EU challenges Canadian green power rules at WTO

Thu Aug 11, 2011 12:51pm EDT
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By Juliane von Reppert-Bismarck

BRUSSELS (Reuters) - The European Union has launched a legal challenge against Canada at the World Trade Organization to protest against provincial backing for solar and wind energy projects, the bloc's executive said on Thursday.

Following on the heels of a similar challenge by Japan, the row highlights a global battle for a slice of the lucrative and growing renewables market with countries including Canada, the United States and China moving to reserve public works projects worth billions of dollars for local firms.

It focuses on a scheme in Canada's Ontario province that guarantees above-market prices for renewable energy as long as it is generated with a set proportion of Canadian-made equipment or services.

The EU says the plan is illegal under global trade rules because it gives an unfair advantage to local producers.

"It is illegal to condition access to a subsidy to the use of domestic products," the European Commission said in a statement.

"The EU is also increasingly concerned by such measures taken by other trading partners," it added.

Known as the Ontario Green Energy and Economy Act, the initiative admits solar projects only if at least 40 percent of their initial development is made up of Ontario products and services, according to the EU.

Wind energy projects qualify if at least 25 percent of development can be traced to local firms.   Continued...