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EU BIOFUELS POLICY—RAISING THE QUESTION OF WTO COMPATIBILITY

Published online by Cambridge University Press:  11 August 2011

Stephanie Switzer
Affiliation:
School of Law, University of Dundee. Email: s.switzer@dundee.ac.uk.
Joseph A McMahon
Affiliation:
School of Law and Institute for Food and Health, University College Dublin. Email: joseph.mcmahon@ucd.ie.

Extract

Governments intervene in the energy sector using a variety of measures to pursue a range of objectives, from security of supply and energy efficiency to environmental protection. Recent concerns about the impact of fossil fuels on climate change have resulted in the increasing promotion of biofuels as an alternative to oil. While worries exist with regard to the environmental impact of biofuel production in ecologically sensitive areas, it has been argued that with an effective regulatory framework to promote sustainable production, biofuels could provide a mechanism to provide energy security in an environmentally positive way.1 The interest of the European Union (EU) in the promotion of biofuels production is a relatively recent phenomenon and it is now the world's largest producer of biodiesel and the fourth largest producer of bioethanol. At its most basic level, the promotion of biofuels as an alternative to fossil fuels is part of a wider EU effort to support the use of renewable energy. The promotion of renewable energy is traceable to a number of goals, a central one of which is ensuring security of energy supply.2 Other policy goals supported by the promotion of renewable energies include reducing greenhouse gas emissions associated with climate change, decreasing dependence upon imported oil, the promotion of technological development as well as regional and rural development and employment.3

Type
Shorter Articles
Copyright
Copyright © 2011 British Institute of International and Comparative Law

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References

1 S Switzer, International Trade Law and the Environment: Designing a Legal Framework to Curtail the Import of Unsustainability Produced Biofules (2007) 7 University College Dublin Law Review.

2 See for example Commission (EC) ‘An Energy Policy for Europe’ (Communication) COM(2007) 1 final, 10 January 2007, 11.

3 See the Preamble of European Parliament and Council Directive (EC) 2009/28 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC [2009] OJ L 140/16.

4 European Parliament and Council Directive (EC) 2003/30 on the promotion of the use of Biofuels or other renewable fuels for transport [2003] OJ (2003) L123/42. Note however that as early as 1998 the European Parliament issued a resolution calling for the market share of biofuels to be increased to 2 per cent over a five year period through a range of measures such as tax exemptions and other market interventions; 8 June 1998 [1998] OJ C 210/219.

5 ibid art 3 (1) (b) (ii).

6 Commission (EC) ‘An EU Strategy for Biofuels’ (Communication) COM(2006) 34 final, 8 February 2006.

7 Commission (EC) ‘Renewable Energy Road Map: Renewable energies in the 21st century: building a more sustainable future’ (Communication) COM(2006) 848 final, 10 January 2007.

8 ibid 10.

9 Commission (EC) ‘Proposal for a Directive of the European amending Directive 98/70/EC as regards the specification of petrol, diesel and gas-oil and introducing a mechanism to monitor and the introduction of a mechanism to monitor and reduce greenhouse gas emissions from the use of road transport fuels and amending Council Directive 1999/32/EC, as regards the specification of fuel used by inland waterway vessels and repealing Directive 93/12/EEC’ COM(2007) 18 final, 31 January 2007.

10 European Parliament and Council Directive (EC) 98/70 relating to the quality of petrol and diesel fuels and amending Council Directive 93/12/EC [1998] OJ L350.

11 Commission (n 2).

12 Council of the European Union (EU) ‘Presidency Conclusions—Brussels 8/9 March 2007’ 2 May 2007; p 21.

13 ibid.

14 European Parliament and Council Directive (EC) 2009/28 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC [2009] OJ L 140/16; preamble para 16.

15 ibid preamble para 14. The Commission is tasked to monitor the supply of biofuels to the Community market in an effort to achieve an appropriate equilibrium between imported and domestic supply.

