costs (GBP/GJ) | Thermal efficiency (%) | Mean net load factor (%) |
8,18 | 38,6 | 78 |
The UK national legislation for the measure is the Energy Act 2013.
The total budget for the notified project is estimated at GBP 1,3 billion and the United Kingdom confirmed that no aid will be paid to the beneficiary before the commissioning date.
The aid will be paid out by a government owned counterparty, the Low Carbon Contracts Company Ltd funded through a statutory levy imposed on all licensed electricity suppliers, based on the suppliers' market share, calculated by reference to their customers' metered electricity use. Electricity suppliers will be required to meet the cost of their obligations from their own resources but will be allowed to pass on the costs to consumers as part of their overall pricing strategies.
The United Kingdom clarified that projects that have been awarded FIDeR contracts will be not eligible to receive a support for the same electricity generation under the new CfD support scheme. Moreover, no project receiving payments under FIDeR contracts will be eligible to receive renewable obligation certificates for the same electricity generation. Finally, renewable generation that receives support through an investment contract will not be eligible to participate in the capacity market or receive investment aid during the term of the investment contract.
Based on the rules described in recital 20, the United Kingdom confirmed that neither the beneficiary nor any of its direct or indirect stakeholders has received, been granted or applied for any other support from the United Kingdom or from any other Member State.
On 5 January 2016, the Commission decided to initiate the formal investigation procedure regarding the compatibility of the notified aid with the internal market, in particular in view of the proportionality of the aid and the risk of market distortion.
More specifically, the Commission concluded that the risk of overcompensation could not be excluded due to uncertainties in the assumptions and based on a sensitivity calculation provided by the United Kingdom to estimate the impact on the IRR by changes in the plant average thermal efficiency, load factor and fuel cost. If the thermal efficiency and the load factor were to increase by 5 % and fuel costs to decrease by 5 %, the IRR (on pre-tax real basis) would increase from the estimated 4,7 % to over 15,6 %. The Commission therefore expressed doubts on the absence of overcompensation.
The Commission also expressed concerns that the amount of wood pellets required to operate the Drax unit entirely on biomass would lead to undue negative effects on other participants on the wood pellet market. The Drax biomass conversion project would consume approximately 9 % of the global wood pellet production and 16 % of the consumption in the Union, based on 2012 figures. The Commission expressed doubts that the market could accommodate such an increase in demand without undue market distortions.
The Commission further noted that wood biomass, as raw material, has different uses. The increased demand for wood pellets might also lead to distortions in the wood fibre market affecting other industries, such as the pulp and paper or board manufacturing. Given the size of the Drax biomass conversion project, the Commission could not, with sufficient certainty, exclude the existence of undue market distortions in the raw material market (i.e., the wood fibre market).
Several associations of industrial wood pellets producers highlighted the environmental benefits of bioenergy and the sustainability of wood pellets produced in the US. They emphasised that biomass has an important role to play in reducing greenhouse gas emissions.
Forest2Market estimated that the additional exports of wood pellets to the European Union represent 1 % of the total pulpwood inventory of the southern part of the US and 0,3 % of the total US inventory. Furthermore, wood fibre prices would probably have increased without the increased demand from the markets for wood pellets in the Union. Among the factors affecting the price of wood fibres, Forest2Markets identified the following elements: (a) a decline in the production of sawmill residual chips, due to the housing market crash, which has resulted in an increased demand for pulpwood; (b) strong deviations from average long-term precipitation patterns; and (c) land ownership changes.
Forest2Market also provided data on the forestry inventory. According to that data, the average supply of residues between 2007 and 2014 was 21 % less than the supply between 2000 and 2006, causing pine residual prices to increase by 12,5 % and hardwood residual prices to increase by 10,7 %, when comparing averages over those two periods. According to Forest2Market, this demonstrates the impact of the reduced availability of sawmill residues on wood prices.
The biomass trader, Evolution Markets, provided information on the wood pellet spot market. According to Evolution Markets, the wood pellet spot market had experienced some volatility during the preceding 24 months, but the spot price for industrial wood pellets hit historic lows in 2016. The wood pellet spot market is also very illiquid and the volume of wood pellets traded under spot market conditions remains low when compared to the volume traded under long term contracts. According to Evolution Markets, although spot pricing is currently cheaper than long term contracts, sourcing sufficient volumes to supply even half of the Drax unit consumption requirement would be extremely difficult.
The International Trade Administration (ITA) of the US Department of Commerce supplied trade data on US exports of wood pellets. The ITA did not draw any conclusions from the data, but pointed to a blog post of the US Department of Agriculture Chief Economist highlighting the positive economic impacts of wood pellets production.
