Improving EU biofuels policy? greenhouse gas emissions, policy efficiency, and WTO compatibility

Journal of World Trade

Volumn 47, Issue 4, 2013, Pages 813-834

  Swinbank, Alan ^a   Daugbjerg, Carsten ^b  

^a UNIVERSITY OF READING   (United Kingdom)

^b AUSTRALIAN NATIONAL UNIVERSITY   (Australia)

Author keywords

[No Author keywords available]

Indexed keywords

BIOFUEL; CARBON EMISSION; EUROPEAN UNION; GREENHOUSE GAS; RENEWABLE RESOURCE; TRADE POLICY; WORLD TRADE ORGANIZATION;

EID: 84880771555     PISSN: 10116702     EISSN: None     Source Type: Journal    
DOI: 10.54648/trad2013027     Document Type: Article

References (60)

1. In EU legislation, biofuels are defined as 'liquid or gaseous fuel for transport produced from biomass'; and bioliquids as 'liquid fuel for energy purposes other than for transport, including electricity and heating and cooling, produced from biomass' (Art. 2 of the RED Directive). Other biomass for renewable energy (e.g., wood chips) is not currently subject to sustainability criteria.
2. Official Journal of the European Union, L140, 5 Jun. 2009: 16-62.
3. Despite the apparent simplicity of this formulation, special rules apply to aviation, electric propelled vehicles, and biofuels 'produced from wastes, residues, non-food cellulosic material, and ligno-cellulosic material.'
4. Alan Swinbank, EU Support for Biofuels and Bioenergy, Environmental Sustainability Criteria, and Trade Policy. ICTSD Programme on Agricultural Trade and Sustainable Development, Issue Paper No. 17 (Geneva: International Centre forTrade and Sustainable Development, 2009), 4-5.
5. Introduced by 'Directive 2009/30/EC of the European Parliament and of the Council of 23 Apr. 2009 amending Directive 98/70/EC as regards the specification of petrol, diesel and gas-oil and introducing a mechanism to monitor and reduce greenhouse gas emissions and amending Council Directive 1999/32/EC as regards the specification of fuel used by inland waterway vessels and repealing Directive 93/12/EEC,' Official Journal of the European Union, L140, 5 Jun. 2009: 88-113.
6. European Commission (2012), Proposal for a Directive of the European Parliament and of the Council amending Directive 98/70/EC relating to the quality of petrol and diesel fuels and amending Directive 2009/28/EC on the promotion of the use of energy from renewable sources, COM(2012)595 (Brussels: European Commission, 2012).
7. Furthermore, the verification of compliance with the sustainability criteria set out below has to a large extent been privatized, in that the Commission is authorized to recognize voluntary national or international accreditation schemes which Member States are then obliged to accept (RED, Article 18). At the time of writing, the European Commission had recognized thirteen such schemes: http://ec.europa.eu/energy/renewables/biofuels/sustainability_schemes_en.htm (accessed 6 Dec. 2012).
8. World Trade Organization, European Union and a Member State-Certain Measures Concerning the Importation of Biodiesels. Request for Consultations by Argentina, WT/DS443/1; G/TRIMS/D/30; G/L/994 (Geneva:WTO, 2012), 1-2.
9. Alan Swinbank, Richard Tranter & Philip Jones, Mandates, buyouts and fuel-tax rebates: Some economic aspects of biofuel policies using the UK as an example, 39 Energy Policy 1249 (2011).
10. Department for Transport, Consultation on proposals to implement Article 7a to 7e of the EU Fuel Quality Directive (FQD) (Directive 98/70/EC as amended by 2009/30/EC) requiring suppliers to reduce the lifecycle greenhouse gas intensity of transport fuels and introducing sustainability criteria for biofuels (London: DfT, 2011a), 43-44.
11. The land-use criteria do not apply to biofuels derived from household and industrial wastes and residues.
12. Emily Barrett Lydgate, Biofuels, Sustainability, and Trade-Related Regulatory Chill,15 J. Intl. Econ. L., 157, 160, 163-164 (2012)
13. Alan Swinbank, EU Support for Biofuels and Bioenergy, Environmental Sustainability Criteria, and Trade Policy. ICTSD Programme on Agricultural Trade and Sustainable Development, Issue Paper No. 17 (Geneva: International Centre forTrade and Sustainable Development, 2009), 4-5.