16 Commission (EC) ‘Proposal for a Directive on the promotion of the use of energy from renewable sources’ (Communication) COM(2008) 19 final, 23 January 2008.

17 European Parliament and Council Directive (EC) 2009/28 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC [2009] OJ L 140/16.

18 Annex I of the Directive contains national overall targets for each Member State's share of energy from renewable sources which, taken together will secure a share of 20% of final energy consumption of renewables by 2020.

19 Hydrogen and renewable electricity are the other forms of renewable energy likely to be used to meet the 10 per cent target.

20 Biofuels are defined within the EC Renewable Energy Directive 2009/28, art 2 as ‘liquid or gaseous fuel for transport produced from biomass.’

21 Within the context of the EC Renewable Energy Directive, the phrase bioliquids refers to liquid fuel from biomass for purposes other than transport; art 2. Given that the regime applicable to both biofuels and bioliquids is essentially identical, for the sake of convenience, the term biofuels will be used throughout this article.

22 The requirement that only ‘sustainable’ biofuels may be used to meet national targets is in line with the 2005 Biomass Action Plan which recommended that ‘only biofuels whose cultivation complies with minimum sustainability standards will count towards the targets’; Commission (EC) ‘Biomass Action Plan’ (Communication) COM(2005) 628 final, 7 December 2005. See generally EC Renewable Energy Directive 2009/28; art 17 (1).

23 EC Renewable Energy Directive 2009/28; art 17 (2). Note that in respect of ‘biofuels and bioliquids produced from waste and residues, other than agricultural, aquaculture, fisheries and forestry residues,’ the GHG saving requirement is the only sustainability criterion applicable; art 17 (1). It should also be noted that pursuant to art 21 (2) of the EC Renewable Energy Directive, ‘biofuels [used for transportation purposes listed in art 3 (4)] produced from wastes, residues, non-food cellulosic material, and ligno-cellulosic material shall be considered to be twice that made by other biofuels.’

24 ibid; in fact, the figure is more complicated than this in that ‘from 1 January 2018 that greenhouse gas emission saving shall be at least 60% for biofuels and bioliquids produced in installations in which production started on or after 1 January 2017.’

25 ibid art 19 and Annex V.

26 The fossil fuel comparator is the latest ‘available actual average emissions from the fossil part of petrol and diesel consumed in the Community as reported under Directive 98/70/EC. If no such data are available, the value used shall be 83,8 gCO2eq/MJ’; ibid, Annex V, para 19.

27 Expressed as (EFEB)/EF; ibid, Annex V, para 4.

28 ibid art 19 (3); the use of default values is permitted for raw material cultivated outside the EU, raw materials in the form of waste or residues other than agricultural and fisheries as well as raw materials produced from Community lands listed as being those where the typical greenhouse gas emissions from cultivation of such materials can be expected to be lower or equal to set default values listed in part D of Annex V of the Directive.

29 ibid art 19.

30 ibid art 17 (3).

31 ibid.

32 ibid art 17 (4).

33 ibid art 17 (5).

34 ibid art 17 (1).

35 ibid art 17 (6); ‘Agricultural raw materials cultivated in the Community and used for the production of biofuels and bioliquids taken into account for the purposes referred to in points (a), (b) and (c) of paragraph 1 shall be obtained in accordance with the requirements and standards under the provisions referred to under the heading ‘Environment’ in part A and in point 9 of Annex II to Council Regulation 73/2009 establishing common rules for direct support schemes for farmers under the common agricultural policy and establishing certain support schemes for farmers; OJ (2009) L 30/16 and in accordance with the minimum requirements for good agricultural and environmental condition defined pursuant to Article 6(1) of that Regulation.'