Three stakeholders argued that the support for the Drax biomass conversion project would lead to overcompensation and market distortions in the wood fibre market. Renewable Energy Systems Ltd (RES) claimed that the operating parameters of the Drax plant were underestimated, and it specifically referred to the net load factor. It recommended the introduction of a claw back clause and a cap on the number of MWh receiving aid. RES also indicated that a competitive bidding process could have reduced the strike price.
In a separate submission, Biofuelwatch reiterated that the support for the Drax biomass conversion project would lead to overcompensation due to an underestimated load factor and overestimated fuel costs. That submission also claimed that, due to its size, the notified project would distort the market in the south-east of the US, and in South America where Drax would source approximately 16 % of its fuel, citing the risk of land-grabs from poorly regulated operations in South America.
In addition, RISI estimated that the composition of wood pellets from the south of the US is composed of 64 % softwood pulpwood, 12 % of hardwood pulpwood, 12 % of mill residuals and 12 % of forest biomass, that is to say, forest residues or harvest residues material that is too small or of poor quality to be used for pulp. Therefore, the wood pellets would be largely made from material that other industries are also using.
Similarly, Graphic Package International Inc. (GPII) reported that the wood used for manufacturing wood pellets in the south-east of the US are mainly pulpwood sized roundwood and mills residues, with forest residue accounting for only a small fraction of the total wood required of less than 20 %. Wood fibre consumption in the south of the US, by the forest products industry is projected to increase from 170 million dry metric tonnes in 2014 to 182 million tonnes in 2019, that is to say, a growth of approximately 1,4 % per annum.
GPII also added that the increased use of wood fibre by the wood pellet industry is increasing the stumpage price in the south-east of the US, citing data from the consultant, Forest2Market. GPII reported that pine pulpwood stumpage prices in the south of the US increased on average by 11 % in 2013 and by 10 % in 2014.
GPII provided maps with existing and planned wood pellet plants located near two of their paperboard mills. While some pulp, paper and wood products mills shut down in the area concerned, the wood pellet plants represent more than the number of pulp, paper and wood products mills that have been shut down. GPII, therefore, claims that these wood pellet mills create additional distortions.
Westrock, citing the RISI study, also remarked that the share of forest biomass residues in wood pellets from the south of the US would not exceed 12 %. Based on the RISI study, Westrock also claimed that wood fibre consumption by wood pellet producers is forecasted to increase by 14 % annually up to 2019. Over the same period, total wood fibre supply is projected to increase by only 2,0 % annually. This would potentially significantly increase the stumpage price to the disadvantage of the traditional wood industries.
In reply to the decision to open a formal investigation, the United Kingdom provided updated information on the operating parameters of the Drax biomass conversion unit. The mean load factor was increased from 70,5 % to 78 %. The United Kingdom explained that the estimated availability of the Drax plant reflects experience gained in a similar unit converted to biomass and was backed up by independent advice. However, the United Kingdom increased the time that the plant is scheduled to operate, if technically available, to 93,3 % of the available time in a year from 84,1 %. This was the result of eliminating the low gross load factors that were included in view of potential fuel supply constraints. That elimination reflects the increased level of confidence in being able to contract sufficient supplies of wood pellets and in managing the risk of being left with excess biomass at the end of the plant lifetime.
In addition, the United Kingdom reviewed the estimate for the thermal efficiency of the Drax biomass conversion, confirming the previous estimate of 38,6 % thermal efficiency, as it reflects the experience in biomass conversion projects supported by independent advice received by Drax.
Prices based on long-term wood pellet supply contracts are usually higher than the spot price. In the updated submission, the fuel costs are now based on the weighted average of the existing long-term contracts, which account for approximately 77 % of the wood pellet requirements, long-term contracts yet to be finalised which account for approximately 15 % of wood pellet requirements, and estimated spot prices, which account for 7 % of wood pellet requirements. Fuel handling costs, such as UK port costs, UK rail costs, storage, sustainability costs, risk hedging and foreign exchange, are estimated to amount to 1,49 GBP/GJ. Biomass wood pellet costs delivered to the UK port would, therefore, amount to […] GBP/GJ less […] GBP/GJ which equals […] GBP/GJ. This would reflect wood pellet costs of 181 USD per tonne (including costs of insurance and freight (CIF)). The United Kingdom also explained that this price is in line with costs reported by US suppliers that is in the range of 6,27 GBP/GJ to 8,24 GBP/GJ (as estimated by independent consultant, Ricardo Energy & Environment).
