WT/DS600/1, G/L/1384  
G/TBT/D/54, G/SCM/D131/1  
 
19 January 2021  
(21-0563) Page: 1/9 
  Original: English  
 
 
EUROPEAN UNION AND CERTAIN MEMBER STATES  – CERTAIN MEASURES CONCERNING  
PALM OIL AND OIL PALM CROP -BASED BIOFUELS  
REQUEST FOR CONSULTATIONS BY MALAYSIA  
The following communication, dated  15 January 2021 , from the delegation of Malaysia  to the 
delegation s of the European Union , France and Lithuania,  is circulated to the Dispute Settlement 
Body in accordance with Article 4.4 of the DSU.  
 
_______________  
 
 
My authorities have instructed me to request consultations with the European Union, as well as 
France and Lithuania, pursuant to Article 4 of the DSU, Article XXII of the General Agreement on 
Tariffs and Trade 1994 ( 'GATT 1994 '), Article 14 of the Agreemen t on Technical Barriers to Trade 
('TBT Agreement ') and Article 30 of the Agreement on Subsidies and Countervailing Measures 
('SCM Agreement '), regarding certain measures imposed by the EU and EU Member States affecting 
palm oil and oil palm crop -based biof uels from Malaysia.  
Malaysia considers that these measures are inconsistent with the obligations of the EU and the EU 
Member States concerned under the GATT 1994, the TBT Agreement, and the SCM Agreement.  
A. Background  
1. Malaysia is the world 's second l argest producer of palm oil. In 2019, Malaysia produced around 
19.86 million metric tonnes of crude palm oil, accounting for 28% of world palm oil production and 
33% of world palm oil exports.1 In 2019, Malaysia exported around 1.9 million metric tonnes o f palm 
oil to the EU. The palm oil industry directly employs more than one million Malaysians and 40% of 
all palm oil plantations in Malaysia are owned or farmed by smallholder farmers, who have benefited 
from oil palm cultivation.2 Palm oil production and export has been a major factor in Malaysia 
reducing poverty from 50% in the 1960s, down to less than 5% today.  
2. As one of the biggest producers and exporters of palm oil and palm oil products , Malaysia 
recognises that it has an important role to play in fulfilling the growing global need for oils and fats 
in a sustainable manner. Malaysia is a responsible producer of palm oil and has long taken the lead 
in the continuous process of making palm oil production more sustainable and environmentally 
friendly. As of December 2020, nearly 90% of Malaysia 's total oil palm cultivation has obtained 
Malaysian Sustainable Palm Oil (MSPO) certification. Additionally, as at that date , 428 of Malaysia 's 
452 oil palm mills, corresponding to aroun d 95% of total milling capacity, received the MSPO 
certification. Most recently, on 1 January 2020, Malaysia made the MSPO certification mandatory.   
3. It is important to recall Malaysia 's commitment at the 1992 Rio Earth Summit, where it pledged 
to maintain at least 50% of the country 's landmass under forest cover. On the basis of data from 
 
1 Malaysian Palm Oil Council (MPOC), Malaysian Palm Oil Industry. Available at: 
http://mpoc.org.my/malaysian -palm-oil-industry/ . Malaysian Palm Oil Board, Production 2019. Available at 
http://bepi.mpob.gov.my/index.php/en/production/production -2019/production -of-oil-palm-products -
2019.html .  
2 Malaysian Palm Oil Council  (MPOC). Available at 
http://theoilpalm.org/about/http://theoilpalm.org/about/ . WT/DS600/1 • G/L/1384 • G/TBT/D/54 • G/SCM/D131/1  
 