36 ibid art 18 (1); in this regard, Member States are required to produce a National Action Plan detailing the strategy they will adopt to fulfil the sustainability criteria for biofuels and bioliquids as well as verify compliance with the scheme. Guidance upon this is provided in Commission Decision (EC) 2009/548 establishing a template for National Renewable Energy Action Plans under Directive 2009/28/EC of the European Parliament and of the Council [2009] OJ L 182/33. A helpful summary of the content of Member States' National Renewable Energy Action Plans is contained in Commission (EU) ‘Communication from the Commission to the European Parliament and the Council – Renewable Energy: Progressing towards the 2020 target’ [2011] COM(2011) 31 final. See also Commission Decision (EU) of 12 January 2011 on certain types of information about biofuels and bioliquids to be submitted by economic operators to Member States [2011] OJ L 9/11.

37 EC Renewable Energy Directive 2009/28; art 18 (3)—compliance with a Commission recognized ‘voluntary scheme’ or multilateral/bilateral agreement will also suffice; see art 18 (4) and art 18 (7). Where such compliance is shown, Member States are not allowed to require further evidence of compliance to be provided; Art 18 (7). On voluntary schemes, see generally Commission (EU) ‘Communication from the Commission on voluntary schemes and default values in the EU biofuels and bioliquids sustainability scheme’ [2010] C 160 /1.

38 Hence, while other standards may be included in recognised sustainability schemes, these may not be used for the purposes of refusing a biofuel which meets the sustainability criteria outlined in the Renewable Energy Directive; Commission Communication ibid, p 2. Note however that economic operators are required to report on other issues such as soil, water and air protection; EC Renewable Energy Directive 2009/28; art 18 (3).

39 EC Renewable Energy Directive 2009/28; art 18 (1).

40 Cramer Commission Report ‘Testing Framework for Sustainable Biomass’ (2006) Final Report for the Project Group ‘Sustainable Production of Biomass’ available at http://www.lowcvp.org.uk/assets/reports/070427-Cramer-FinalReport_EN.pdf, accessed 6 February 2010) 26; see also EC Renewable Energy Directive 2009/28; art 18 (1).

41 ibid art 18(2). In this regard, see Commission (EU) Report on the operation of the mass balance verification method for the biofuels and bioliquids sustainability scheme in accordance with Article 18(2) of Directive 2009/28/EC (Staff Working Document) SEC(2011) 129 final and Commission (EU) ‘Communication from the Commission to the European Parliament and the Council—Renewable Energy: Progressing towards the 2020 target’ [2011] COM(2011) 31 final.

42 European Parliament and Council Directive (EC) 2009/30 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 [2009] OJ L 140/88.

43 Such criteria are merely to be reported on and are hence not part of the binding sustainability norms mandated under the Directive.

44 See generally EC Renewable Energy Directive 2009/28; art 17 (7).

45 ibid art 23.

46 R Doornbosch and R Steenblik ‘Biofuels: Is the Cure Worse than the Disease?’ (2007) OECD SG/SD/RT, 25.

47 Subject to single market disciplines such as the rules on state aid etc. Note however that the recent 2008 ‘State Aid’ scoreboard produced by the Commission details that the overwhelming majority [in the region of 98%] of aid granted by states for environmental purposes was found to be consistent with applicable state aid rules; Commission ‘State aid Scoreboard—Spring 2008 Update’ (Report) COM(2008) 304 final, 21 May 2008, p 21.

48 The Directive provides that the support offered includes: ‘… but is not restricted to, investment aid, tax exemptions or reductions, tax refunds, renewable energy obligation support schemes including those using green energy certificates, and direct price support schemes including feed-in tariffs and premium payments.’ For details on the EU framework for the taxation of energy products and electricity relevant to biofuel support, see Council Directive (EC) 2003/96 restructuring the Community framework for the taxation of energy products and electricity [2003] OJ L 283/51 [as amended]. See also Council Directive 2008/118/EC of 16 December 2008 concerning the general arrangements for excise duty and applicable to the taxation of energy products and electricity; 2008/118/EC.

