CANADIAN RENEWABLE ENERGY EQUIPMENT POLICIES INVITE WTO CHALLENGE

08/15/2011

The European Union (EU) followed Japan in lodging a complaint with the World Trade Organization (WTO) over subsidies that favor producers using domestic technology. Ontario's Green Energy Act allows the province's feed-in tariff program to pay above-market rates to renewable energy produced with a certain percentage of Canadian equipment. "This is in clear breach of the WTO rules that prohibit linking subsidies to the use of domestic products," said the European Commission in a statement. The EU backed Japan's complaint, but could not seek changes in Canada's policies as a third party. Under the plan, producers of wind energy must use 25% of its services and products from Ontario, rising to 50% for projects developed after 2012. For solar, the figures are 40-to-50% and 60%. According to Ottawa Citizen, the measures were designed to kickstart a green manufacturing industry in the province, as traditional manufacturing facilities have largely closed down or moved offshore. Energy Minister Brad Duguid said that he "suspect[s] there's a little bit of envy" at the jobs created in the province, while the EU said that it believed the Green Energy Act's subsidy is inconsistent with the country's WTO obligations. Japan, which was granted a panel to review its complaint, has said that it is "seriously concerned about a proliferation of such protectionist measures all over the world." For the full story, see http://www.ottawacitizen.com/business/Europe+fights+Ontario+power+subsidies/5244539/story.html. For the story on Japan's complaint, see http://www.rechargenews.com/business_area/politics/article268966.ece.Ā