Judgment of the Court (Sixth Chamber) of 21 May 2026.#RZ and Others v Région wallonne.#Requests for a preliminary ruling from the Cour d'appel de Mons.#Reference for a preliminary ruling – State aid – Block exemption for certain types of aid to the agriculture and forestry sectors – Regulation (EU) No 702/2014 – Aid intended to compensate for damage caused by adverse climatic event which can be assimilated to a natural disaster – Reduction of the amount of aid in the event of failure to take out insurance covering at least 50% of the beneficiary’s average annual production or production-related income and the most frequent climatic risks in the Member State or region concerned – Article 25(9) – Impossibility for the beneficiary of the aid to take out the required insurance.#Joined Cases C-52/25 and C-53/25.

Provisional text

JUDGMENT OF THE COURT (Sixth Chamber)

21 May 2026 (*)

( Reference for a preliminary ruling – State aid – Block exemption for certain types of aid to the agriculture and forestry sectors – Regulation (EU) No 702/2014 – Aid intended to compensate for damage caused by adverse climatic events which can be assimilated to a natural disaster – Reduction of the amount of aid in the event of failure to take out insurance covering at least 50% of the beneficiary’s average annual production or production-related income and the most frequent climatic risks in the Member State or region concerned – Article 25(9) – Impossibility for the beneficiary of the aid to take out the required insurance )

In Joined Cases C‑52/25 [Binanrier] (i) and C‑53/25 [Beaudeluc], ⁱ

TWO REQUESTS for a preliminary ruling under Article 267 TFEU from the cour d’appel de Mons (Court of Appeal, Mons, Belgium), made by decisions of 21 January 2025, received at the Court on 28 January 2025, in the proceedings

RZ,

GT (C‑52/25),

AX,

UI (C‑53/25)

v

Région wallonne,

THE COURT (Sixth Chamber),

composed of A. Kumin, acting as President of the Chamber, S. Gervasoni and M. Bošnjak (Rapporteur), Judges,

Advocate General: A. Biondi,

Registrar: A. Calot Escobar,

having regard to the written procedure,

after considering the observations submitted on behalf of:

–        the Belgian Government, by P. Cottin, C. Pochet and M. Van Regemorter, acting as Agents, and by X. Drion, avocat,

–        the European Commission, by A. Bouquet, C. Kovács and S. Verschraegen, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 15 January 2026,

gives the following

Judgment

1        These requests for a preliminary ruling concern the interpretation of Article 25(9) of Commission Regulation (EU) No 702/2014 of 25 June 2014 declaring certain categories of aid in the agricultural and forestry sectors and in rural areas compatible with the internal market in application of Articles 107 and 108 [TFEU] (OJ 2014 L 193, p. 1).

2        The requests have been made in two sets of proceedings between, first, RZ and GT (Case C‑52/25) and, secondly, AX and UI (Case C‑53/25), farmers, and the Région wallonne (Belgium) concerning compensation for damage suffered as a result of a drought.

 Legal context

 European Union law

3        Recitals 10, 42 and 54 of Regulation No 702/2014, in force at the material time and replaced since then, were worded as follows:

‘(10)      The general conditions for the application of this Regulation should be defined on the basis of a set of common principles that ensure that the aid serves a purpose of common interest, has a clear incentive effect, is appropriate and proportionate, is granted in full transparency and subject to a control mechanism and regular evaluation, and does not adversely affect trading conditions to extent that is contrary to the common interest.

…

(42)      Those categories of aid should in particular encompass … risk and crisis management aid such as aid to compensate for losses caused by adverse climatic events which can be assimilated to a natural disaster … That aid should be especially aimed at enhancing the competitiveness and the viability of the whole agricultural sector.