49 The WTO Agreement on Agriculture, April 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1A, The Legal Texts: The Results of the Uruguay Round of Multilateral Trade Negotiations 33 (1999), 1867 UNTS 410 [hereinafter WTO Agreement on Agriculture] Agreement on Subsidies and Countervailing Measures, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1A, The Legal Texts: The Results of the Uruguay Round Of Multilateral Trade Negotiations 275 (1999), 1867 UNTS 14 [hereinafter WTO Subsidies Agreement].

50 Under the terms of the Peace Clause agricultural subsidies could not be challenged under the Subsidies Agreement but the Peace Clause has now expired, see art 13 of the Agreement on Agriculture. On this point, see Chambovey, DHow the Expiry of the Peace Clause (art 13 of the WTO Agreement on Agriculture) Might Alter Disciplines on Agricultural Subsidies in the WTO Framework’ (2002) 36 Journal of World Trade 305CrossRefGoogle Scholar, Morgan, D and Goh, GPeace in Our Time? An Analysis of Article 13 of the Agreement on Agriculture’ (2003) 37 Journal of World Trade 977Google Scholar and Steinberg, R and Josling, T, ‘When the Peace Ends: The Vulnerability of EC and US Agricultural Subsidies to WTO Legal Challenge’ (2003) 6 Journal of International Economic Law 369CrossRefGoogle Scholar.

51 Art 1(a) of the WTO Agreement on Agriculture.

52 Provided under art 6 of the WTO Agreement on Agriculture, the Blue Box exempts from the reduction commitments subsidies involving direct payments under production-limiting programmes provided that they are based on fixed areas and yields, or on 85 percent or less of the base level of production or, in the case of livestock payments, on a fixed number of head. Payments under such programmes need not be decoupled from production.

53 See for example, Blandford, DAre Disciplines Required on Domestic Support’ (2001) 2 Estey Centre Journal of International Law and Trade Policy 35Google Scholar and Rude, JUnder the Green Box: The WTO and Farm Subsidies’ (2001) 35 Journal of World Trade 1015CrossRefGoogle Scholar.

54 The expiration of the energy crop payment is confirmed by Council Regulation (EC) 73/2009 establishing common rules for direct support schemes for farmers under the common agricultural policy and establishing certain support schemes for farmers, amending Regulations (EC) No 1290/2005, (EC) No 247/2006, (EC) No 378/2007 and repealing Regulation (EC) No 1782/2003 [2009] OJ L 30/16 Art 146. For a discussion of the impact of the energy crop payment, see Commission (EC) ‘Proposal for a Council Regulation on modifications to the common agricultural policy by amending Regulations (EC) No 320/2006, (EC) No 1234/2007, (EC) No 3/2008 and (EC) No […]/2008’ (Communication) COM (2008) 306, 20 May 2009.

55 See Council Regulation (EC) 74/2009 amending Regulation (EC) No 1698/2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) [2009] OJ L 30/100.

56 It is to be regretted that in US–Upland Cotton the Panel eschewed a definition of this fundamental requirement in Annex 2 as not being necessary given its finding that there was a breach of one of subsequent paragraphs of the Annex; WTO, United States: Subsidies on Upland Cotton – Report of the Panel (18 September 2004) WT/DS267/R.

57 See Council Regulation (EC) 1698/2005 on support for rural development by the European Agricultural Fund for Rural Development [2005] OJ L 277/1 as amended by Regulation 74/2009. The measures supported Axis 1 include those under art 26, modernisation of agricultural holdings and Art 28, adding value to agricultural and forestry products. Those supported under Axis 3 include those under art 53, diversification into non-agricultural activities, art 54, support for business creation and development and art 56, basic services for the economy and rural population.

58 Serious prejudice is further defined in art 6.3 of the Subsidies Agreement.

59 Commission (EC) ‘Working Document—The Renewable Energy Progress Report Accompanying the Communication from the Commission to the Council and the European Parliament COM (2009) 192 final’ (Working Document) SEC (2009) 503, 34 April 2009, p 18.

60 ibid 21. See also Commission Communication (n 36).

