Conou, what doesn’t run smoothly according to the Antitrust

The Antitrust has opened an investigation into Conou, the consortium that deals with the recycling of used oils, for abuse of a dominant position. All the details on the investigation, the internal war within Conou and the official position of the consortium

Abuse of dominant position . This is the suspicion on the basis of which the Competition and Market Authority has opened an investigation against Conou, the National Consortium for the management, collection and treatment of Used Mineral Oils .

WHAT IS CONOU: A CONSORTIUM IN WHICH PUBLIC AND PRIVATE COLLABORATE

Conou, National Consortium of Used Mineral Oils , is a consortium that transforms used lubricating oils from waste into resources. Lubricating oils are obtained by mixing base oils (mineral or synthetic) and additives, and are mainly used in the industrial and automotive sectors, as they allow the correct functioning of systems and engines by reducing the friction of moving mechanical components .

Given their highly polluting potential if dispersed into the environment, community and national legislation has been concerned since the 1970s/80s with ensuring the existence of collection systems for the management and recovery of used lubricating oils . In our country approximately 99% of used oils are sent for regeneration. Conou avails itself of the collaboration of around 60 companies throughout the national territory that collect used oil to send it for recovery and disposal. Conou's turnover in 2022 was approximately 72 million euros. It is worth remembering that within Conou the private and public sectors collaborate: representatives of the ministries of Ecological Transition and Economic Development are part of the Conou board of auditors.

CONOU: THE LEGAL MONOPOLIST POSITION

The Competition and Market Authority wants to ascertain an alleged violation of the art. 102 of the TFEU, the abuse of a dominant position. Conou plays a role as a legal monopolist, therefore dominant, in the recycling of hazardous waste represented by used lubricating oils.

ROBI AND GRASSANO SPA: THE TWO COMPANIES THAT HAVE REPORTED CONOU TO THE ANTITRUST

The appeal was made to the Authority by two companies active in the same sector of expertise as Conou. The first is RobiI Srl (acronym for "Raccolta Oli Bruciati Industriali") is a company based in the province of Bergamo (Treviolo), specialized in the collection of special waste: solvents, accumulators, electrical and electronic equipment, tyres, sludge, medicines. Since 2005, Robi has developed a local plant for the treatment of used lubricating oils aimed at the production of base oil intended for the rubber and bitumen industry. Robi Srl's turnover in 2022 was approximately 11 million euros.

The second is Grassano SpA, part of the Riccoboni group which carries out environmental activities throughout the national territory. Grassano collects and is capable of managing up to 10 thousand tons of used mineral oils per year. Grassano's turnover in 2022 was approximately 38 million euros.

Conou, in the accusations of Robi Srl and Grassano SpA, would have unjustifiably hindered the operation of two used oil regeneration plants with "proximity" characteristics and with potential environmental benefits, to the advantage of the only two regenerators historically active in the Italian market and recognized by the Consortium. Conou, in addition to hindering the operations of the Robi company , would not have paid it the regeneration fee for the activity carried out and would not have paid the collection contribution on the volumes of used oils processed by its plant. Furthermore, against Grassano Conou would have judicially contested the issue of the integrated environmental authorization by the competent authorities.

Robi, with the initial support of Conou and under the supervision of the competent authorities, invested in the early 2000s to expand its scope of activity in the downstream regeneration market, creating a small plant on the same site where the warehouse of used oils that it collects, in Treviolo (Bergamo). According to what is reported in the Antitrust provision, “Conou initially participated in the Robi trials with a collaborative spirit, signing a specific program agreement with the latter and the Lombardy Region in 2005.

On 26 October 2017, Conou then signed a private agreement with Robi , undertaking to provide the fee for the regeneration activity after the ruling by the competent body, third to the parties ( i.e. ARPALombardia)". Conou, according to Robi's accusations, began to oppose the company when the latter requested compensation for the regeneration "claiming that it cannot be classified as " regeneration ", as the base oils obtained at its plants are intended for the bitumen and rubber supply chain (even though this purpose was originally foreseen by Robi's experimentation) and do not qualify as highly refined regenerated oils". Furthermore, Conou "would have imposed a series of requirements that companies must respect to qualify as " regenerators " recognized by the Consortium".

GRASSANO SPA'S ACCUSATIONS AGAINST CONOU

Robi, in his report, reported to the Antitrust that he was aware of similar behavior by Conou towards Grassano Spa. "From the information provided it can be seen that the Piedmontese company, unlike Robi, has not yet built the plant for the regeneration of used oils that it already collects in the area (and which it currently gives, as a concessionaire, to the two regeneration plants recognized by Conou)".

The Consortium "would have intervened with conflicting positions" regarding the "issuing of the authorization for the Grassano plant". In particular "in an initial phase (February 2016) the technical director of Conou expressed a favorable opinion at a services conference; at this stage observations were raised by Itelyum on the alleged non-correspondence of the process followed by the Grassano plant with the 2018 Brefs (objections that Conou will re-present during the review phase of the Grassano AIA in the years 2021/2022).

The AIA with requirements was released in April 2017 . Following the release, Grassano filed a request to modify the provisions. The procedure was then concluded positively in September 2022 following a long investigation, with the favorable opinions of all the bodies involved, with the exception of the Conou". The Consortium, despite Grassano having obtained a favorable AIA decision from Piedmont, challenged it, arguing "that the process followed by the company is not suitable for obtaining the regeneration fee".

THE DECISION OF THE ANTITRUST AUTHORITY: THE OPENING OF AN INVESTIGATION INTO CONOU

The Authority considered that Conou's exclusionary strategy "aimed at preventing Robi and Grassano from effectively operating in the market for the regeneration of used lubricating oils", which moreover could have presented "advantages in terms of technology and proximity in the waste treatment”, appears to constitute “a possible violation of article 102, letters b) and c) of the TFEU”. And for this reason he decided to open an investigation.

CONOU'S REPLY: FULL TRUST IN ANTITRUST BUT DENIALS ABUSE OF DOMINANT POSITION

The Consortium, for its part, denied having exercised an abuse of its dominant position as suspected by the Antitrust. “With reference to the preliminary proceedings of the Competition and Market Authority initiated against Conou for an alleged abuse of a dominant position, the Consortium, which is non-profit, places absolute trust in the Authority's activity and is confident that the full correctness of their actions will be confirmed – we read in a press release from Conou -. The Consortium specifies that the disputes regarding the alleged nature of regeneration plants of the reporting companies have always been carried out at the competent administrative and judicial offices in the exercise of the Consortium prerogatives and with full compliance with the rules on competition, to which it is also bound for statutory provisions".

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This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/conou-cosa-non-fila-liscio-come-lolio-secondo-lantitrust/ on Fri, 13 Oct 2023 14:07:11 +0000.