by Malorie SCHAUS Paper co-written with Andreas LENDLE

Transcription

1 by Malorie SCHAUS Paper co-written with Andreas LENDLE 1

2 Outline I - The EU Sustainability Criteria for Biofuels 1 - GHG emission saving criteria 2 - Land-use criteria II - Their Consistency with GATT Disciplines 1 - GATT Article III - National Treatment Three cumulative conditions Scope of application: products and PPMs? «Likeness» between imported and domestic biofuels? «No less favorable treatment» of the group of imported biofuels? 2 - GATT Article XX - General Exceptions Clause Paragraph b): protection of human, animal or plant life or health Paragraph g): conservation of exhaustible natural resources & Chapeau of GATT Article XX 2

3 1 Greenhouse Gas emission saving criteria 2 Land-use criteria 3

4 Sustainability Criteria for Biofuels (Art. 17) Two cumulative sustainability criteria GHG emission saving criteria Land-use criteria Sustainable biofuels Count for the fulfilment of mandatory targets Are eligible for financial support E.g. tax reductions and waivers; subsidies 4

5 1 - GHG emission saving criteria Until 2016: 35% 2017: 50% 2018: 60% Calculation method Comparison of emissions of biofuels with emissions of fossil fuels Total emissions = sum of four main components Extraction and cultivation of raw materials; Land-use change; Processing; Transport and distribution. 5

6 1 - GHG emission saving criteria (foll.) Default values For some biofuels, for some emission components Choice between three options: Default value; Actual value; Mixture of default and actual values. Advantages: Reduced administrative burden; Biofuel s eligibility, even if actual value is too low for eligibility. 6

7 2 - Land-use criteria Biofuels NOT made from raw material from: Land with high biodiversity value Primary forest and other wooded land Protected areas Highly biodiverse grassland Criteria and geographic ranges shall be determined by the Commission Land with high carbon stock E.g. wetlands Peatlands 7

8 1 - GATT Article III National Treatment 2 - GATT Article XX General Exceptions Clause 8

9 1 - GATT Article III National Treatment Three cumulative conditions: Scope of application: products and PPMs? «Likeness» between imported and domestic biofuels? «No less favorable treatment» of the group of imported biofuels? 9

10 Scope of application The sustainability criteria (SC) can be considered as how-produced PPMs BECAUSE they are related to the production process of biofuels of each individual producer GATT/WTO case law (US-Alcoholic Beverages and US-Gasoline) shares similarities with the SC applies GATT Article III to PPMs 10

11 «Likeness» Between sustainable domestic biofuels and unsustainable imported biofuels Four criteria Biofuels properties Same physical characteristics unless based on different raw materials or unprocessed biofuels BUT all based on biomass (Superfund) Their end-uses Use as fuel for transport Consumer s tastes and habits Most likely indifference High burden of proof to reverse «likeness» based on first criterion Tariff classification Biofuels can enter under different tariff classifications No strictly defined HS code for either bioethanol or biodiesel 11

12 «No Less Favorable Treatment» De jure discrimination De facto origin-based discrimination (EC-Asbestos) Nationality link by comparing treatment of the group of imported biofuels to the group of «like» domestic biofuels 12

13 «No Less Favorable Treatment» (foll.) GHG emission saving criteria Calculation method: rational and at least in principle based on international standards (Preamble (85)) Emissions from transport and distribution Default values are relatively low for most biofuels BUT regarding soybean biodiesel (Brazil or US): minimum emission savings not fulfilled when using default values because of transport emissions => De facto origin-based discrimination Default values For EU-produced BUT NOT for US-produced corn ethanol =>De jure discrimination HOWEVER adaptation or addition to the list of default values possible (Art. 19(7)) GHG emission savings thresholds Do not seem to be fixed to specifically give advantage to EU-produced biofuels E.g. 50% threshold: rapeseed oil not sustainable BUT palm oil biodiesel sustainable 13

