The “Parliament Magazine” published in their print edition of March 18 a comment by Silvana Koch-Mehrin on the EU’s Fuel Quality Directive:
Reality Check needed
While the discussions on the implementing measures for the Fuel Quality Directive are ongoing, a reality check about the proposal’s wider implications on trade and geopolitics is seriously required.
In the impact assessment currently ongoing, DG CLIMA asked to assess the methodology used to calculate the lifecycle greenhouse gas intensity of fossil fuels and its possible impact on competitiveness and administrative burden.
Once more however, the impact assessment does not look into the legal implications of the proposal, in particular as regards compatibility with WTO Rules.
These state that (1) there may be no discrimination of like-products which are essentially used for the same purpose and which have essentially the same physical properties; and (2) that legislation impacting trade needs to be proportionate in that the measures proposed, while achieving their desired benefits, have the least trade-restrictive impact possible.
DG CLIMA’s current legal assessment stands on thin ice. It consists merely of an informal one-pager, while in the meantime, trade law practitioners and academics have drawn up a number of articles and legal opinions, pointing at the possible inconsistencies of the proposal with WTO rules. However, the Commission does not seem to be concerned, despite the fact that Canada, as one of the parties negatively affected by the Fuel Quality Directive, has already announced that it will challenge the measures at the WTO for its trade distorting effects.
Disappointingly, the ILUC (Indirect Land Use Change) directive, which aims to limit CO2 intensity linked to the indirect land use change of bio fuels production is another Commission proposal believed to diverge from WTO rules.
It is time for the Commission to rethink the criteria of their impact assessments and categorically check legislative proposals on their trade impact.