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  2018, about 55.3% of Malaysia 's 33 million hectares (ha) land areas are under forest cover, 
exceeding the country 's pledge made at the Rio Earth Summit.  
4. In the  context of addressing the environmental risks posed by the extensive use of fossil fuels, 
the EU and its Member States have, since 2009, adopted a policy of promoting the use of biofuels 
by setting national targets for the use of renewable energy in vario us sectors, including the transport 
sector. This policy led to a rapid increase in the EU consumption of biofuels, produced mainly from 
food crops.  
5. While the measures taken by the EU and EU Member States under this policy pursue the reduction 
of greenh ouse gas ( 'GHG') emissions and the achievement of commitments under international 
climate agreements, some of these measures contravene their WTO obligations. In 2018 and 2019, 
the EU adopted legislative measures  that, in simple terms, define palm oil as a n unsustainable 
feedstock for the production of biofuel. The EU further argues that only palm oil production entails 
a high risk of indirect land -use change ( 'ILUC'). On that basis, oil palm crop -based biofuels cannot 
be counted towards EU renewable energy  targets.3  
6. Generally speaking, the measures adopted by the EU, as well as the related measures adopted 
by EU Member States, confer unfair benefits to EU domestic producers of certain biofuel feedstocks, 
such as rapeseed oil and soy, and the biofuels p roduced therefrom, at the expense of palm oil and 
oil palm crop -based biofuels from Malaysia. These measures may also discriminate against Malaysian 
palm oil and oil palm crop -based biofuels in favour of 'like products ' from third countries.  
7. Malaysia su bmits that the measures adopted by the EU and its Member States currently already 
limit and will increasingly limit the volume of Malaysian palm oil and oil palm crop -based biofuels 
that can be counted towards reaching EU renewable energy targets and, cons equently, that will be 
sold in the EU market.  
B. The measures at issue  
a. EU measures  
EU renewable energy target  
8. The EU Renewable Energy Sources Directive ( 'RED II ') (2018) establishes a new binding EU target 
of a share of at least 32% of renewable energy in the EU gross final consumption of energy by 2030, 
aiming at “[e]nsur(ing) robust GHG emission savings and minimiz(ing) unintended environmental 
impacts”.4 EU Member States are required to transpose this general renewable energy policy 
framework by 30 June 2021.5 
9. The RED II also places a cap on biofuel consumption in the transport sector, which an EU Member 
State may take into account for its calculation of the share of energy from renewable sources and, 
ultimately, when assessing wh ether it achieves its renewable energy target. The amount of biofuels 
that may be derived from food and feed crops is set at 7% (or lower6) of total energy consumption 
in the transport sector. For the transport sector, the RED II sets an overall objective  of achieving 
14% of its energy consumption from renewable sources by 2030.7 
10. After 1 January 2021, EU Member States ' share of energy from renewable sources may not fall 
below certain specified thresholds.8 The thresholds are based on a calculation of  the sum of: (i) the 
gross final consumption of electricity from renewable sources; (ii) the gross final consumption of 
 
3 See European Commission, Factsheet, Indirect Land Use Change, 17 October 2012, available at 
https://ec.europa.eu/commission/presscorner/detail/de/MEMO_12_787  (accessed 13 January 2021). See also 
Recitals 80 and 81 of the RED II.  
4 Article 3(1) of and recital 8 in the preambl e to the RED II.  
5 Article 36(1) of the RED II.   
6 Article 26(1) of the RED II  allows Member States to set lower limits and, in so doing, to distinguish 
between biofuels, bioliquids and biomass fuels produced from food and feed crops and specifically from  oil crops . 
7 Article 25(1) of the RED II.   
8 Article  3(4) of the RED II.  WT/DS600/1 • G/L/1384 • G/TBT/D/54 • G/SCM/D131/1  
 