…

(54)      Good risk and crisis management is a key tool for a sustainable and competitive agricultural sector. Primary agricultural production is exposed to particular natural, climatic and health risks and crises. Therefore, risk and crisis management aid and the aid for the livestock sector should be limited to [small and medium-sized enterprises (SMEs)] active in primary agricultural production. State aid for making good losses caused by adverse climatic events that can be assimilated to natural disasters, aid for combating animal diseases and plant pests and aid for paying insurance premiums should be limited to helping beneficiaries facing particular difficulties despite having undertaken reasonable efforts to minimise such risks. State aid should not have as its effect to entice beneficiaries into taking unnecessary risks. SMEs active in primary agricultural production should themselves bear the consequences of imprudent choices of production methods or products.’

4        Article 3 of that regulation, entitled ‘Conditions for exemption’, provided:

‘Aid schemes, individual aid granted under aid schemes and ad hoc aid shall be compatible with the internal market within the meaning of Article 107(2) or (3) [TFEU] and shall be exempted from the notification requirement of Article 108(3) [TFEU] provided that such aid fulfils all the conditions laid down in Chapter I of this Regulation, as well as the specific conditions for the relevant category of aid laid down in Chapter III of this Regulation.’

5        Article 25 of that regulation, entitled ‘Aid to compensate for damage caused by adverse climatic event which can be assimilated to a natural disaster’, provided:

‘1.      Aid to compensate SMEs active in the primary agricultural production for damage caused by an adverse climatic event which can be assimilated to a natural disaster shall be compatible with the internal market within the meaning of Article 107(3)(c) [TFEU] and shall be exempted from the notification requirement of Article 108(3) thereof where it fulfils the conditions laid down in paragraphs 2 to 10 of this Article and in Chapter I.

…

9.      Aid granted under this Article shall be reduced by 50% unless it is granted to beneficiaries who have taken out insurance covering at least 50% of their average annual production or production-related income and the statistically most frequent climatic risks in the Member State or region concerned for which insurance coverage is provided.

…’

 Belgian law

6        Article 6 of the arrêté du gouvernement wallon, du 23 août 2018, considérant comme une calamité agricole la sécheresse d’août 2016 à juin 2017, délimitant l’étendue géographique de cette calamité et déterminant l’indemnisation des dommages (order of the Walloon Government considering the drought from August 2016 to June 2017 to be an agricultural disaster, delimiting the geographical extent of that disaster and determining compensation for the damage, Moniteur belge of 4 September 2018, p. 68445; ‘the order of 23 August 2018’) provides:

‘For the purposes of compensation, the amounts resulting from the application of Article [5] shall be reduced by 50% if the claimant has not taken out insurance covering at least 50% of his or her production against climatic risks.’

 The disputes in the main proceedings, the questions referred for a preliminary ruling and the procedure before the Court of Justice

7        The applicants in the main proceedings, whose agricultural holdings consist of permanent and temporary pastures and grassland intended for feeding livestock, suffered damage during periods of drought which took place between August 2016 and June 2017. By the order of 23 August 2018, the Walloon Government (Belgium) recognised that drought as an agricultural disaster giving rise to a right to compensation under national law. The applicants in the main proceedings submitted claims for compensation in that regard.

8        On 31 October 2018, the Governor of the Province of Luxembourg (Belgium) made a proposal for compensation in an amount reduced by 50%, pursuant to Article 6 of the order of 23 August 2018, on the ground that the applicants in the main proceedings had not taken out insurance covering at least 50% of their production against climatic risks.

9        The applicants in the main proceedings challenged the validity of that proposal, arguing that the insurance available in Belgium did not offer the possibility of covering agricultural holdings against the risk of drought. By two decisions of 10 December 2018, the Governor of the Province of Luxembourg nevertheless awarded compensation to the applicants in the main proceedings in an amount reduced by 50%.