14. Department for Transport, RTFO Guidance consultation-summary of responses and Government response 28 (London: DfT, 2012, although the document bears the date February 2011).
15. Department for Transport, RTFO Guidance consultation-summary of responses and Government response 28 (London: DfT, 2012, although the document bears the date February 2011).
16. Three gases are considered: carbon dioxide (CO2, weighted at 1), nitrous oxide (N2O, equivalent to 296 units of CO2), and methane (CH4, equivalent to 23 units of CO2).
17. Sacha Alberici & Carlo Hamelinck, Annotated Example of a GHG Calculation using the EU Renewable Energy Directive Methodology, Project number: PEGENL083540 (London: Ecofys UK Ltd. 2010).
18. Sacha Alberici & Carlo Hamelinck, Annotated Example of a GHG Calculation using the EU Renewable Energy Directive Methodology, Project number: PEGENL083540 (London: Ecofys UK Ltd. 2010).
19. European Commission, Report from the Commission on indirect land-use change related to biofuels and bioliquids, COM(2010)811 (Brussels: European Commission, 2010).
20. Department for Transport, RTFO Guidance consultation-summary of responses and Government response 28 (London: DfT, 2012, although the document bears the date February 2011).
21. Alan Swinbank, EU Support for Biofuels and Bioenergy, Environmental Sustainability Criteria, and Trade Policy. ICTSD Programme on Agricultural Trade and Sustainable Development, Issue Paper No. 17 (Geneva: International Centre forTrade and Sustainable Development, 2009), 4-5.
22. Department for Transport, RTFO Guidance consultation-summary of responses and Government response 28 (London: DfT, 2012, although the document bears the date February 2011).
23. Department for Transport, RTFO Guidance consultation-summary of responses and Government response 28 (London: DfT, 2012, although the document bears the date February 2011).
24. The RED and the FQD have a similar, but not identical coverage. For example, the FQD covers fuel for non-road mobile machinery and craft on inland waterways, whereas the RED does not. The FQD directive raises the possibility of an increase of this 6% reduction to 10%. First, an additional 2% point through more savings, or carbon capture. Second, a nominal increase of 2% points 'through the use of credits purchased through the Clean Development Mechanism of the Kyoto Protocol' to offset suppliers' emissions (Art. 7a, FQD).
25. Department for Transport, RTFO Guidance consultation-summary of responses and Government response 28 (London: DfT, 2012, although the document bears the date February 2011).
26. Ian Skinner & Bettina Kretschmer, The Interactions between European Policy Drivers for Increasing the Use of Biofuels inTransport 1 (Inst. European Envtl. Policy 2010).
27. Details from the authors on request.
28. Sacha Alberici & Carlo Hamelinck, Annotated Example of a GHG Calculation using the EU Renewable Energy Directive Methodology, Project number: PEGENL083540 (London: Ecofys UK Ltd. 2010).
29. Department for Transport, RTFO Guidance consultation-summary of responses and Government response 28 (London: DfT, 2012, although the document bears the date February 2011).
30. Ian Skinner & Bettina Kretschmer, The Interactions between European Policy Drivers for Increasing the Use of Biofuels inTransport 1 (Inst. European Envtl. Policy 2010).
31. Geoff Cooper, The Ethanol Shuffle (Washington, DC: Renewable Fuels Association, 2011) at http://www.ethanolrfa.org/exchange/entry/the-ethanol-shuffle/?utm_mediumhemail&utm_campaign eRFARIssueIBriefBTheTEthanolEShuffle&utm_contentSRFARIssueIBriefBTheTEthanolEShuffleS CID_cb13a230dc0347f2b8242732b5ea5cf9&utm_sourceCEmailEmarketingmsoftware&utm_termsblog bpost (accessed 20 Apr. 2012).
32. Harry de Gorter & David R. Just, The Social Costs and Benefits of Biofuels: The Intersection of Environmental, Energy and Agricultural Policy, 32 Applied Econ. Persp. & Policy 4, 22 (2010).
33. Harry de Gorter & David R. Just, The Social Costs and Benefits of Biofuels: The Intersection of Environmental, Energy and Agricultural Policy, 32 Applied Econ. Persp. & Policy 4, 22 (2010).