61 WTO, United States: Foreign Sales Corporations—Report of the Panel (18 October 1999) WT/DS108/R; paras 8.17–8.19.

62 WTO, United States: Foreign Sales Corporations—Report of the Appellate Body (Article 21.5 EC) (29 January 2002) WT/DS108/AB/R; 91–92.

63 WTO, United States: Preliminary Determinations with respect to Certain Softwood Lumber from Canada (US – Softwood Lumber III) – Report of the Panel (27 September 2002) WT/DS236/R; paras 7.71–7.72.

64 R Howse and others ‘WTO Disciplines and Biofuels: Opportunities and Constraints in the Global Marketplace’ (2006) IPC Discussion Paper; available at; http://www.agritrade.org/Publications/DiscussionPapers/WTO_Disciplines_Biofuels.pdf (last accessed 4 February 2010) 22.

65 Commission Regulation (EC) 194/2009 imposing a provisional countervailing duty on imports of biodiesel originating in the United States of America [2009] OJ L 67/50; such action was taken under Council Regulation (EC) 2026/97 on protection against subsidized imports from countries not members of the European Community [1997] OJ L 288/1.

66 Council Regulation (EC) 598/2009 imposing a definitive countervailing duty and collecting definitively the provisional duty imposed on imports of biodiesel originating in the United States of America [2009] OJ L 179/1.

67 See for example McMahon, JReform through Litigation’ (2007) 6 Eurochoices 2, 42CrossRefGoogle Scholar.

68 On the responses of the Member States, see http://ec.europa.eu/agriculture/rurdev/countries/index_en.htm which lists the Member States and gives details of the mid-term review of their rural development policy. See also WTO Doc. G/AG/N/EEC/64 (4 February 2010). The latest notification by the EU to the WTO of agricultural support for the marketing year 2006/07 revealed total support levels of €90.7 billion. This was constituted by Amber Box support of €26.6 billion, Blue Box support of €5.7 billion and Green Box support of €56.5 billion. The figure for the Green Box represents over twice the level of expenditure in the 2004/05 notification and of this figure only €3.775 billion was provided through regional assistance programmes.

69 Complaints of subsidisation tend to lead to counterclaims, see for example WTO, Canada: Measures Affecting the Export of Civilian Aircraft–Report of the Panel (20 August 1999) WT/DS70/R [a complaint by Brazil] and WTO, Brazil: Export Financing Programme for Aircraft–Report of the Panel (20 August 1999) WT/DS46/R [a complaint by Canada].

70 WTO, Trade Policy Body ‘Trade Policy Review—Brazil’ (11 May 2009) WT/TPR/S/212, 110–111.

71 In this regard, see ICTSD ‘Malaysia Sees Possible WTO Case against EU Palm OilLimits’ (2010) 14 (18) Bridges Weekly Trade News Digest; available at http://ictsd.org/i/news/bridgesweekly/76269/, accessed 15 November 2010.

72 WTO, Korea: Taxes on Alcoholic Beverages—Report of the Appellate Body (18 January 1999) WT/DS75/ABR and WT/DS84/ABR; para 120. See also WTO, Japan: Taxes on Alcoholic Beverages II— Report of the Appellate Body Report (4 October 1996) WT/DS8/ABR, WT/DS10/ABR, WT/DS11/ABR; 21.

73 On energy taxation, see generally Council Directive (EC) 2003/96 restructuring the Community framework for the taxation of energy products and electricity [2003] OJ L 283/51 [as amended]; see also Council Directive 2008/118/EC of 16 December 2008 concerning the general arrangements for excise duty and applicable to the taxation of energy products and electricity; 2008/118/EC.

74 GATT, United States: Tobacco – Report of the Panel (4 October 1994) DS44/R; para 101.

75 WTO, Japan: Alcoholic Beverages II (n 72) 21.

76 GATT ‘Report of the Working Party on Border Tax Adjustments’ (2 December 1970) BISD 18S/97.

77 See generally Condon, B J, ‘Climate Change and Unresolved Issues in WTO Law’ (2009) 12 (4) Journal of International Economic Law 895, 906CrossRefGoogle Scholar.