10      By two judgments of 15 March 2021, the cour d’appel de Liège (Court of Appeal, Liège, Belgium) dismissed the applicants’ appeal against those two decisions, on the ground that Article 6 of the order of 23 August 2018 is consistent with Article 25(9) of Regulation No 702/2014, pursuant to which aid is to be reduced by 50% unless it is granted to beneficiaries who have taken out insurance covering at least 50% of their average annual production or production-related income and the statistically most frequent climatic risks in the Member State or region concerned. Since the most frequent climatic event in Belgium is hail and there exists, in that Member State, insurance covering the risks associated with that type of climatic event, that court considered that it would have been possible for the applicants in the main proceedings to take out such insurance.

11      By judgments of 19 January 2023, the Cour de cassation (Court of Cassation, Belgium) set aside those two judgments on the ground that the cour d’appel de Liège (Court of Appeal, Liège) had not taken account of the argument of the applicants in the main proceedings that it had been impossible for them to take out insurance against hail, since that insurance did not cover damage caused to permanent and temporary pastures.

12      The cases were referred back to the cour d’appel de Mons (Court of Appeal, Mons, Belgium), which is the referring court. Before that court, the applicants in the main proceedings claim, first, that, in Belgium, at the time when the droughts in question took place, it was not possible to insure an agricultural holding against such a risk. Secondly, while it is true that insurance covering the risk of hail existed, the applicants in the main proceedings did not have access to it, since their agricultural land could not be insured against such a risk, given the particular characteristics of that land. The applicants in the main proceedings argue that Article 6 of the order of 23 August 2018 is discriminatory in that it does not allow farmers to demonstrate that they were unable to insure more than 50% of their production against the risk concerned, or even against the statistically most frequent climatic risk in Belgium.

13      The referring court is uncertain as to the scope of Article 25(9) of Regulation No 702/2014 and whether Article 6 of the order of 23 August 2018 is consistent with that provision. In that regard, it observes that Article 6 does not take into account the fact that a claimant may not have been able either to take out insurance against the specific climatic risk that caused their loss, in this case drought, or to insure their agricultural holding against other climatic risks.

14      In those circumstances, the cour d’appel de Mons (Court of Appeal, Mons), decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘(1)      Does Article 25(9) of [Regulation No 702/2014], providing that aid to compensate SMEs active in the primary agricultural production for damage caused by an adverse climatic event which can be assimilated to a natural disaster … is to be reduced by 50% unless it is granted to beneficiaries who have taken out insurance covering at least 50% of their average annual production or production-related income and the statistically most frequent climatic risks in the Member State or region concerned for which insurance coverage is provided, apply if the aid is intended to compensate farmers for damage caused by a climatic event considered to be a natural disaster (in this case, drought) which is not one of the statistically most frequent climatic risks in the Member State concerned (in this case, [the Kingdom of] Belgium)?

(2)      Does the reduction provided for in that article apply if the aid is intended to compensate farmers for damage caused by a climatic event considered to be a natural disaster (in this case, drought) which is not one of the climatic risks for which insurance cover is available in the Member State concerned (in this case, [the Kingdom of] Belgium), even though there are insurance policies covering other – statistically more frequent – climatic risks (in this case, hail) which the farmer receiving the aid could have taken out?

(3)      Does that article allow the Member State concerned not to reduce the aid intended to compensate farmers for damage caused by a climatic event considered to be a natural disaster, where the aid beneficiary demonstrates that the type of production in which he or she engages (in this case, permanent and temporary [pastures], as well as grassland for feeding livestock, and not crops) is not insurable in the Member State concerned (in this case, [the Kingdom of] Belgium) against the statistically most frequent climatic risks, up to an amount of at least 50% of the average annual production or production-related income of his or her farm?’

15      By decision of the President of the Court of 24 February 2025, Cases C‑52/25 and C‑53/25 were joined for the purposes of the written procedure and the judgment.