14 «No Less Favorable Treatment» (foll.) Land-use criteria EU: if expansion of the arable area: permanent grassland or agricultural land > Sustainability depends on criteria and geographic ranges determined by the Commission Brazil: expansion of sugar cane production > low pressure on protected areas expansion of soybean production > rainforest HOWEVER, areas with pristine native vegetation protected AND sugar cultivation/harvesting crops in protected areas is prohibited > Sustainability Indonesia: 27% palm oil concessions on peat-forest Similar figure expected for Malaysia > Unsustainability South Africa: highly biodiverse grassland transformed for forestry and agriculture > Sustainability depends on criteria and geog. ranges determined by the Commission => De facto origin-based discrimination regarding biofuels production in Indonesia, Malaysia and perhaps South Africa 14

15 2 GATT Article XX General Exceptions Clause GATT Article XX, paragraph b): «necessary to protect human, animal or plant life or health»; GATT Article XX, paragraph g): «relating to the conservation of exhaustible natural resources»; & Chapeau of GATT Article XX. 15

16 GATT Article XX, paragraph b) «necessary to protect human, animal or plant life or health» 1) Directive s objectives (1) GHG emission saving criteria and land-use criteria: Reduction of GHG emissions => mitigation of climate change (2) Land-use criteria: Preservation of specific types of land => environmental objective => avoid potential serious damage to humanity and natural ecosystems 16

17 GATT Article XX, paragraph b) (foll.) 2) Necessity of the sustainability criteria to achieve the Directive s objectives Discretionary power of WTO Members to determine the level of protection of health (EC- Asbestos) «a weighing and balancing process» (Korea-Beef) Relative importance of the interests or values; Contribution of the measure to the realization of the ends pursued; Restrictive impact of the measure on International Commerce Less restrictive alternatives? 17

18 Contribution of the measure to the realization of the ends pursued GHG emission saving criteria Biofuels = one tool to reduce GHG emissions BUT objective only partly achieved without GHG emission saving criteria BECAUSE some biofuels do not guarantee emission savings Land-use criteria Contribute to the reduction of GHG emissions e.g. wetlands, peatlands with high carbon stock capacity; Contribute to the preservation of land. 18

19 GATT Article XX, paragraph b) (foll.) 3) Extraterritorial application of the Directive Required nexus between the object of protection and the territory/jurisdiction of the regulating country (US-Shrimp) Sufficient nexus between endangered turtles and the US BECAUSE the turtles occur in waters over which the US exercises jurisdiction AND, more importantly, they are globally endangered. Directive GHG emission saving criteria and some land-use criteria Protection of the atmosphere against GHG emissions: Part of the atmosphere is under EU Member States jurisdiction; GHG emissions are a global danger to the atmosphere. Land-use criteria Preservation of some types of land Some natural resources and species covered by the Directive occur in territories over which EU Member States exercise jurisdiction; These lands are of global concern. Convention concerning the protection of the world cultural and natural heritage (1972): 187 parties; Convention on Biological Diversity (1992): 157 parties; Ramsar Convention (wetlands) (1971): 160 parties. 19

20 GATT Article XX, paragraph g) «relating to the conservation of exhaustible natural resources» 1) Exhaustible natural resources GHG emission saving criteria and some land-use criteria The protection of the atmosphere > limited absorption capacity of GHG (US-Gasoline) Land-use criteria The preservation of natural ecosystems > forests are exhaustible (US- Gasoline) 2) Related to the conservation of exhaustible natural resources «close and real relationship between the measure and the policy objective» (US-Shrimp) 3) Extraterritorial application of the Directive: cf. supra 4) The SC are made effective in conjunction with restrictions on domestic production or consumption 20

21 Chapeau of GATT Article XX The SC should not be applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail. Strong arguments support the absence of arbitrary and unjustifiable discrimination HOWEVER the absence of a default value for US corn ethanol is unjustifiable BUT the transport emissions in the calculation of emission savings is justifiable 21

22 Chapeau of GATT Article XX (foll.) Further arguments, 1) The SC are how-produced standards 2) The Directive imposes limited negative obligations 3) The Directive is flexible regarding its SC: Exceptions under the land-use criteria Bilateral and multilateral agreements (Article 18(4)) Voluntary national or international schemes setting standards (Article 18(4)) 4) Most SC are in line with the Roundtable on Sustainable Biofuels Principles and Criteria for Sustainable Biofuel Production 22

23 GATT Article III De jure discrimination: --the absence of a default value for US corn ethanol De facto discrimination: --transport emissions for soybean biodiesel --land-use criteria GATT Article XX Justification EXCEPT for the absence of a default value for US corn ethanol 23