78 It is to be noted that the Appellate Body opined in Japan: Alcoholic Beverages II (n 72) that the question of likeness under the first sentence of Article III:2 is to be considered on a case-by-case basis with decision makers directed to ‘keep ever in mind how narrow the range of ‘like products’ in Article III:2, first sentence is meant to be as opposed to the range of ‘like’ products contemplated in some other provisions of the GATT 1994 … ;' 20.

79 WTO, Japan—Alcohol II (n 72) 25.

80 WTO, Korea: Taxes on Alcoholic Beverages—Report of the Panel (17 February 1999) WT/DS75/R and WT/DS84/R; para 10.40.

81 ibid para 10.38.

82 WTO, Korea—Alcohol (n 72) para 114–115.

83 WTO, Japan—Alcohol II (n 72) 26.

84 WTO, Canada: Certain Measures Concerning Periodicals—Report of the Appellate Body (30 July 1997) WT/DS31/AB/R; 30–32.

85 WTO, Korea: Various Measures on Beef—Report of the Appellate Body (11 December 2001) WT/DS161/AB/R, WT/DS/169/AB/R; para 134.

86 In 2005, the World Customs Organisation (35th Session) recommended a separate tariff line for biodiesel; as cited in M Kamal Gueye, ‘Linkages Between Biofuels, Trade and Sustainable Development’ (2009) ICTSD available at http://ictsd.org/downloads/2009/06/moustapha-kamal-gueye.pdf, accessed 18 March 2010. Given the other uses of ethanol the creation of a specific tariff line for ethanol to be used as fuel is not possible.

87 The EU offers duty-free and quota-free access to the EU ethanol market to the ACP countries, under the Everything but Arms [EBA] initiative and GSP+ scheme and under various bilateral agreements.

88 WTO, Japan: Measures Affecting Consumer Photographic Film and Paper—Report of the Panel (31 March 1998) WT/DS44/R para 10.379.

89 WTO, Mexico: Taxes on Soft Drinks—Report of the Panel (7 October 2005) WT/DS308/R; para 8.117. The findings of the Panel in respect of article III were not appealed by Mexico in WTO, Mexico: Taxes on Soft Drinks-Report of the Appellate Body (6 March 2006) WT/DS308/ABR. See also WTO, Canada—Certain Measures Concerning Periodicals—Report of the Panel (30 July 1997) WT/DS114/R which asked at para 5.36; ‘[a]re there reasonable grounds to believe that sufficient incentives or disincentives existed for the measure to take effect, and was the operation of the measure essentially dependent on Government action or intervention?’

90 GATT, United States: Section 337 of the Tariff Act—Report of the Panel (7 November 1989) BISD 30S/107 para 5.11.

91 WTO, Dominican Republic: Import and Sale of Cigarettes – Report of the Appellate Body (19 May 2005) WT/DS302/AB/R para 96.

92 Erixon, EStandard as protectionist device: the EU Renewable Energy Directive’ (2009) 8 ICTSD Trade Negotiations Insights 10Google Scholar, available at http://ictsd.org/i/news/tni/65860/, accessed 6 February 2010.

93 EC Renewable Energy Directive 2009/28; Annex V.

94 WTO, Korea – Beef (n 85) paras 135–137.

95 It is to be noted that default values exist in relation to only a limited range of biofuels. In this regard, there is as yet no default value for US corn ethanol with actual values required to be used in this regard. It is, however, likely that further default values will be added by the Commission in due course, see Lendle, A and Schaus, MSustainability Criteria in the EU Renewable Energy Directive’ (2010) ICTSD Information Note No. 2;Google Scholar available at http://ictsd.org/downloads/2010/10/case_brief_rerewable_energy_dir_v5.pdf, accessed 15 November 2010, 9.