 Consideration of the questions referred

 The first and second questions

16      By its first and second questions, which it is appropriate to examine together, the referring court asks, in essence, whether Article 25(9) of Regulation No 702/2014 must be interpreted as meaning that aid intended to compensate an SME active in primary agricultural production for damage caused by an adverse climatic event which can be assimilated to a natural disaster must be reduced by 50% where that SME is not insured against the statistically most frequent climatic risks in the Member State or region concerned, in a situation where the aid concerned is intended to compensate for damage caused by such a climatic event which, first, is not one of those risks and, secondly, does not constitute an insurable risk in that Member State or in the region concerned.

17      In accordance with Article 25(1) of Regulation No 702/2014, aid to compensate SMEs active in primary agricultural production for damage caused by an adverse climatic event which can be assimilated to a natural disaster is to be compatible with the internal market within the meaning of Article 107(3)(c) TFEU and is to be exempted from the notification requirement laid down in Article 108(3) TFEU where it fulfils the conditions laid down, inter alia, in paragraphs 2 to 10 of Article 25 of that regulation.

18      The provisions thus referred to include Article 25(9) of Regulation No 702/2014, pursuant to which aid granted under that article is to be reduced by 50% unless it is granted to beneficiaries who have taken out insurance covering at least 50% of their average annual production or production-related income and the statistically most frequent climatic risks in the Member State or region concerned for which insurance coverage is provided.

19      In order to answer the questions referred, it must be borne in mind that, in accordance with settled case-law, in interpreting a provision of EU law, it is necessary to consider not only its wording, but also the context in which it occurs and the objectives pursued by the rules of which it is part (see, to that effect, judgment of 13 November 2025, JYSK, C‑117/24, EU:C:2025:872, paragraph 23 and the case-law cited).

20      As regards the wording of Article 25(9) of Regulation No 702/2014, that provision states that the aid granted under that article is, in principle, to be reduced by 50% unless the beneficiary has taken out insurance covering ‘at least 50% of their average annual production or production-related income’ and, with respect to the definition of the risks covered, ‘the statistically most frequent climatic risks in the Member State or region concerned …’.

21      That provision thus sets out the two cumulative conditions which the insurance taken out by the beneficiary of the aid must satisfy if that aid is not to be reduced by 50%. No reference is made in that provision to the climatic risk which actually caused the damage giving rise to the grant of aid, or to the taking out of insurance specifically covering that risk. It follows, therefore, from a literal interpretation of Article 25(9) of Regulation No 702/2014 that neither the nature of the climatic risk which actually gives rise to damage for which compensation may be awarded, nor whether that particular risk, in the present case drought, was actually insurable, are relevant when determining whether or not the aid concerned must be reduced by 50% under that provision. The only verification which the competent national authorities are required to carry out in that context is to check whether or not the potential beneficiary of the aid has taken out insurance meeting the abovementioned conditions, in particular to ensure that he or she has taken out insurance against a risk that is among the statistically most frequent climatic risks in the Member State or region concerned.

22      That interpretation is entirely consistent with the objective pursued by Article 25(9) of Regulation No 702/2014.

23      As is apparent from recital 54 of that regulation, aid for making good losses caused by adverse climatic events which can be assimilated to natural disasters is in line with good risk and crisis management and is intended to help SMEs facing particular difficulties despite having undertaken reasonable efforts to minimise the risks, including climatic risks, to which primary agricultural production is exposed. It also follows from recitals 10 and 42 of that regulation that such aid should have a clear incentive effect, while enhancing the competitiveness and viability of the entire EU agricultural sector.

24      The objective of the reduction provided for in Article 25(9) of that regulation is thus to encourage SMEs active in primary agricultural production to take out insurance covering the climatic risks to which they are statistically most exposed. By making the grant of the full amount of the aid subject to the condition that the potential beneficiaries of the aid have taken out insurance capable of minimising the financial consequences of foreseeable climatic risks on their agricultural activity, the EU legislature sought to reduce the economic dependence of the SMEs concerned on the agricultural aid granted under compensation schemes for damage caused by adverse climatic events which can be assimilated to a natural disaster, while limiting, overall, the total amount of that aid.

