EU Biofuels Sustainability Standards and Certification Systems - How to Seek WTO-Compatibility

Abstract

Governments, increasingly, are encouraging the production and consumption of biofuels, as a partial substitute for fossil-fuel based transport fuels. One reason for this is to contribute to the fight against climate change. Sustainability criteria have been introduced recently by some countries to help ensure biofuels have lower greenhouse gas emissions than fossil fuels. Concerns have been expressed from various quarters that such criteria could represent World Trade Organisation (WTO)-incompatible barriers to trade. We, first, question recent contributions to the (mainly legal) academic literature which have sought to find ways of allowing biofuels to be treated differently in trade policy terms, based on whether or not they have been derived from feedstocks produced sustainably. We then draw on the Technical Barriers to Trade Agreement (TBTA) to offer guidance as to how to establish WTO-compatible sustainability criteria. There is little direct case law to draw on at the design stage, but we argue that if TBTA guidance is followed, a long-term absence of case law could be taken as an indication that the sustainability criteria established are indeed WTO-compatible.