96 WTO, WTO, European Communities: Measures Affecting Asbestos and Asbestos Containing MaterialsReport of the Appellate Body (5 April 2001) WT/DS135/AB/R. This analysis is based upon a previous piece by one of the authors (Switzer, n 1).

97 GATT, Border Tax Adjustments (n 76).

98 WTO, EC–Asbestos (n 96) para 122; see also criticism by the Appellate Body regarding the Panel's failure to assess likeness on the grounds of consumer perception.

99 Panel Report WTO, European Communities: Trade Description of Sardines – Report of the Panel (23 October 2002) WT/DS231/R; para 7.127 in which it was stated in the context of art 2.4 TBT, ‘If we were to accept that a WTO Member can ‘create’ consumer expectations and thereafter find justification for the trade-restrictive measure which created those consumer expectations, we would be endorsing the permissibility of ‘self-justifying’ regulatory trade barriers.'

100 There is a rich literature in this area, see for example, Charnovitz, SThe Law of Environmental PPMS in the WTO: Debunking the Myth of Illegality’ (2002) 27 Yale Journal of International Law 59Google Scholar, Howse, R and Regan, DThe Product/Process Distinction: An Illusory Basis for Disciplining Unilateralism in Trade Policy’ (2002) 11 EJIL 249CrossRefGoogle Scholar and Roessler, FBeyond the Ostensible’ (2003) 37 Journal of World Trade 771Google Scholar.

101 See also Article XXI of the WTO General Agreement on Tariffs and Trade 1994, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1A, The Legal Texts: The Results of the Uruguay Round of Multilateral Trade Negotiations 17 (1999), 1867 UNTS 187, 33 ILM 1153 (1994) [hereinafter GATT 1994].

102 WTO, United States: Standards for Reformulated and Conventional Gasoline—Report of the Appellate Body (20 May 1996) WT/DS2/AB/R para 22.

103 In this regard, the European Commission has produced numerous reports articulating a link between climate change and harm to human, animal and plant life or health; see, for example, Commission (EC) ‘Accompanying document to the White Paper Adapting to climate change: Towards a European framework for action Human, Animal and Plant Health Impacts of Climate Change’ (Staff Working Document) SEC(2009) 416.

104 This order of examination under art XX (b) GATT 1994 was set out in WTO, United States: Standards for Reformulated and Conventional Gasoline—Report of the Panel (20 May 1996) WT/DS2/R para 6.20.

105 WTO, Korea–Beef (n 85) para 161.The Appellate Body also noted that this process ‘[I]nvolves in every case a process of weighing and balancing a series of factors which prominently include the contribution made by the compliance measure to the enforcement of the law or regulation at issue, the importance of the common interests of values protected by that law or regulation, and the accompanying impact of the law or regulation on imports or exports;’ para 164.

106 WT0, Brazil: Measures Affecting Imports of Retreaded TyresReport of the Appellate Body (3 December 2007) WT/DS332/AB/R para 145.

107 See also WTO, Korea – Beef (n 85) para 165.

108 European Commission, Directorate General for Energy and Transport ‘Results of the Public Consultation on the preparation of a report on requirements for a sustainability scheme for energy uses of biomass’ (Consultation) June 2009, available at http://ec.europa.eu/energy/renewables/consultations/doc/results_public_consultation_biomass_sustainability_scheme.pdf, accessed 6 February 2009).

109 ibid 8.

110 ibid 7.

111 Commission (EU) ‘Report on sustainability requirements for the use of solid and gaseous biomass sources in electricity, heating and cooling’ (Report) COM(2010), 8.

112 WTO, United States: Measures Affecting the Cross-Border Supply of Gambling and Betting Services—Report of the Appellate Body (20 April 2005) WT/DS285/AB/R; para 145.

