The European Centre for International Political Economy (ECIPE) has released a report criticizing the European Union's biofuels policy, Green Protectionism in the European Union: How Europe's Biofuels Policy and the Renewable Energy Directive Violate WTO Commitments.

According to the report, which reviews the history and programs behind the EU's biofuels policy, substantial subsidies, import tariffs and standards are used to favour domestically produced biofuels, in "a classic example of ‘green protectionism' - protectionism that is not motivated for the benefit of the environment, but which uses environmental concerns to pursue non-environmental objectives."

The study gives particular attention to The Renewable Energy Directive (RED), which sets a binding target for 20% of the EU's energy use to come from renewable sources by 2020. Of this, biofuels are to make up a 10% share of transport-related energy in all E.U countries. In order to contribute towards these targets, biofuels producers are expected to meet complex production criteria, including a gradually increasing minimum level of saved greenhouse gas emissions, and to avoid converting biodiverse or carbon-rich soils for growing feedstocks (inappropriate land-use change).

ECIPE object that foreign exporters may not be able to prove compliance, effectively cutting them off from the EU market, especially where eligibility for subsidies may be tied to meeting the RED criteria. They also note that the EU fails to provide guidance on how it could prevent the manipulation of ambiguities in the calculation of carbon reductions, leaving it open to accusations of bad faith. Europe's lack of negotiation with other countries is identified as the key problem with its approach.

The report argues that a careful reading of the General Agreement on Tariffs and Trade (GATT) and the Agreement on Technical Barriers to Trade (TBT) show that the EU's biofuels policy "clearly violates WTO principles and rules", and is unlikely to qualify under any of the GATT's criteria for exceptional treatment.

ECIPE conclude that if it seriously intends to increase the share of biofuels in its energy mix, "Europe... needs to reconsider the role of trade in achieving this ambition".

The full report can be downloaded from ECIPE's website.