The European directive on renewable energy (RED II) does not infringe international trade rules, according to a report by the World Trade Organization (WTO) published on Tuesday 5 March. Malaysia challenged this legislation in 2021 (see EUROPE 12729/17) because it excludes palm oil-based biofuel from the renewable energies in the EU’s 2030 targets, and therefore restricts its use. Malaysia is the world’s second largest palm oil producer, after Indonesia.
The panel, opened at the request of Kuala Lumpur in May 2021, concluded that the European RED II directive was compatible with the WTO Agreement on Technical Barriers to Trade. Specifically, the obligation “to ensure that technical regulations are not more trade restrictive than necessary to fulfil a legitimate objective“ is respected.
However, certain aspects of the delegated act included in this legislation do not comply with the rules. The delegated act specifies the criteria for determining which biofuels are likely to increase greenhouse gas emissions as a result of land use change.
“The matters identified by the panel are, to a very large extent, required anyway to be adjusted under EU law”, said the European Commission.
Malaysia can appeal this decision, but the WTO’s Appellate Body has been blocked for several years and is not taking any decisions. If it does not appeal within two months, the report will be binding on both parties.
See the report: https://aeur.eu/f/b5s (Original version in French by Léa Marchal)