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GREEN PROTECTIONISM IN THE EUROPEAN UNION

Rue Belliard 4-6, 1040 Brussels, Belgium. info@ecipe.org, www.ecipe.org. GREEN PROTECTIONISM IN THE EUROPEAN UNION. Presentation, ECIPE-ICTSD, Geneva, Februry 23, 2010. Fredrik Erixon,. Rue Belliard 4-6, 1040 Brussels, Belgium. info@ecipe.org, www.ecipe.org.

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GREEN PROTECTIONISM IN THE EUROPEAN UNION

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  1. Rue Belliard 4-6, 1040 Brussels, Belgium. info@ecipe.org, www.ecipe.org GREEN PROTECTIONISM IN THE EUROPEAN UNION Presentation, ECIPE-ICTSD, Geneva, Februry 23, 2010 Fredrik Erixon,

  2. Rue Belliard 4-6, 1040 Brussels, Belgium. info@ecipe.org, www.ecipe.org Understanding Europe’s biofuels policy • Contextualizing Europe’s biofuels policy • Part of the Common Agricultural Policy • Part of climate change policy • Conflicting ambitions: industrial policy vs. substituion of fossile fuels

  3. Rue Belliard 4-6, 1040 Brussels, Belgium. info@ecipe.org, www.ecipe.org The CAP context • Four decades of CAP-reform ambitions and increasing reforms • Biofuels could ”…create new opportunities for sustainable rural development in a more market-oriented common agricultural policy.” • The political economy of post-2012 CAP/Budget Framework • Old countries have interest to turn CAP into energy policy • Yet subsidies cannot finance all expansion; increasing focus on standards to support local producers

  4. Rue Belliard 4-6, 1040 Brussels, Belgium. info@ecipe.org, www.ecipe.org The structure of CAP

  5. Rue Belliard 4-6, 1040 Brussels, Belgium. info@ecipe.org, www.ecipe.org CAP expenditures (mn EUR)

  6. Rue Belliard 4-6, 1040 Brussels, Belgium. info@ecipe.org, www.ecipe.org EU biofuels production (’000t) has grown extremly rapidly

  7. Rue Belliard 4-6, 1040 Brussels, Belgium. info@ecipe.org, www.ecipe.org Little trade: Production of biodiesel and import of veg oil (index: 2000=100)

  8. Rue Belliard 4-6, 1040 Brussels, Belgium. info@ecipe.org, www.ecipe.org Effecte rate of assistance/protection (2007)

  9. Rue Belliard 4-6, 1040 Brussels, Belgium. info@ecipe.org, www.ecipe.org EU support to biofuels

  10. Rue Belliard 4-6, 1040 Brussels, Belgium. info@ecipe.org, www.ecipe.org Tariffs, subsidies – and now standards • The Renewable Energy Directive • Increase the use of renewable energy sources to 20 percent by 2020 • Share of biofuels in transport (equal for all countries) 10 percent by 2020 • Introduction of sustainability criteria

  11. Rue Belliard 4-6, 1040 Brussels, Belgium. info@ecipe.org, www.ecipe.org Sustainability criteria • Emissions-related criteria: greenhouse gas emission savings at least 35%; 50% from 2017; 60% for new production after 2016. • Land-related sustainability criteria: biofuels must not have been made from raw materials obtained from 1)land with high biodiversity value; 2) land with high carbon stock; 3) peatland

  12. Rue Belliard 4-6, 1040 Brussels, Belgium. info@ecipe.org, www.ecipe.org Is this directive WTO consistent? • What is important to consider? • The process, the directive, policy – ”a revealing structure” • PPMs: non-product related process and production methods • GATT articles: I, III and XI • TBT agreement

  13. Rue Belliard 4-6, 1040 Brussels, Belgium. info@ecipe.org, www.ecipe.org Inconsistencies with GATT • GATT Article I:1 – ”like products” • Emission-related criteria might be considered as different product (physical characteristics), but not land-related criteria: it is inconsistent • GATT Article III:4 – ”no-less favourable treatment” • Applicability debatable • Two unadopted panels (US-Tuna) on coverage of this article for PPMs

  14. Rue Belliard 4-6, 1040 Brussels, Belgium. info@ecipe.org, www.ecipe.org Inconsistencies with GATT • GATT Article XI:1 – ”no prohibition or restriction” • ”De facto restriction” (Brazil-Tyres) • Both criteria flaunt Article XI • GATT Article XX • (b) ”necessary”: might be OK • (g) ”relating to”: might be OK • Chapeau requirements the difficult part: ”design, architecture and revealing structure”

  15. Rue Belliard 4-6, 1040 Brussels, Belgium. info@ecipe.org, www.ecipe.org Inconsistencies with GATT • TBT agreement: debatable if it applies to PPMs? • Annex I points to PPM, but in a special way • Emission-related sustainability criteria will however be covered • Stronger motivation needed for conditional departure than under Article XX

  16. Rue Belliard 4-6, 1040 Brussels, Belgium. info@ecipe.org, www.ecipe.org Conclusion (1) • Unlikely that the Renewable Energy Directove would be found consistent with WTO rules if it is used to block effective access

  17. Rue Belliard 4-6, 1040 Brussels, Belgium. info@ecipe.org, www.ecipe.org Conclusion (2) • You want the honest answer? • Is it a coincident that the EU designs a standard that will give EU rapeseed oil producers the protection they need to have to expand (and subsidies and tariffs cannot give) and utilise invested capital by blocking possible expansion for palm oil, they main competitor to rapeseed oil? • No

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