113 It is to be noted that the Commission is to report by 31st December 2011 on the desirability of mandatory criteria and hence the situation at the time of writing is very much in flux, see Commission (n 110) 10. In addition, the recent Appellate Body decision in WTO, Thailand: Customs and fiscal Measures on Cigarettes from the Philippines – Report of the Appellate Body (17 June 2011) DS/371/ABR may change the interpretation afforded to the meaning of ‘necessary’ under Article XX (b) although the decision itself was confined to consideration of Article XX (d); see in particular paras 176–179.

114 In this regard, see WTO, US – Gasoline (n 102) in which ‘clean air’ was held to be an exhaustible natural resource. Furthermore, in WTO, United States: Import Prohibition of Certain Shrimp and Shrimp Products – Report of the Appellate Body (6 November 1998) WT/DS58/AB/R, the Appellate Body directed that the phrase exhaustible natural resources ‘must be read by a treaty interpreter in the light of contemporary concerns of the community of nations about the protection and conservation of the environment... the generic term of “natural resources” in art XX (g) is not “static” in its content or reference but is rather, “by definition, evolutionary.” ’

115 ibid para 141.

116 WTO, Brazil: Measures Affecting Imports of Retreaded TyresReport of the Panel (3 December 2007) WT/DS332/R para 7.262.

117 Though note WTO, US–Gasoline (n 100); para 21 in which it was noted that ‘[t]he provision of the chapeau cannot logically refer to the same standards by which a violation of a substantive rule has been determined to have occurred.’

118 WTO, US–Shrimp (n 114) and WTO, United States: Import Prohibition of Certain Shrimp and Shrimp Products – Recourse to Article 21.5 of the DSU by Malaysia – Report of the Appellate Body (21 November 2001) WT/DS58/AB/RW.

119 EC Renewable Energy Directive 2009/28, art 18 (4). In this regard, see generally comment (n 37).

120 Kojimi, M and others ‘Considering Trade Policies for Liquid Biofuels’ (2007) World Bank ESMAPGoogle Scholar, available at http://siteresources.worldbank.org/INTOGMC/Resources/Considering_trade_policies_for_liquid_biofuels.pdf xiv, accessed 7 February 2010.

121 Doornbosch, R and Steenblik, RBiofuels: Is the Cure Worse than the Disease?’ (2007) OECD SG/SD/RT, 8Google Scholar.

122 World Bank ‘Warming Up to Trade: Harnessing International Trade to Support Climate Change Objectives’ (2007) World Bank, available at http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2007/07/05/000310607_20070705152626/Rendered/PDF/402170REVISED01and1Climate01PUBLIC1.pdf 85, accessed 18 March 2010.

123 See for example, R Steenblik ‘Liberalisation of Trade in Renewable-Energy Products and Associated Goods: Charcoal, Solar Photovoltaic Systems, and Wind Pumps and Turbines’ OECD Trade and Environment Working Paper No. 2005-07 COM/ENV/TD(2005)23/FINAL, 8–9, and J A Kim ‘Issues of Dual Use and Reviewing Product Coverage of Environmental Goods’ (2007) OECD Trade and Environment Working Papers, 2007/1, OECD Publishing, COM/ENV/TD(2006)30/FINAL, 10.

124 WTO ‘Doha Ministerial Declaration’ (2001) WT/MIN(01)/DEC/1 para 31(iii).

125 WTO Doc. JOB 07/146; see also ‘Biofuels, organic food proposed as environmental goods’ http://www.wto.org/english/news_e/news07_e/envir_nov07_e.htm (8 October 2007, accessed 18 March 2010.

126 M Kojimi (n 120) 45; World Bank (n 122) 70.

127 ibid, World Bank, 87 for an argument that the existing WTO plurilateral agreement, the Government Procurement Agreement, which did not form part of the single undertaking in the Uruguay Round, could be a model for an agreement on liberalisation of products and services beneficial to climate.

128 As cited in T Rice ‘Meals per gallon: Impact of Industrial Biofuels on People and Global Hunger’ (2009) Action Aid available at http://www.actionaid.org/micrositeAssets/eu/assets/aa_biofuelsreportweb100210.pdf, accessed 19 March 2010.