34. Department for Transport, RTFO Guidance consultation-summary of responses and Government response 28 (London: DfT, 2012, although the document bears the date February 2011).
35. Although the proposals in the European Commission's 2012 draft seek to differentiate between biofuels produced from food crops, and those from other sources, and special (but revised) rules would continue to apply for supplies derived from waste and ligno-cellulosic materials.
36. Department for Transport, Fuel Quality Directive, Impact Assessment, IA No: DFT00048 (London: DfT, 2011b), 24.
37. Robert Ackrill & Adrian Kay, EU Biofuels Sustainability Standards and Certification Systems-How to Seek WTO-Compatibility, 62 J. Agric. Econ. 551, 562 (2011).
38. Emily Barrett Lydgate, Biofuels, Sustainability, and Trade-Related Regulatory Chill,15 J. Intl. Econ. L., 157, 160, 163-164 (2012)
39. Fredrik Erixon, The Rising Trend of Green Protectionism: Biofuels and the European Union, ECIPE Occasional Paper No. 2/2012 (Brussels: European Centre for International Political Economy, 2012), 20-30.
40. The WTO Agreements can be accessed via the WTO's website at http://www.wto.org/english/docs_e/legal_e/legal_e.htm.
41. It is interesting to note that when the EU notified the WTO's TBT Committee of its proposals for the RED in July 2008, it did not include the sustainability criteria as a technical regulation (World Trade Organization, Notification, Committee on Technical Barriers to Trade, G/TBT/N/EEC/200 (Geneva: WTO, 2008). The technical regulations it did notify were to do with labeling, and fuel specification. Australia then raised questions about sustainability criteria, and in response, in April 2009, the EU's official TBT-Enquiry Point responded curtly: 'The points raised by Australia do not refer to the provisions of the Community act which fall within the scope of the TBT Agreement.' http://ec.europa.eu/enterprise/tbt/index.cfm?fuseactionhSearch.viewDetail&Country_IDCEEC&num E200&dspLang2EN&nextpageE1&basdatedeb1&basdatefin&&baspays&EEC&baspays2E&basnotifnum&200 &basnotifnum2&&bastypepays&ANY&baskeywordsA&fromformmviewBasic&FromWhatNew vWhatNew.viewOld&whatNumW72&whatYear72010 (accessed 27 Apr. 2012).
42. See the WTO Secretariat's Summary of Key Findings at http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds381_e.htm#bkmk381abr (accessed 14 Jun. 2012).
43. GATT Art. I, on most-favoured-nation treatment, might also be cited. There is, however, a body of opinion that suggests that GATT Arts I and III would not apply, but instead that Art. XI (on Quantitative Restrictions) would. We do not pursue that discussion here, but see, for example, the comments of Andrew Mitchell & Christopher Tran, The Consistency of the European Union Renewable Energy Directive with World Trade Organization Agreements: The Case of Biofuels, 1/2010 Renewable Energy L. & Policy Rev. 33, 39-40 (2010).
44. World Trade Organization, European Communities-Measures Affecting Asbestos and Asbestos-Containing Products, Report of the Appellate Body, WT/DS135/AB/R (Geneva: WTO, 2001), para. 88.
45. GATT Art. I, on most-favoured-nation treatment, might also be cited. There is, however, a body of opinion that suggests that GATT Arts I and III would not apply, but instead that Art. XI (on Quantitative Restrictions) would. We do not pursue that discussion here, but see, for example, the comments of Andrew Mitchell & Christopher Tran, The Consistency of the European Union Renewable Energy Directive with World Trade Organization Agreements: The Case of Biofuels, 1/2010 Renewable Energy L. & Policy Rev. 33, 39-40 (2010).
46. GATT Art. I, on most-favoured-nation treatment, might also be cited. There is, however, a body of opinion that suggests that GATT Arts I and III would not apply, but instead that Art. XI (on Quantitative Restrictions) would. We do not pursue that discussion here, but see, for example, the comments of Andrew Mitchell & Christopher Tran, The Consistency of the European Union Renewable Energy Directive with World Trade Organization Agreements: The Case of Biofuels, 1/2010 Renewable Energy L. & Policy Rev. 33, 39-40 (2010).
