Concerns EU’s Renewable Energy Directive Breaks Rules Of Free Trade

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The European Union renewable energy regulation may became a subject of dispute in the World Trade Organization (WTO),  warned Monday the Globalization Institute, adding that lack of transparency and discrimination towards foreign biofuel suppliers cause the Renewable Energy Directive to break the WTO provisions on free trade.

“The directive demands new standards for the biofuels development in order to obtain a substantial reduction of greenhouse gases emissions. However, there is a constant mess about European environmental policy”, according to Dr. Tomasz Teluk, President of the Globalization Institute. “There is no certainty that the raw materials promoted by Eu politicians provide the highest possible emission savings”, he added.

In the opinion of the Globalization Institute the directive prefers certain kinds of biofuels, mostly the ones based on the rapeseed oil, and discriminates therefore against the other suppliers who base their biofuels on soybean oil, palm oil, or sugar cane. This sort of activity may result in bitter conflict in the WTO between EU and such countries as Brazil, United States of America, or Asian countries, according to the Institute.

The statement of the Globalization Institute in this regard — which will be officially announced in late November — points out that RED directive should include reliable data and transparent criteria for different raw materials that can potentially be used in biofuels productions and could help to meet the goal of the highest possible reduction of the greenhouse gases emission.

Moreover, the rules of the free market ought to be preserved, which means equal rights for both European and non-European producers to supply biofuels, according to the Institute.

“Superficial and arbitrary assessment of biofuels should be rejected. We assume that this product exists on the market and there is a demand for it. Therefore, the customers should be left alone to exercise the power to decide which product meets their expectations,” said Teluk

According to the Institute, the consumption of biofuels in Europe was ca. 13.9 tons in 2010, up 13.6% from 2009, but same time dynamics of development dropped by half. Between 2008 and 2009 the market rose by 28.9%.

The most important biofuel is biodiesel which share on the biofuel market is 77%. The main producer of biodiesel is Germany, with the production of 4.8 million cubic meters of fuel a year. This represents a quarter of gross European demand for biofuels. The share of biodiesel varies in different countries. In 2011 there were increases: in Italy from 3.5% to 4%, in Spain from 5.83% to 7%, and in Poland from 5.75% to 6.2%

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