According to the United Kingdom, these developments significantly affected the profitability of the Drax biomass conversion project. The estimated IRR is now [4-12] % on a real, pre-tax basis, based on robust parameters and within the hurdle rates.
The United Kingdom confirmed that the beneficiary will not source wood fibre from old growth forests. In line with the requirements of the United Kingdom Timber Standard regulation, wood will be taken only from working forests which are sustainably and actively managed.
Regarding the intention of the beneficiary to procure wood pellets from South America, the United Kingdom clarified that the material sourced from Brazil will come from a single company based in the southern State of Rio Grande do Sul. Some of the surplus wood fibre will be used to make wood pellets. The material to be sourced will be either certified by the Forest Stewardship Council (FSC) Forest Management system or certified as FSC Controlled Wood and the wood pellet company has FSC Chain of Custody certification. The United Kingdom confirmed that the company and its operations have been independently audited to ensure that it meets the United Kingdom's sustainability and legal requirements for biomass.
In response to AFPA data on the composition of wood pellets, the United Kingdom explained that wood fibre derived from forestry practices makes up slightly more than 80 % of US wood pellet mill input material. The United Kingdom notes that this figure is in line with the data reported by RISI when using comparable definitions for the different types of wood.
The wood fibre requirement of 2,4 million tonnes of wood pellets by the Drax biomass conversion unit represented 0,2 % of the total hardwood pulpwood inventory and 0,06 % of total hardwood inventory namely pulpwood and sawtimber. Total wood fibres removals, for all consumers, in the south of the US in 2014 were 250,2 million tonnes, or 3,3 % of the total forestry inventory.
Addressing the studies by FORISK and USDA which link the increased use of biomass with increased stumpage price, the United Kingdom suggested that the projections concerning wood pellet production are overestimated. For example, the USDA study submitted by GPII assumes a demand of over 40 million GST of wood fibre in the southern costal part of the US by 2017, up from around 20 million GST in 2015. This would result in around 18 million tonnes of wood pellets being produced by 2017 in the southern costal part of the US alone. This is considerably higher than the estimates provided by FORISK of 11,6 million tonnes by 2019. Moreover, other factors such as the increased availability of residues are not taken into account.
Regarding the claims concerning the beneficiary ability to pay for wood fibre, the United Kingdom notes that the estimates provided by RISI do not take into account the updated strike price of 100 GBP/MWh instead than 105 GBP/MWh and some extra fuel related costs. The updated average fuel costs for Unit 1 are 8,18 GBP/GJ. The biomass pellet costs amount to […] GBP/GJ, while other fuel related costs, namely costs for port utilisation, rail transport, storage, sustainability certification, hedging and currency exchange, amount to […] GBP/GJ (see recital 51 above). The United Kingdom considers that this figure is within the price range of US wood pellet suppliers estimated by independent consultant, Ricardo Energy & Environment at between 6,27 – 8,24 GBP/GJ.
The United Kingdom submitted that other factors, including a reduced supply of sawmilling residues following the housing market crash, contributed to the recent increase in recorded stumpage prices. To substantiate this point, the United Kingdom claimed that there was no visible correlation between the change in the stumpage prices for pine or hardwood and the presence of significant wood pellet production.
A measure constitutes State aid within the meaning of Article 107(1) of the Treaty if it is ‘granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods […] in so far as it affects trade between Member States’.
As set out in the Opening Decision, the beneficiary (Drax Power Limited) will receive operating aid in the form of a variable premium from a government-owned CfD counterparty for the electricity generated by the converted unit. The measure favours the generation of electricity from renewable energy sources (in this case biomass) by the selected beneficiary. Electricity is widely traded between Member States. The notified measure may therefore distort competition on the electricity market and affect trade between the Member States. In addition, the plant will also compete for biomass fuel in the raw material market as, due to a lack of sufficient local forestry resources, the majority of the wood pellets required to fuel the Drax unit will be imported from abroad (see recital 11 above).
On the basis of the information provided by the United Kingdom, the Commission notes that no final investment decision has yet been taken and that no payments will be made before State aid approval has been obtained. The Commission considers therefore that the United Kingdom has fulfilled its obligations under Article 108(3) of the Treaty.
A number of environmental organisations raised concerns about the environmental effects of the notified project. The United Kingdom confirmed that the notified aid will only be granted to biomass, as defined in paragraph 19(6) of the EEAG. The Commission recalls that the notified aid will help the United Kingdom to reach the Union climate and energy targets for 2020. In addition, the Commission notes that the wood pellets to be used by the Drax biomass conversion plant will be required to satisfy the United Kingdom's own sustainability criteria, including minimum CO2 savings calculated on a life cycle basis. The United Kingdom's sustainability criteria also contain provisions to avoid other negative environmental effects, such as loss of biodiversity.
