Brussels announced that new criteria introduced by the UK government in awarding subsidies to offshore wind projects prioritize users of domestically sourced turbines over imports that violate the regulations. of the WTO.

 

The move signals the beginning of the first dispute between the EU and the former member over the global trade body, since the end of the Brexit transition period in December 2020. It comes as The two sides are still at an impasse make withdrawal transactions.

“The criteria used by the UK government in awarding subsidies to offshore wind projects favor the UK over import content”, European Commission speak in a statement. “This violates the core WTO principle that imports must be able to compete on equal footing with domestic products and harms EU suppliers, including many small and medium enterprises, in green energy sector”.

The UK government said it would “strictly oppose” the claim.

UK difference scheme contracts to finance green energy projects, most of which are in fact offshore wind farms, are in the tender process.

Since December, the UK has been asking contractors to outline what the value of the contract will be manufactured in the UK to determine their eligibility. Subsequent payments are subject to the operator’s compliance with its commitment to that local manufacturing operation.

This encourages operators to favor UK content in their applications, to the detriment of imported inputs. It added that the WTO’s national treatment principle prohibits members from discriminating against imports in favor of domestic products.

Furthermore, such local content criteria lead to efficiency losses and increased prices for consumers, ultimately making the transition to renewable energy supplies safe. more difficult and costly”.

The UK is second only to China in terms of installed wind power capacity. But this concentration does not convert to UK employment and production boom, has instead benefited foreign companies, including those in the EU and China.

The RenewableUK lobby group estimates that only 29% of capital spending on offshore wind project into the UK economy. Prime Minister Boris Johnson wants to increase spending UK-based suppliers between 40 and 50% and 60% of lifetime spending, including maintenance.

A British official said it was “difficult for ministers” to understand why Brussels would challenge the plan when EU countries use similar methods. “At a time when the west should be unified in defeat PutinThis act of jealousy by Brussels is untimely and untimely,” he said. “We should work together to strengthen Europe’s clean energy security, not fight it out in court.”

The two sides have 60 days to reach an agreement at the WTO before Brussels can ask an arbitration panel to rule on the dispute, which could take at least a year.

Brussels’ move could put more domestic political pressure on Johnson to suspend parts of Northern Ireland Protocol by calling it Article 16. Many Conservative MPs have urged him to do so and end trade checks between Northern Ireland and the UK that have been agreed as part of Brexit.

The UK government said: “We are disappointed that the commission has taken this action at a time when we are focused on increasing energy security and providing homegrown renewable energy. ,” added: “The UK is in compliance with WTO law and will seriously challenge the EU. ”