Trade and Environment Back in the Spotlight: Measuring-up the EU’s Rules on Biofuels – WTO Panel Report in EU – Palm Oil (DS600)

Since the adoption of the Paris Agreement in 2015, many WTO members, including the European Union (EU), have adopted measures designed to reduce anthropogenic greenhouse gas (GHG) emissions and address associated biodiversity loss. In this WTO dispute, Malaysia partially successfully challenged EU rules that limit the potential contribution of conventional biofuels in general, and palm-oil based biofuel in particular, towards the Union’s renewable energy targets. The Panel established that aspects of the rules limiting the eligibility of palm oil-based biofuel have been implemented in a way that is inconsistent with the non-discrimination rules under the Agreement on Technical Barriers to Trade (TBT) and under the General Agreement on Tariffs and Trade (GATT) 1994. The ‘palm oil dispute’ is the most recent occasion on which the WTO dispute settlement system has had to examine how environmental measures should be assessed against the core disciplines of international trade. Moreover, this Report has been circulated at a time when multiple international jurisdictions are seised of litigation relating in a broad sense to climate change, and other EU ‘green measures’ are the subject of intense debate amongst the WTO membership. This case review analyses the findings of the Panel that are likely to be considered as having systemic relevance.