EU and UK agree on way forward in WTO dispute concerning UK’s green energy subsidy scheme

The agreement is recorded in an exchange of letters between Executive Vice President Valdis Dombrovskis and the United Kingdom Secretary of State for International Trade Anne-Marie Trevelyan.

On 28 March 2022, the EU requested WTO consultations on the UK’s CfD scheme. The EU challenged local content criteria in the CfD scheme, which it considered to favour UK over imported content, and thus to be in breach of WTO non-discrimination rules.

As a result of the WTO consultations, the UK has now clarified that CfD beneficiaries do not need to achieve any particular level of UK content to receive payments. The UK has also published additional guidance to ensure that this is fully understood by the industry.

Executive Vice-President Valdis Dombrovskis said: “I welcome these constructive steps by the UK. They provide clarity and reassurance that EU industry can compete on a level playing field on the UK market. The WTO consultations fully served their purpose and the outcome addresses the EU’s concerns.”

Further information

In her letter to Executive Vice-President Valdis Dombrovskis, United Kingdom Secretary of State for International Trade Anne-Marie Trevelyan clarified that, under the CfD scheme, any data requested from potential beneficiaries about the level of UK content in their projects is used for information purposes only. CfD beneficiaries do not need to achieve any particular level of UK content to receive payments, nor are they bound by the envisaged level of UK content they indicated when first applying to the CfD scheme. CfD beneficiaries can choose their suppliers regardless of the supplier’s UK or non-UK origin, and they do not have to provide any reasons related to origin to justify their choice of a non-UK supplier over a UK supplier, or vice versa. The UK has published additional guidance on these points, and will write to CfD beneficiaries to draw their attention to these clarifications. These clarifications apply to the currently ongoing and future CfD allocation rounds.

In return, Executive Vice-President Dombrovskis indicated that on this basis and provided that the UK follows through, he is satisfied that there would be no need to pursue the WTO dispute further.

The EU will continue to work with the UK to ensure that the agreed way forward is now fully implemented.

For more information

Exchange of letters between Secretary of State Trevelyan and EVP Dombrovskis

EU Request for Consultations
EU challenges discriminatory practices of UK’s green energy subsidy scheme at WTO

WTO procedures flowchart
WTO dispute settlement
WTO cases launched by the EU