EU launches first WTO case against UK over wind energy subsidy scheme
The EU has brought a WTO action against the UK government on the basis of the WTO Agreement on subsidiaries and countervailing measures (“SCM Agreement”). The EU claims that the UK has granted an unjustified State aid to UK-based beneficiaries to use UK-made wind turbines, thus breaching the principle of non-discriminatory treatment included in the SCM Agreement. The UK government’s alleged subsidy system relies upon the so called “Contract for Difference scheme” (CfD), which is a mechanism whereby the UK government supports low-carbon electricity generation, worth up to £285m to offshore wind developers to try to move away from volatile grants to businesses that invested into renewable energy. This WTO dispute is now going to go through the WTO Dispute Settlement Understanding process whereby the EU and the UK will enter into confidential consultations. If the consultations fail to settle a dispute within 60 days after the date of receipt of the request for consultations, the EU may request the establishment of a panel.