An audience with the WTO: Japan and EU come forward with grievances against Ontario FiTs

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email

Almost a year and a half ago, Japan brought its grievances against FiTs in the Canadian province of Ontario to the World Trade Organisation (WTO). The EU has now joined the fray and the WTO Dispute Settlement Body has committed itself to establishing a panel to hear the EU’s claims against the apparent discriminatory nature of Ontario's FiTs. Formal panel proceedings, however, are not expected to start before the end of March.

Though the EU had requested consultations on the matter in summer 2011, the panel request followed only last week. Sources close to the case suggest this considerable gap between the failure of consultations and the EU’s panel request might partially be explained by it hoping that the case could be resolved otherwise. A heated election process in Ontario in autumn 2011 where the FIT programme itself took centre stage, had fuelled hopes for such a scenario. With the former Liberal governmental party staying in office, however, the FiT programme has been endorsed.

Passed in 2009 by the Liberal Party, Ontario’s Green Energy Act (GEA) was intended to make the province a renewable energy leader as it phased out coal and encouraged clean-tech investment whilst at the same time boosting the economy by creating jobs through domestic content requirements. The Act’s FiT program covers biomass, biogas, landfill gas, on-shore wind, solar PV and waterpower. So far, it has created 13,000 jobs and attracted CAN$20 billion in private-sector investment.

Japans grievances are not against Ontario’s FiTs, per se, but rather its domestic content level requirement. It states that renewable energy suppliers must meet a “minimum required domestic content level” in order to be eligible for the benefits of the FiT. Companies producing solar power who want to receive the price guarantees and grid access granted by the FIT, needs to ensure that 60% of the equipment used to produce that energy, including solar panels and respective services comes from Ontario.

Japan’s arguments are three-fold: firstly, the country argues that Article III.4 of the General Agreement on Tariffs and Trade (GATT) states imported goods must be accorded the same treatment as domestically produced goods. Secondly, Japan claims Ontario violates Article 2.1 of the Agreement on Trade-Related Investment Measures (TRIMs), which asserts that it is illegal to specify the proportion or value of local produce allowed to be used. Finally, Article 3.1(b) of the Subsidies and Countervailing Measures Agreement (SCM), alleges that Ontario’s FiT is only granted to power producers upon their use of a certain proportion of renewable energy equipment produced in the province rather.

However, many EU members are wary of dipping their toe too deep into these murky waters having installed similar FiT programmes themselves. The Italian Conto Energia 4 programme requires the use of at least 60% local-sourced material in order to qualify. However, less stringent domestic content level requirements within the EU can be said to be responsible for being able to keep it out of the spotlight.

Canadian policy experts continue to warn that a victory for Japan and the EU could result in evential disappointment as in this case, Canadian provinces cannot be forcced by the federal government – which is accountable to the WTO – to bring their measures into compliance.

Should a WTO panel find that the Buy-Ontario clause violates WTO law, it would not be news to the ears of trade law experts despite its case-specific impact. A ruling on the subsidy question, however, could clarify a number of outstanding issues and in that regard introduce greater legal certainty for countries that have implemented FITs or are planning to do so.
 

1 December 2021
Join over 500 attendees at this virtual conference on 1-2 December 2021 for expert presentations covering PV Module Technology, Supply & Site Optimisation for Utility-Scale. Delegates can access streamed presentations, session recordings and chat/messaging tools to connect with fellow delegates and speakers. Speakers include leading developers, manufacturers, testing and research institutes, including: NREL, Silicon Ranch, Sonnedix, Heliene, Powertis, LONGi Solar, JinkoSolar, PVEL, Risen Energy, Seraphim, STS, Trina Solar, Eternalsun Spire, QEERI, Fraunhofer, Estuary Capital Partners, VDE, First Solar, Longroad Energy, Powertis and DNV Energy Systems
2 December 2021
Intersolar is the world’s leading exhibition & conference series for the solar industry. As part of this event series, Intersolar India in Mumbai is India’s most pioneering exhibition and conference for India’s solar industry. It takes place annually and has a focus on the areas of photovoltaics, PV production and solar thermal technologies. Since 2019, Intersolar India is held under the umbrella of The smarter E India – India’s innovation hub for the new energy world.
9 December 2021
The Smart Energy Council is hosting Australia’s second Virtual Smart Energy Conference and Exhibition on Thursday, 9 December 2021. This event will show that the industry powers on despite COVID-19 and we are standing together undeterred in spirit. Bringing our global community together using the latest technology.
13 January 2022
Intersolar North America and Energy Storage North America “Come Together” for the first time in Long Beach, CA—connecting installers, developers, utilities, technology providers, policy makers, and key stakeholders from around the world to advance the clean energy future. With best-in-class conference programming, integrated exhibits and pavilions, and the live Solar Games installer competition, #isnaesna21 will showcase the industry trends, innovative solutions, and emerging talent transforming the solar, energy storage, and e-mobility markets. Register today to redeem our exclusive offer for PV Tech readers—free expo hall or 20% off full conference pass.
1 February 2022
As Solar Finance & Investment enters its ninth year, we sit on the cusp of a new power market with solar at its heart. The 2022 edition of the event will build on our years of expertise and relationships to bring investors and lenders together with top developers. Connect with leaders in the field and use exclusive insights to drive investment and development decisions for the future. Meet new and existing project partners at the largest gathering of European solar investors and lenders.
23 February 2022
Held annually since 2016, the Energy Storage Summit Europe is the place to be for senior stakeholders in the European storage industry. Designed to accelerate deployment of storage, we examine evolving chemistries, business models, project design, revenue stacks and use cases for storage. The 2022 edition will include exclusive content around longer duration solutions, energy strategies for wide-scale deployment of EVs and "EnTech", the event which sits at the intersection of digitisation, decentralisation and decarbonation of the power system. Come to meet TSOs, DSOs, Utilities, Developers, Investors and Lenders and leave with new contacts, partners and a wealth of information.

Read Next

PV Tech Premium
November 30, 2021
Array Technologies reveals to PV Tech Premium the core motivations behind its US$652m deal to acquire STI Norland, creating what it says is the world’s biggest tracker company, from stronger supply chains to an ability to target more international markets
November 30, 2021
Electrical equipment group Schneider Electric and energy major bp are collaborating to help high emission companies achieve their decarbonisation targets.
November 30, 2021
JinkoSolar has slashed its shipments guidance for the year, reducing its top end guidance by more than 5GW as it blamed ongoing logistics issues and port blockages.
November 30, 2021
Solar EPC company iSun is investing in US commercial PV project developer Encore Renewable Energy as part of efforts to accelerate its geographic expansion.
November 30, 2021
The CEO of Hevel Group, Igor Shakhray, will leave the company to become CEO of Unigreen Energy, a silicon wafer and cell manufacturer, which is owned by Hevel majority shareholder Ream Management LLC
November 30, 2021
South Korean LG Electronics has announced a series of new appointments as it aims to target greater growth and customer satisfaction moving into 2022, while also elevating certain critical departments to division level in order to supply them with greater resources

Subscribe to Newsletter

Upcoming Events

Solar Media Events
December 1, 2021
Solar Media Events
February 1, 2022
London, UK
Solar Media Events
February 23, 2022
London, UK
Solar Media Events
March 23, 2022
Austin, Texas, USA
Solar Media Events
March 29, 2022
Lisbon, Portugal