Brussels, 10/09/2013 (Agence Europe) - The European Centre for International Political Economy (ECIPE) has sounded the alarm over the inconsistency with WTO rules of the proposed reform of biofuel policy which is based on taking indirect land use change (ILUC) into account.
An ECIPE working document signed by the Centre's director, Swedish economist Friedrik Erixon, and published on 5 September (ECIPE occasional paper No 03/2013), seeks to show that reform of the legislative system on the production and use of biofuels in the EU to take ILUC into account, and the strengthening of sustainability criteria for green fuels, will only increase its inconsistency with WTO regulations.
The EU's future legislative framework on biofuels, which seeks to factor in ILUC, is already under challenge at the WTO after Argentina filed two complaints against EU restrictions on imports of biodiesel arising from the 2009 renewable energy directive (RED) and would not, many scientists and lawyers have pointed out, stand the test in WTO proceedings.
According to the document, the legislative proposal put forward in October 2012 by the Commission is currently under the scrutiny of the Council and European Parliament with a view to amending the renewables and fuel quality directives in order to take ILUC into account and cap biofuels from agri-food crops. It will, however, exacerbate the inconsistency of the renewables directive in relation to the EU's obligations at the WTO.
First and foremost, it accelerates discrimination based on RED sustainability criteria - higher thresholds on greenhouse gas savings will be introduced sooner than decided in RED.
Secondly, the introduction of a requirement to report a Commission-decided estimate on ILUC emissions changes the legal character of RED. “The EU can no longer discriminate on the basis of an emissions savings estimate based on RED and RED methodology. Its own policy will show that some feedstock that is not discriminated against will lead to lower greenhouse gas savings than those feedstock discriminated against if also ILUC emissions are counted. Consequently, the notion that discrimination of 'like' products - a crucial concept in WTO rules - can be defended as legitimate because it promotes environmental ambitious collapses”, the author stresses.
Thirdly, the cap on the first generation biofuels that can be used by member states in achieving the national targets for renewable sources of transport fuels introduces a new element of discrimination - discrimination between exactly the same type of biofuels, not just 'like' biofuels.
Finally, the introduction of ILUC factors in EU biofuels policy will also lead to direct friction with WTO rules, especially if EU policy follows the amendment by the rapporteur in the European Parliament and conditions market access on the basis of ILUC emissions. (EH/transl.jl)