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  energy from renewable sources in the heating and cooling sector; and (in relevant part) (iii) the final 
consumption of energy from renew able sources in the transport sector.9 
11. In calculating an EU Member State 's gross final consumption of energy from renewable sources, 
the share of biofuels, bioliquids, or biomass fuels associated with a high risk of ILUC and produced 
from food and fee d crops for which “a significant expansion of the production area into land with 
high-carbon stock is observed”, must be below the consumption level of such fuels in that Member 
State in 2019 (unless such fuels are certified to be 'low ILUC -risk' fuels). T he share of these 'high 
ILUC-risk' biofuels, bioliquids, or biomass fuels may not exceed the level of consumption of such 
fuels in a given EU Member State in 2019, unless they are certified to be 'low ILUC -risk' biofuels, 
bioliquids or biomass fuels. From 31 December 2023 and until 31 December 2030 at the latest, that 
limit is to gradually decrease to 0%.10 
ILUC-risk 
12. Commission Delegated Regulation (EU) 2019/807 supplements the RED II by laying down the 
criteria for determining the high ILUC -risk feedst ock for which a significant expansion of the 
production area into land with high carbon stock is observed, as well as for certifying low ILUC -risk11 
biofuels, bioliquids and biomass fuels. The 'scientific basis ' for these criteria is provided in the 
Production Expansion Report.  
13. Under Article 3 of Commission Delegated Regulation (EU) 2019/807, for purposes of determining 
high ILUC -risk feedstock for which a significant expansion of the production area into la nd with high -
carbon stock is observed, two cumulative criteria are applied: 1) the average annual expansion of 
the global production area of the feedstock since 2008 must be higher than 1% and affect more 
than 100,000 hectares; and 2) the share of such exp ansion into land with high -carbon stock must 
be higher than 10%, in accordance with a particular mathematical formula, which consists of the 
share of expansion into land with high -carbon stock, the share of expansion into land referred to in 
Article 29(4)( b) and (c) of the RED II, and the share of expansion into land referred to in 
Article  29(4)(a) of the RED II, including peatland. The Commission Delegated Regulation (EU) 
2019/807, however, does not provide any explanation or guidance as to the scientific rationale of 
the factors and values taken into account for these criteria. The selected reference period, as well 
as the benchmark for annual expansion, appear to have been skilfully set so that only palm oil would 
be negatively affected by the measure.  
14. The criteria for determining the high ILUC -risk feedstock and low ILUC -risk biofuels, bioliquids 
or biomass fuels were based on the alleged overall expansion with respect to each particular 
feedstock, and not on a transparent methodology based on the cir cumstances in a particular country 
or the particular circumstances of production, including the management of land. The mechanism 
does not, inter alia , take into account features unique to tropical regions, which have a considerably 
larger forest cover tha n other WTO Members, such as the EU.  
15. Contrary to its intended purpose, the Production Expansion Report does not offer sound, 
accurate, and comprehensive scientific evidence to support the conclusions reached with respect to 
the respective commodities.  As the Production Expansion Report itself admits, the available data has 
oftentimes either been selectively chosen or has been “assumed”, because the actual data was often 
unavailable or not found.12 
16. The certification as low ILUC -risk, as provided by Commission Delegated Regulation (EU) 
2019/807, is possible for biofuels, bioliquids, and biomass fuels that are produced under 
circumstances that avoid ILUC effects, if all relevant criteria are met (i.e., such products comply with 
 
9  Article 7(1) of the RED II.  
10  Article 26(2) of the RED II.  
11 Low ILUC -risk biofuels, bioliquids and biomass are defined in Article 2(37) of RED II as "biofuels, 
bioliquids and biomass fuels, the feedstock of which was produced within schemes which avoid displacement 
effects of food and feed -crop based biofuels, bio liquids and biomass fuels through improved agricultural practices 
as well as through the cultivation of crops on areas which were previously not used for cultivation of crops, and 
which were produced in accordance with the sustainability criteria for biofu els, bioliquids and biomass fuels laid 
down in Article 29 ".  
12 Report from the Commission to the European Parliament, the Council, the European Economic and 
Social Committee and the Committee of the Regions on the status of production expansion of relevant  food and 
feed crops worldwide, COM(2019) 142 final (13 March 2019), pp. 8, 13, 14.  WT/DS600/1 • G/L/1384 • G/TBT/D/54 • G/SCM/D131/1  
 
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  the sustainability and G HG emissions saving criteria set out in Article 29 of the RED II, such products 
have been produced from additional feedstock obtained through additionality measures that meet 
the specific criteria set out in Article 5 of Commission Delegated Regulation (EU ) 2019/807, and the 
evidence needed to identify the additional feedstock and to substantiate claims regarding the 
production of additional feedstock is duly collected and thoroughly documented by the relevant 
economic operators).13  
17. Although the RED II  does not single out any particular fuels as carrying high -ILUC risk, it follows 
from Commission Delegated Regulation (EU) 2019/807 that only oil palm crop -based biofuels must 
be certified as low ILUC -risk in order to be used for meeting the EU renewable e nergy targets and 
benefit from EU Member States ' support schemes. It appears that the conditions set out in Articles 
4 and 5 of Commission Delegated Regulation (EU) 2019/807 are designed in a manner so as to 
effectively preclude any oil palm crop -based bio fuels from meeting them.  
18. EU Member States will still theoretically allow the importation of high ILUC -risk feedstocks or 
biofuels, bioliquids, and biomass fuels produced therewith. Between 31 December 2023 and 31 
December 2030, however, the share of f uels produced from feedstocks considered by the EU as high 
ILUC-risk feedstocks is to gradually decrease to 0 for the calculation of an EU Member  State 's gross 
final consumption of energy from renewable sources referred to in Article 7 of the RED II and th e 
minimum share referred to in the first sub -paragraph of Article 25(1) of the RED II. As a result, the 
demand for biofuels will inevitably turn to fuels that may be taken into account in order to meet the 
EU renewable energy targets and that benefit from EU Member States ' support measures.14 
The sustainability and GHG emission savings criteria  
19. To be taken into account for the purpose of contributing towards the EU 's renewable energy 
targets and being eligible for financial support under the relevant support schemes put in place by 
EU Member States, energy from biofuels, bioliquids, and biomass fuels must also satisfy the 
sustainability and GHG emission savings criteria.15 
20. The GHG emission savings criteria provide that the greenhouse gas e mission savings from the 
use of biofuels, bioliquids and biomass fuels shall be either 50%, 60%, or 65% of total emissions 
from the use of the biofuel, depending on the age of the installation in which that fuel is produced.16 
21. The European Commission m ay decide on the eligibility of the voluntary national or international 
schemes setting standards for the production of biofuels, bioliquids or biomass fuels, or other fuels. 
To this end, the European Commission may adopt implementing legislation laying do wn rules 
regarding, inter alia , adequate standards of reliability, transparency and independent auditing that 
must be satisfied by all voluntary schemes.17 However, the same opportunity is not provided as 
regards the mandatory systems of sustainability sta ndards, such as the government -imposed MSPO 
standard, which arguably should be recognised by the EU and reflected in the measures at stake.  
22. Malaysia understands that the measures at issue are set up and implemented through, inter 
alia, the following l egal and other instruments, considered alone and in combination:  
i. Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 
2018 on the promotion of the use of energy from renewable sources (recast), OJ 2018 L 
328, p. 80 ( 'RED I I');  
ii. Commission Delegated Regulation (EU) 2019/807 of 13 March 2019 supplementing Directive 
(EU) 2018/2001 of the European Parliament and of the Council as regards the determination 
 
