Green Protectionism in the European Union: How Europe’s Biofuels Policy and the Renewable Energy Directive Violate WTO Commitments

ECIPE Occasional Paper No. 1/2009

What happened to the professed environmental goal to substitute fossil fuels wit biofuels, asks Fredrik Erixon in a new study of EU biofuels policy. Biofules policy has become an industrial policy using various measures to shelter domestic producers from foreign competition. Protectionism increases the cost of moving away from fossil fuels – but the EU is about to usher its policy farther in that direction with its Renewable Energy Directive. If it is implemented in the way that has proposed, the EU is likely to run afoul of its obligations in the World Trade Organisation (WTO).