25      Reducing the amount of aid granted for damage caused by a climatic phenomenon by 50%, pursuant to Article 25(9) of Regulation No 702/2014, in a situation where, first, that phenomenon is not among the statistically most frequent climatic risks in the Member State or region concerned and, secondly, is not insurable in that Member State or region, does not appear to be contrary to that objective. On the contrary, if it were to be considered that, in such a situation, the aid in question could not be reduced by 50%, that would risk diminishing the overall incentive effect across the entire primary agricultural sector in favour of insurance cover that is as comprehensive as possible.

26      In the light of the foregoing, the answer to the first and second questions is that Article 25(9) of Regulation No 702/2014 must be interpreted as meaning that aid intended to compensate an SME active in primary agricultural production for damage caused by an adverse climatic event which can be assimilated to a natural disaster must be reduced by 50% where that SME is not insured against the statistically most frequent climatic risks in the Member State or the region concerned, in a situation where the aid concerned is intended to compensate for damage caused by such a climatic event which, first, is not one of those risks and, secondly, does not constitute an insurable risk in that Member State or in the region concerned.

 The third question

27      By its third question, the referring court asks, in essence, whether Article 25(9) of Regulation No 702/2014 must be interpreted as meaning that aid intended to compensate an SME active in primary agricultural production for damage caused by an adverse climatic event which can be assimilated to a natural disaster must be reduced by 50% where that SME was not able to take out insurance satisfying the conditions of that provision for the type of production in which it is engaged, having regard to the insurance available on the relevant insurance market.

28      It follows from paragraph 21 above that Article 25(9) of Regulation No 702/2014 merely sets out the two conditions which must be satisfied by the insurance taken out by the beneficiary of aid granted under that article if that aid is not to be reduced by 50%, in accordance with that provision.

29      Thus, the wording of Article 25(9) of Regulation No 702/2014 does not, in itself, make it possible to determine whether, before reducing aid in accordance with that provision, the competent national authorities are required to verify whether, having regard to the insurance available on the relevant insurance market, the beneficiary of the aid was in fact able to take out insurance satisfying the conditions laid down in that provision for the type of production in which it is engaged. In particular, that wording does not lead to the unequivocal conclusion that the reduction of the aid by 50%, provided for as a general rule, is not intended to apply where the beneficiary does not have access to such insurance. In those circumstances, the answer to the third question requires a teleological interpretation of Article 25(9) of Regulation No 702/2014.

30      In that regard, as is apparent from paragraph 24 above, the objective of the reduction provided for in that provision is to encourage SMEs active in primary agricultural production to take out insurance covering the climatic risks to which they are statistically most exposed, in order to reduce their economic dependence on agricultural aid granted under compensation schemes for damage caused by adverse climatic events which can be assimilated to a natural disaster.

31      In the context of good risk and crisis management, taking out insurance satisfying the conditions laid down in Article 25(9) of Regulation No 702/2014 forms part of the reasonable efforts which may legitimately be required of SMEs active in the primary agricultural sector in order to minimise the financial consequences of foreseeable climatic risks on their activity. Where the beneficiary of aid has not made such efforts and has failed to take out adequate insurance for its holding, the substantial reduction in aid provided for in Article 25(9) of that regulation is justified as a direct consequence of that conduct.

32      However, as the Advocate General observed, in essence, in points 28 and 29 of his Opinion, such a consequence cannot be imposed in the exceptional case where insurance meeting the requirements of Article 25(9) of Regulation No 702/2014 is unavailable on the relevant market. In that case, the beneficiary of the aid cannot be criticised for failing to make all reasonable efforts to minimise the financial consequences of foreseeable climatic risks on its activity by taking out such insurance. That beneficiary was not in a position to reduce, on its own initiative, its economic dependence on the compensation schemes, with the result that the incentive objective underlying the reduction of the aid becomes devoid of purpose. That conclusion is all the more compelling since the beneficiary of the aid remains exposed to the full financial consequences of the damage which it has suffered and for which the aid it may claim is intended to compensate.