13 Articles 4 and 5 of the Delegated Regulation 2019/807, identify the cumulative criteria that must be 
met in order to certify biofuels, bioliquids and biomass fuels as low  ILUC-risk. These criteria include the 
sustainability and GHG emissions saving criteria and the need to comply with additionality requirements.  
14 Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the 
promotion of  the use of energy from renewable sources. 26 Id. article 26.2  
15 Article 29(1) of the RED II . 
16 Article 31 of and Annex V to the RED II lay down rules for calculating the GHG impact of biofuels, 
bioliquids and their fossil fuel comparators . 
17 Article 30(8) of the RED II.   
 WT/DS600/1 • G/L/1384 • G/TBT/D/54 • G/SCM/D131/1  
 
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  of high indirect land -use change -risk feedstock for which a significant e xpansion of the 
production area into land with high carbon stock is observed and the certification of low 
indirect land -use change -risk biofuels, bioliquids and biomass fuels, OJ 2019 L 133, p. 1 
('Delegated Regulation 2019/807 ');  
iii. Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the 
promotion of the use of energy from renewable sources and amending and subsequently 
repealing Directives 2001/77/EC and 2003/30/EC, OJ 2009 L 140, p. 16 ( 'RED I '), as 
amended by Directive ( EU) 2015/1513 of the European Parliament and of the Council of 9 
September 2015 amending Directive 98/70/EC relating to the quality of petrol and diesel 
fuels and amending Directive 2009/28/EC on the promotion of the use of energy from 
renewable sources, O J 2015 L 239, p. 1;  
iv. Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 December 
2018 on the Governance of the Energy Union and Climate Action, amending Regulations 
(EC) No 663/2009 and (EC) No 715/2009 of the European Parliament and of the Council, 
Directives 94/22/EC, 98/70/EC, 2009/31/EC, 2009/73/EC, 2010/31/EU, 2012/27/EU and 
2013/30/EU of the European Parliament and of the Council, Council Directives 2009/119/EC 
and (EU) 2015/652 and repealing Regulation (EU) No 525 /2013 of the European Parliament 
and of the Council, OJ 2018 L 328, p. 1 ( 'Regulation 2018/1999 ');  
v. European Parliament Resolution of 4 April 2017 on palm oil and deforestation of rainforests 
(2016/2222(INI)), OJ 2018 C 298, p. 2 ( 'Resolution of 4 April 20 17');  
vi. Report from the Commission to the European Parliament, the Council, the European 
Economic and Social Committee and the Committee of the Regions on the status of 
production expansion of relevant food and feed crops worldwide, COM(2019) 142 final 
(13 March 2019) ( 'Production Expansion Report '); and  
vii. Any annexes thereto, amendments, supplements, replacements, renewals, extensions, 
implementing measures or any other related measures, and any exemptions applied.  
b. EU Member States ' measures  
23. The RED II envisages that the renewable energy targets be reached by adopting at the EU 
Member States ' level various support schemes, including tax refunds, reductions, or exemptions.18 
Two EU Member States, namely France and Lithuania, have already adopted me asures that 
transpose the RED II into national legislation. Malaysia requests consultations regarding these 
measures. However, Malaysia also notes that other EU Member States are in the process of adopting 
their respective national transposition measures t hat are inconsistent with their WTO 
obligations.19Malaysia reserves the right to raise matters regarding the measures of other EU 
Member States during the consultations.  
French 'General Tax on Polluting Activities – Fuel Tax ' 
24. In view of the provisions of the RED II and Commission Delegated Regulation (EU) 2019/807, 
France has introduced a General Tax on Polluting Activities, which includes a tax on the consumption 
of petrol and diesel (the 'the French fuel tax '). The French  fuel tax  provides incentives for the 
 