The Commission concluded in its Opening Decision that the notified aid is necessary, that it has an incentive effect and that it is an appropriate instrument. In particular, with reference to paragraphs 38, 107, 115 of the EEAG, the Commission notes that the market failures, namely the failure to fully include all externalities generated by the use of fossil fuels in the price of energy, are not sufficiently addressed by the existing policy framework and that in the absence of the operating aid under assessment in this Decision, the biomass conversion project would not be financially viable.
With reference to paragraphs 49 and 58 of the EEAG, the United Kingdom showed that the LCOE generated in the Drax converted unit are well above the expected electricity market price and they also provided a financial analysis demonstrating that without the aid under assessment, the IRR of the notified project would be negative. In such a situation, market players would not want to invest in the Drax biomass conversion project. The notified aid therefore would change the beneficiary's behaviour. The United Kingdom confirmed that the beneficiary was required to submit applications and that these applications were submitted before work on the notified project commenced, in compliance with paragraph 51 of the EEAG.
Therefore, the Commission concludes that the aid for the notified project is necessary, that it has an incentive effect and that it is granted by means of an appropriate instrument.
Following the Opening Decision, the United Kingdom submitted updated information about the notified project and in particular it reviewed and updated the operating parameters. On the basis of that updated information the IRR for the notified project is now approximately [4-12] % on a pre-tax real basis which is in line with the hurdle rate.
With regard to the fuel costs, as stated in the Opening Decision, the Commission recognises that the wood pellet supply for the notified project is largely procured by long term contracts where prices may be higher than the spot prices. However, the Commission noted that there were still uncertainties as the existing supply contracts at the date of adoption of the Opening Decision did not cover the entire supply required for the notified project.
Finally, the IRR for the notified project has changed as a consequence of a number of factors including the loss of approximately 1 year of aid as the proposed investment contract will end on 31 March 2027 irrespective of the start date of the measure and also due to unfavourable foreign exchange rate developments. This IRR is, therefore, higher than the value of 4,7 % estimated in the original notification to the Commission. The difference is due to the revised estimates of the plant's operating parameters.
In light of the matters referred to above, the Commission concludes that the estimated IRR of the notified project is based on sound estimates of the plant's costs and operating parameters. Furthermore, the estimated IRR is within the range of hurdle rates required for this type of project. Therefore, the aid does not lead to overcompensation and is proportionate to reach the objective of common interest.
As the aid is granted for the production of electricity from renewable energy sources, the affected product market is the electricity market. With reference to paragraph 89 EEAG, the Commission identifies two main potential distortions caused by aid, namely product market distortions and location effects.
With reference to paragraph 101 of the EEAG, the Commission notes that the project consists of retrofitting a unit in an existing coal fired power plant. As the project converts an existing plant it will not add to the beneficiary generation capacity on the power market. Therefore, the measure will not increase the beneficiary's share of the generation market.
Moreover, the Commission recalls that the electrical generation capacity of the Drax biomass conversion unit corresponds approximately to 1,1 % of the United Kingdom's electricity generation market. Therefore, the measure will not have the negative effect of enhancing the beneficiary's market power.
With reference to paragraphs 94 – 96 EEAG, the Commission considers that the project does not involve a relocation of the activity, and it would also not have a significant impact on competition in the United Kingdom electricity generation market. Therefore, the Commission concludes that the measure would not have any significant impact on competition in the electricity market. Furthermore, the notified aid — due to the interconnectivity level of the United Kingdom — will not adversely affect the trading conditions within the Internal Electricity Market.
In its Opening Decision, the Commission expressed doubts as to whether the notified project distorts competition in the wood pellet market and further upstream in the raw material market to an extent contrary to the common interest. In view of the specific characteristics of this individually notified project, the Commission extended the analysis to indirect effects on the input markets being here secondary markets (see below).
The Commission firstly notes that the Drax unit at hand will only be able to use industrial-grade wood pellets as an input fuel. While some plants may be able to partially substitute wood pellets for other fuels, it is not expected that the Drax unit will be able to substitute wood pellets for other products in view of its design. Therefore for the purpose of analysing further the scale of distortion of competition and trade of the operating aid granted to electricity generated by the retrofitted Drax unit, the industrial wood pellet market constitutes the appropriate product market.
The Commission, as in the Opening Decision, concludes, based on the trade flows, the volume of the imports into the Union and market growth in recent years that, for assessing the market distortions, the wood pellet market is not limited to a single Member State or to the European Union but should be considered a global market. This is confirmed by the large volume of wood pellets imported from oversea to supply the Drax unit and in line with the conclusion reached in case SA.38762 (2014/N).