33      It follows that aid granted under Article 25 of Regulation No 702/2014 should not be reduced in accordance with paragraph 9 of that article where it is established that, in the light of the offer available on the relevant insurance market, the beneficiary of the aid was not able to take out insurance satisfying the conditions laid down by that provision for the type of production in which it is engaged. It is for the beneficiary of the aid, where applicable, to establish the factual and legal circumstances demonstrating the existence of such a situation.

34      In that regard, it must be stated, first, that that interpretation of Article 25(9) of Regulation No 702/2014 is not contrary to the requirement for a uniform interpretation of that provision. As the Advocate General stated, in essence, in point 33 of his Opinion, that interpretation ensures that the reduction of aid applied under that provision is done on the basis of an objective criterion and in accordance with the requirement of good risk and crisis management.

35      Secondly, there is nothing to suggest that that interpretation would be liable to give rise to distortions of competition in the European Union’s primary agricultural sector. On the contrary, the fact that aid granted under Article 25 of Regulation No 702/2014 does not have to be reduced in accordance with paragraph 9 of that article in a situation where the beneficiary of that aid was unable to take out insurance satisfying the conditions laid down in that paragraph is liable to remedy the disadvantages, for SMEs active in that sector, resulting from the absence of a European insurance market capable of offering complete and uniform insurance services in each Member State.

36      In the present case, it is apparent from the order for reference that, in Belgium, the most frequent climatic risk is hail and that, at the time of the events which gave rise to the dispute in the main proceedings, insurance cover against that risk was indeed available on the Belgian insurance market. The applicants in the main proceedings submit, however, that, in view of the particular features of their holdings, characterised by permanent and temporary pastures and by grassland intended for feeding livestock, it was impossible for them to take out insurance against hail covering at least 50% of their average annual production or production-related income.

37      It is for the referring court to ascertain whether, in the light of all the information available to it, it can be established that, in view of the insurance available on the relevant insurance market, the applicants in the main proceedings were indeed unable to take out insurance satisfying the conditions laid down in Article 25(9) of Regulation No 702/2014.

38      In the light of the foregoing, the answer to the third question is that Article 25(9) of Regulation No 702/2014 must be interpreted as meaning that aid intended to compensate an SME active in primary agricultural production for damage caused by an adverse climatic event which can be assimilated to a natural disaster must not be reduced by 50% where that SME was not able to take out insurance satisfying the conditions of that provision for the type of production in which it is engaged, having regard to the insurance available on the relevant insurance market.

 Costs

39      Since 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.

On those grounds, the Court (Sixth Chamber) hereby rules:

1.      Article 25(9) of Commission Regulation (EU) No 702/2014 of 25 June 2014 declaring certain categories of aid in the agricultural and forestry sectors and in rural areas compatible with the internal market in application of Articles 107 and 108 [TFEU]

must be interpreted as meaning that aid intended to compensate a small or medium sized enterprise (SME) active in primary agricultural production for damage caused by an adverse climatic event which can be assimilated to a natural disaster must be reduced by 50% where that SME is not insured against the statistically most frequent climatic risks in the Member State or region concerned, in a situation where the aid concerned is intended to compensate for damage caused by such a climatic event which, first, is not one of those risks and, secondly, does not constitute an insurable risk in that Member State or in the region concerned.

2.      Article 25(9) of Regulation No 702/2014

must be interpreted as meaning that aid intended to compensate an SME active in primary agricultural production for damage caused by an adverse climatic event which can be assimilated to a natural disaster must not be reduced by 50% where that SME was not able to take out insurance satisfying the conditions of that provision for the type of production in which it is engaged, having regard to the insurance available on the relevant insurance market.

[Signatures]

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*      Language of the case: French.

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i      The names of the present cases are fictitious names. They do not correspond to the real names of any of the parties to the proceedings.