47. Emily Barrett Lydgate, Biofuels, Sustainability, and Trade-Related Regulatory Chill,15 J. Intl. Econ. L., 157, 160, 163-164 (2012)
48. Commission of the European Communities, Proposal for a Directive of the European Parliament and of the Council on the promotion of the use of energy from renewable sources, COM(2008)19 (Brussels: CEC, 2008).
49. GATT Art. I, on most-favoured-nation treatment, might also be cited. There is, however, a body of opinion that suggests that GATT Arts I and III would not apply, but instead that Art. XI (on Quantitative Restrictions) would. We do not pursue that discussion here, but see, for example, the comments of Andrew Mitchell & Christopher Tran, The Consistency of the European Union Renewable Energy Directive with World Trade Organization Agreements: The Case of Biofuels, 1/2010 Renewable Energy L. & Policy Rev. 33, 39-40 (2010).
50. A further complication is that the EU has adopted a mass balance system that allows 'consignments of raw materials or biofuel with different sustainability criteria to be mixed,' but which insists on an accounting exercise to ensure that the withdrawal of 'sustainable' materials exactly matches the volumes of sustainable material added to the mix (RED Art. 18).
51. GATT Art. I, on most-favoured-nation treatment, might also be cited. There is, however, a body of opinion that suggests that GATT Arts I and III would not apply, but instead that Art. XI (on Quantitative Restrictions) would. We do not pursue that discussion here, but see, for example, the comments of Andrew Mitchell & Christopher Tran, The Consistency of the European Union Renewable Energy Directive with World Trade Organization Agreements: The Case of Biofuels, 1/2010 Renewable Energy L. & Policy Rev. 33, 39-40 (2010).
52. GATT Art. I, on most-favoured-nation treatment, might also be cited. There is, however, a body of opinion that suggests that GATT Arts I and III would not apply, but instead that Art. XI (on Quantitative Restrictions) would. We do not pursue that discussion here, but see, for example, the comments of Andrew Mitchell & Christopher Tran, The Consistency of the European Union Renewable Energy Directive with World Trade Organization Agreements: The Case of Biofuels, 1/2010 Renewable Energy L. & Policy Rev. 33, 39-40 (2010).
53. Wolfgang Weiß (2011), Biofuels and WTO Law, European Y.B. Intl. Econ. L. 169, 188 (Christoph Herrmann & Jörg PhilippTerhechte eds., Springer 2011).
54. This was not always the case. Steve Charnovitz, The WTO's Environmental Progress,' 10 J. Intl. Econ. L. 685-706 (2007) has chronicled how the Appellate Body has 'cast aside some of the GATT and earlyWTO panel holdings that threatened to render the environmental exceptions unusable'; and 'sent a signal to the public that the era of runaway panels on environmental matters was over.'
55. For example: Stephanie Switzer & Joseph A. McMahon, EU biofuels policy-raising the question of WTO compatibility, 60 Intl. & Comp. L.Q. 713, 734 (2011).
56. Robert Ackrill & Adrian Kay, EU Biofuels Sustainability Standards and Certification Systems-How to Seek WTO-Compatibility, 62 J. Agric. Econ. 551, 562 (2011).
57. Greenpeace, Greenpeace Responses to the Public Consultation 'Biofuel Issues in the New Legislation on the Promotion of Renewable Energy (2007) 2, http://ec.europa.eu/energy/renewables/consultations/2007_06_18_biofuels_en.htm (accessed 18 Jun. 2012).
58. UK Government, The UK Government Response to the European Commission Consultation Biofuel Issues in the New Legislation on the Promotion of Renewable Energy (2007) 4, http://ec.europa.eu/energy/renewables/consultations/2007_06_18_biofuels_en.htm (accessed 18 Jun. 2012).
59. UK Government, The UK Government Response to the European Commission Consultation Biofuel Issues in the New Legislation on the Promotion of Renewable Energy (2007) 4, http://ec.europa.eu/energy/renewables/consultations/2007_06_18_biofuels_en.htm (accessed 18 Jun. 2012).
60. Sacha Alberici & Carlo Hamelinck, Annotated Example of a GHG Calculation using the EU Renewable Energy Directive Methodology, Project number: PEGENL083540 (London: Ecofys UK Ltd. 2010).