No indication has emerged from the formal investigation procedure to suggest that the wood pellet market will not be able to expand at similar rates in the coming years to accommodate an increase in demand from the Drax project.
The Commission noted in the recitals 81 to 84 of the Opening Decision that increased demand for wood pellets can lead to further distortions in the raw material market, which is the wood fibre market.
For economic reasons, manufacturing plants of semi-finished pulpwood products source their wood supply from within an average distance of approximately 100 km to 150 km, referred to as the catchment radius of the plant. For this reason wood fibres are a local product while pellets are transported over long distances and have a global market. As a result, in order to assess the notified measure's impact on competition and trade, it is necessary to determine from which local market the wood pellets will or are likely to be sourced.
The Commission notes that most of the wood pellets are sourced from outside the Union and the market for raw materials is local. The effects of increased wood pellets demand on the raw material markets will thus take place to a great extent outside the European Union. It is therefore unlikely that the notified project will affect raw material market prices in the Union.
It should therefore be concluded that the notified measure is not expected to lead to undue distortions in the raw material market. In particular, the Commission notes that the local distortions in the market, to the extent they would occur, are taking place in the south-east of the US and that therefore they would have a limited effect, if any, on trade between Member States. In this respect, it is also recalled that the notified aid would be granted for the production of electricity from solid biomass and that any effects of the aid on the raw material market would be indirect.
As set out in paragraph 97 of the EEAG, for State aid measures that are well targeted to the market failure they aim to address, the risk that the aid will unduly distort competition is more limited. The Commission notes that the notified aid is directly aimed at achieving the Union climate and energy targets for 2020 in a proportionate and appropriate way. Therefore the risk of undue distortions of competition in the electricity market is also more limited as explained in Section 5.2.4.1. As set out in Section 5.2.4.2, the Commission did not find undue distortions in the affected product wood pellet market, nor in the upstream raw material market. The Commission recalls that the potential distortions in the raw material market do not arise directly from the operating aid, but from the increased demand for wood pellets as a fuel for electricity generation. Furthermore, the effects on the raw material market are indirect compared to the distortions in the wood pellet market.
In addition, the Commission is required to assess whether the measure distorts or threatens to distort competition insofar as it affects trade between Member States. The effects in the raw material market are local and mostly take place outside the Union as the majority of the wood pellets for Drax unit will be imported from outside Europe (see recital 10). Therefore, the Commission notes that any effect on trade between Member States arising from an increased stumpage price in the south-east of the US would, in any case, be limited.
The Commission concludes from the above that the negative effects of the notified aid to the electricity generated in the Drax biomass conversion project, in terms of distortions of competition and impact on trade between Member States on the electricity market but also on the secondary markets, are limited and are out-weighted by the positive effects in terms of the contribution to the objective of common interest, namely the production of energy from renewable sources and reduction of CO2 emissions in electricity generation, so that the overall balance is positive.
In the context of the decision in the case SA.36196 (2014/N) on CfD for renewables, the decision in the cases SA.38758 (2014/N), SA.38759 (2014/N), SA.38761 (2014/N), SA.38763 (2014/N) and SA.38812 (2014/N) regarding FIDeR aid to five offshore wind projects, and the cases SA.38762(2015/C)(2014/N) and SA.38796(2014/N) relating to the Lynemouth and Teesside biomass projects, the United Kingdom has committed to adjusting the way in which the electricity suppliers' liabilities for CfD payments are calculated to ensure that eligible renewable electricity generated in the European Union outside the United Kingdom and supplied to customers within the United Kingdom is not taken into account as part of those suppliers' market shares.
The United Kingdom will ensure that no CfD payments are made before this adjustment is in place, or if this is not possible, that the United Kingdom will put in place a mechanism to reimburse electricity suppliers for any imported eligible renewable electricity supplied before the exemption comes into effect but after CfD payments have started to be made.
The commitment by the United Kingdom referred to in recital 127 will also apply to the notified measure. In the light of this commitment, the Commission considers that the financing mechanism of the notified aid measure should not introduce any discrimination contrary to Article 30 or Article 110 of the Treaty.
In light of the matters mentioned above, the Commission considers that the aid measure in support of the Drax biomass conversion unit notified by the United Kingdom on 15 April 2015 pursues an objective of common interest in a necessary and proportionate way in accordance with the EEAG and that it is therefore compatible with the internal market within the meaning of Article 107(3)(c) of the Treaty,
HAS ADOPTED THIS DECISION: