Presidente del Consiglio dei Ministri v Regione Emilia-Romagna (C-653/24)

Contents

Judgment of the Court (Second Chamber)3 September 2026^note(Reference for a preliminary ruling — Services in the internal market — Directive 2006/123/EC — Article 2(1) — Scope — Article 4(1) — Concept of ‘service’ — Selection from among several candidates — Article 12(1) and (2) — Concessions of small-scale hydroelectric diversions and related power plants — National legislation providing for the automatic renewal of concessions granted — Article 49 TFEU)In Case C‑653/24,REQUEST for a preliminary ruling under Article 267 TFEU from the Corte costituzionale (Constitutional Court, Italy), made by decision of 7 October 2024, received at the Court on 7 October 2024, in the proceedingsPresidente del Consiglio dei MinistrivRegione Emilia-Romagna,THE COURT (Second Chamber),composed of K. Jürimäe, President of the Chamber, K. Lenaerts, President of the Court, acting as Judge of the Second Chamber, F. Schalin (Rapporteur), M. Gavalec and Z. Csehi, Judges,Advocate General: M. Campos Sánchez-Bordona,Registrar: C. Di Bella, Administrator,having regard to the written procedure and further to the hearing on 13 October 2025,after considering the observations submitted on behalf of:– Regione Emilia-Romagna, by G. Falcon, avvocato,– the Italian Government, by S. Fiorentino, acting as Agent, and by G. Aiello and G. Iappelli, avvocati dello Stato,– the German Government, by J. Möller and P.-L. Krüger, acting as Agents,– the French Government, by J.-L. Carré, and M. Guiresse, acting as Agents,– the European Commission, by G. Conte and B. Stromsky, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 11 December 2025,gives the following

Judgment

1This request for a preliminary ruling concerns the interpretation of Article 12(1) and (2) of Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market (OJ 2006 L 376, p. 36).

2The request has been made in proceedings between the Presidente del Consiglio dei ministri (President of the Council of Ministers, Italy) and the Regione Emilia-Romagna (Region of Emilia Romagna, Italy) concerning legislation providing for the extension of concessions granted for the operation of small-scale diversion hydroelectric plants.

Legal context

European Union law

3Article 1 of Directive 2006/123, entitled ‘Subject matter’, provides, in paragraph 1 thereof:‘This Directive establishes general provisions facilitating the exercise of the freedom of establishment for service providers and the free movement of services, while maintaining a high quality of services.’

4Article 2 of that directive, entitled ‘Scope’, provides, in paragraph 1 thereof:‘This Directive shall apply to services supplied by providers established in a Member State.’

5Article 4 of that directive, entitled ‘Definitions’, states:‘For the purposes of this Directive, the following definitions shall apply:(1) “service” means any self-employed economic activity, normally provided for remuneration, as referred to in Article 50 [EC] [now Article 57 TFEU];…’

6Article 12 of the directive, entitled ‘Selection from among several candidates’, provides, in paragraphs 1 and 2 thereof:1. Where the number of authorisations available for a given activity is limited because of the scarcity of available natural resources or technical capacity, Member States shall apply a selection procedure to potential candidates which provides full guarantees of impartiality and transparency, including, in particular, adequate publicity about the launch, conduct and completion of the procedure.2. In the cases referred to in paragraph 1, authorisation shall be granted for an appropriate limited period and may not be open to automatic renewal nor confer any other advantage on the provider whose authorisation has just expired or on any person having any particular links with that provider.’

Italian law

Royal Decree No 1775/1933

7Article 6 of regio decreto n. 1775 – Approvazione del testo unico delle disposizioni di legge sulle acque e sugli impianti elettrici (Royal Decree No 1775 on the adoption of the consolidated text of the legislation on water and electricity plants) of 11 December 1933 (GURI No 5 of 8 January 1934), in the version applicable to the case in the main proceedings (‘Royal Decree No 1775/1933’), defines as ‘large-scale’ water diversions for hydroelectric use those which supply plants generating motive power whose average annual nominal power exceeds 3000 kilowatts (kW). Where the nominal power is equal to, or less than, 3000 kW, those water diversions are considered to be ‘small-scale’.

8Article 21 of Royal Decree No 1775/1933 states that all concessions of water diversion channels for hydroelectric use are to be temporary and their duration may not exceed a period of 30 years, on expiry of which those concessions may be renewed in accordance with Article 28 of that royal decree.

Regional Law No 17/2023

9Article 3 of the legge regionale della Regione Emilia-Romagna n^o 17 – Disposizioni collegate alla legge regionale di stabilità per il 2024 (Law of the Emilia-Romagna Region No 17 on provisions relating to the Regional Stability Law for 2024) of 28 December 2023 (Burert No 364 of 28 December 2023), in the version applicable in the main proceedings (‘Regional Law No 17/2023’), provides that ‘where a concessionaire of small-scale hydroelectric diversions with a power which is equal to or less than 3000 kW has been granted incentives for the production of hydroelectric energy, the duration of the concession concerned is to be adjusted, at the request of the concessionaire, to cover the period during which those incentives are received, without prejudice to the maximum duration of thirty years set out in Article 21 of [Royal Decree No 1775/1933]’.

The dispute in the main proceedings and the questions referred for a preliminary ruling

10By an action of 23 February 2024, the President of the Council of Ministers initiated proceedings before the Corte costituzionale (Constitutional Court, Italy), which is the referring court, for the purposes of a review of the constitutionality of Article 3 of Regional Law No 17/2023.

11According to the President of the Council of Ministers, Article 3 infringes the first paragraph of Article 117 of the Costituzione della Repubblica Italiana (Constitution of the Italian Republic), read in conjunction with Article 49 TFEU and Article 12(1) and (2) of Directive 2006/123. The President of the Council of Ministers maintains that the scope of that directive extends to concessions for small-scale water diversion channels for hydroelectric use and that that directive therefore precludes Regional Law No 17/2023 in so far as Article 3 of that law provides for statutory extension of the expiry date of those concessions. That extension corresponds to an automatic renewal of those concessions, on account of the adjustment of the duration of the concession to cover the period in which the holder obtained ‘incentives’ for the production of electricity by means of the activity of water diversion for hydroelectric use.

12The Emilia-Romagna Region contends that Regional Law No 17/2023 does not authorise an extension of those concessions, with the result that energy production by small-scale diversion hydroelectric plants does not fall under the scope of Directive 2006/123. In its view, given the existence of directives specifically dealing with the electricity market, it is unlikely that the concept of ‘service’, within the meaning of Directive 2006/123, could encompass the production of an intangible good, such as hydroelectric power.

13The referring court is uncertain whether the provisions of Regional Law No 17/2023 are compatible with Article 12 of Directive 2006/123, in so far as there are factors which make it possible to classify the production of electricity both as a ‘service’, within the meaning of that directive, and as a ‘good’.

14In those circumstances, the Corte costituzionale (Constitutional Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:(1) Must Article 12(1) and (2) of Directive [2006/123] be interpreted as meaning that it also applies to power plants engaged in the [sole] production of electricity, such as small-scale diversion hydroelectric plants?(2) If the answer to the first question is in the affirmative, must Article 12(1) and (2) of Directive [2006/123] be interpreted as meaning that the reference to the condition of scarcity of natural resources precludes legislation of a Member State which is based on – as an abstract and general criterion for determining whether or not diversion plants are capable of causing water scarcity – the difference between large and small-scale plants (which produce motive power with an annual average nominal power exceeding 3000 kW, and motive power with an annual average nominal power inferior or equal to 3000 kW, respectively)?(3) Last, if the answer to the first and second questions is in the affirmative, must Article 12(2) of Directive [2006/123] be interpreted as meaning that it precludes legislation of a Member State which provides for an extension of the duration of the concession in order to allow the concessionaire to make full use of incentives granted for the production of energy from renewable sources, up to the maximum duration (thirty years) which may, from the outset, be granted to a concession of a small-scale diversion?’

Consideration of the questions referred

The first question

15As a preliminary matter, it should be recalled that, in the procedure laid down by Article 267 TFEU providing for cooperation between national courts and the Court of Justice, it is for the latter to provide the referring court with an answer which will be of use to it and enable it to determine the case before it. To that end, the Court should, where necessary, reformulate the questions referred to it. The Court may also find it necessary to consider provisions of EU law which the national court has not referred to in its questions (see judgments of 20 March 1986, Tissier, 35/85, EU:C:1986:143, paragraph 9; of 28 November 2000, Roquette Frères, C‑88/99, EU:C:2000:652, paragraph 18; and of 1 August 2025, Alace and Canpelli, C‑758/24 and C‑759/24, EU:C:2025:591, paragraph 44).

16The fact that the referring court has formally referred, in its questions, to certain specific provisions of EU law therefore does not prevent the Court from providing it with all the elements of interpretation which may be useful for the judgment in the main proceedings, by extracting from the body of material provided by that court, and in particular from the statement of reasons for the order for reference, the elements of EU law which require interpretation in the light of the subject matter of the dispute (see judgments of 29 November 1978, Redmond, 83/78, EU:C:1978:214, paragraph 26, and of 1 August 2025, Alace and Canpelli, C‑758/24 and C‑759/24, EU:C:2025:591, paragraph 45).

17In the present case, it is clear from the request for a preliminary ruling that the referring court has been called upon to rule on the compatibility with EU law of national legislation providing for the automatic renewal of concessions for small-scale water diversion channels for hydroelectric use. Thus, in its first question, the referring court asks whether Directive 2006/123 is applicable to such power plants.

18In those circumstances, it must be held that, by its first question, the referring court asks, in essence, whether Article 2(1), Article 4(1) and Article 12(1) and (2) of Directive 2006/123 must be interpreted as meaning that that directive applies to plants whose sole activity, or, at least, whose principal activity, is the production of electricity, such as small-scale diversion hydroelectric plants.

19In that regard, it should be noted that Directive 2006/123 applies, in accordance with Article 2(1) thereof, to services supplied by providers established in a Member State, the concept of ‘service’ being defined in Article 4(1) of that directive as ‘any self-employed economic activity, normally provided for remuneration, as referred to in Article [57 TFEU]’.

20Furthermore, Article 12(1) of that directive refers to the specific situation in which the number of authorisations available for a particular activity may be limited due to the scarcity of available natural resources or technical capacity. In such a situation, pursuant to paragraph 2 of that article, authorisation is to be granted for a limited period, following a selection procedure between candidates. Furthermore, that authorisation must not be open to automatic renewal and must not confer any other advantage on the provider whose authorisation has just expired.

21In that context, it is apparent from the order for reference that small-scale hydroelectric diversion plants are engaged in the sole production of electricity, intended either for the sale of electricity, by means of its ‘injection into the grid’, or, mainly or exclusively, for self-consumption.

22In this respect, it is apparent from the case-law of the Court that electricity is a commodity, a good and a product, and that the activity of producing a product cannot be regarded, in itself, as a service. It follows that the production of electricity, as an activity of producing a good, does not constitute the provision of a service (see, to that effect, judgments of 27 April 1994, Almelo, C‑393/92, EU:C:1994:171, paragraph 28, and of 28 May 2020, ECO-WIND Construction, C‑727/17, EU:C:2020:393, paragraphs 56 and 57).

23Furthermore, the Court also held that the fact that the activity of producing electricity is accompanied by a provision of services does not lead to a different assessment where the services concerned are ancillary to the principal activity of generating electricity (see, to that effect, judgment of 28 May 2020, ECO-WIND Construction, C‑727/17, EU:C:2020:393, paragraph 59).

24In the present case, the referring court notes that the sole activity of small-scale hydroelectric diversion plants is the production of electricity. Therefore, according to the case-law cited in paragraph 22 of the present judgment, it must be held that Directive 2006/123 cannot apply to those small-scale plants.

25That finding cannot be called into question by the Italian Government’s argument that small-scale hydroelectric diversion plants carry out activity which goes beyond the mere production of a good. In particular, that government argues that the operator of such an installation is required to carry out a series of activities inherent in the operation of that type of plant such as the limiting of water catchment to amounts compatible with the recharging of the aquifer concerned or the activities necessary to safeguard the public interest associated with water resources, while ensuring that the hydrogeological balance is not upset.

26In that regard, as the Advocate General noted, in essence, in points 37 and 39 of his Opinion, the fact that the activity of generating energy by means of small-scale hydroelectric diversion installations is subject to fulfilment of obligations which aim to protect public health or the public interest is not sufficient to transform the production of the good concerned into the provision of services.

27In the present case, even assuming that the activities relating to managing the flow rate and maintaining the hydrogeological balance could be classified, as such, as ‘provisions of services’, they would only be ancillary services to the principal activity of electricity generation, within the meaning of the case-law referred to in paragraph 23 of the present judgment.

28In so far as such additional activities are ‘provisions of services’, they are inherently ancillary since the economic operator concerned cannot carry them out independently and as a main activity, as a ‘self-employed economic activity, normally provided for remuneration’, within the meaning of Article 4(1) of Directive 2006/123. Moreover, those activities are intrinsically linked to the right to divert public water from its natural course, in the context of concessions granted for the operation of small-scale hydroelectric diversion plants, which is inseparable from the specific and main objective of the production of hydroelectric energy.

29Similarly, the European Commission’s argument that network balancing services may, in certain situations, be classified as ‘provisions of services’, such that Directive 2006/123 would apply to all plants, must be rejected, as the Advocate General observed in points 51 and 52 of his Opinion. The possible provision of network balancing ‘services’ does not alter the activity of water diversion for hydroelectric use, whether in a large-scale or small-scale plant. The principal activity remains, in any event, the generation of energy. That finding was, moreover, confirmed by the Italian Government at the hearing. The possible provision of network balancing services would entail only a temporary increase in that generation in order to respond to an exceptional need. Similarly, the Commission acknowledged at the hearing that, at least in the case of small-scale hydroelectric diversion plants, it is a merely occasional activity.

30As regards the Italian Government’s argument based on Annex I to Commission Regulation (EC) No 213/2008 of 28 November 2007 amending Regulation (EC) No 2195/2002 of the European Parliament and of the Council on the Common Procurement Vocabulary (CPV) and Directives 2004/17/EC and 2004/18/EC of the European Parliament and of the Council on public procurement procedures, as regards the revision of the CPV (OJ 2008 L 74, p. 1), which classifies the operation of a power plant, under the code 65410000-0, as a service, such a classification is not decisive.

31In that regard, as the Advocate General noted in points 44 and 45 of his Opinion, the operation of a power plant and the generation of electricity are two distinct activities, of which the respective legal regimes are not necessarily the same. Moreover, there is nothing to prevent the electricity producer concerned from entrusting the operation of its power plant to a third party, as the case may be, a service provider, without that depriving that producer of its status as a producer or entailing a genuine service concession or the award of a public service contract.

32Lastly, the judgment of 14 July 2016, Promoimpresa and Others (C‑458/14 and C‑67/15, EU:C:2016:558), relied on by the Italian Government, is not capable of calling into question the foregoing conclusions. In that judgment, the Court did not hold that Directive 2006/123 applies to all concessions relating to an authorisation to exercise an economic activity on State-owned land. On the contrary, it is apparent from that judgment that the application of that directive depends, inter alia, on whether the activity carried out by means of the use of State-owned land can be classified as a ‘service’ within the meaning of Article 4(1) of that directive. The cases which gave rise to that judgment concerned a concession for the use of State-owned land for tourist and leisure-oriented purposes and therefore an economic activity which could be classified as a ‘service’. By contrast, the subject matter of the concessions covered by the national legislation at issue in the main proceedings concerns the generation of electricity and therefore the production of a good, by means of diverted public water.

33In the light of all the foregoing considerations, the answer to the first question is that Article 2(1), Article 4(1) and Article 12(1) and (2) of Directive 2006/123 must be interpreted as meaning that that directive does not apply to plants whose sole activity, or, at least, whose principal activity, is the production of electricity, such as small-scale diversion hydroelectric plants.

The second and third questions

34In the light of the answer given to the first question, there is no need to reply to the second and third questions.

Costs

35Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

Operative part

On those grounds, the Court (Second Chamber) hereby rules: Article 2(1), Article 4(1) and Article 12(1) and (2) of Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal marketmust be interpreted as meaning that that directive does not apply to power plants whose sole activity, or, at least, whose principal activity, is the production of electricity, such as small-scale diversion hydroelectric plants.