18 Article 2(5) of the RED II.  
19 We note in this regard the draft Besluit to t wijziging van het Besluit energie vervoer in verband met de 
implementatie van Richtlijn (EU) 2018/2001 van het Europees Parlement en de Raad van 11 december 2018 ter 
bevordering van het gebruik van energie uit hernieuwbare bronnen en ter uitvoering van h et Klimaatakkoord 
(draft Decision amending the Transport Energy Decree in connection with the implementation of Directive (EU) 
2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of 
energy from renewable sources and in implementation of the Climate Agreement ) (unofficial translation from 
Dutch) published by the Government of the Netherlands. This draft decision provides that, already from 2022, 
only biofuels supplied from food and feed crops that are certi fied as having a ‘low risk of indirect land use change 
(ILUC) ' may be counted towards the relevant threshold in the Netherlands. We also note the forthcoming 
measures by the Government of Denmark, as laid out in its Klimahandlingsplan  (climate action plan) , which 
notes that: "As early as 2021, biofuels based on palm oil will be excluded from being included in the blending 
requirement, and from 2022, both biofuels based on palm oil and soybean oil will be excluded from being able 
to be included in the target  fulfillment of the CO2 displacement requirement " (unofficial translation from Danish).  WT/DS600/1 • G/L/1384 • G/TBT/D/54 • G/SCM/D131/1  
 
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  consumption of petrol and diesel that contain certain oil crop -based biofuels in order to meet EU 
renewable energy targets. More specifically, the tax rate for petrol and diesel is reduced depending 
on the volume of bi ofuels included.20  
25. The French Customs Code expressly states that palm oil -based products are not considered as 
biofuels.21 The practical implication of this provision is that petrol and diesel that contain oil palm 
crop-based biofuels cannot benefit f rom the lower tax rate. Oil palm crop -based biofuels are, 
therefore, deprived of any benefit that would accrue as a result of those tax measures and will be 
at a competitive disadvantage vis -à-vis competing 'like products '. 
26. By reducing the tax rate on petrol and diesel containing biofuels other than oil palm crop -based 
biofuels, France foregoes government revenue that is otherwise due and thereby confers a benefit 
to the producers of those biofuels. By specifically excluding oil palm crop -based biofuels  from those 
tax reductions, the French fuel tax expressly discriminates against oil palm crop -based biofuels and 
operates so as to impede and displace imports of oil palm crop -based biofuels from Malaysia into 
the French market.  
27. Malaysia understands th at the French fuel tax measure is set up and implemented through the 
following legal instruments:  
i. Article 266 quindecies of the French Customs Code, as modified by Article 192 of the Law no 
2018-1317 on 28 December 2018 for 2019 finances;  
ii. Article L. 661 -2 of the French Energy Code;  
iii. French Decree no 2019 -570 of 7 June 2019 on the incentive tax relating to the incorporation 
of biofuels, JORF no 0133 of 9 June 2019, no. 13;  
iv. French Decision of 23 November 2011 modified taking into account the application of th e 
order n° 2011 -1105 of 14 September 2011 and Decree no 2011 -1468 of 9 November 2011, 
relating to the sustainability of biofuels and bioliquids;  
v. French Decision of 2 May 2012 relating to the energy content of biofuels and fuels;  
vi. French Circulaire of 12 Jun e 2019 – Tax relating to the incorporation of biofuels ( 'TRIB'), 
NOR: CPAD1917078C; and  
vii. Any annexes thereto, amendments, supplements, replacements, renewals, extensions, 
implementing measures or any other related measures, and any exemptions applied.  
Lithuania's Law No XI -1375 on renewable energy  
28. In view of the provisions of the RED II and Commission Delegated Regulation (EU) 2019/807, 
Lithuania has amended its law on renewable energy to reflect the revised EU rules on ILUC.  
29. Lithuania, like any oth er EU Member State, will still theoretically allow the importation of high 
ILUC-risk feedstocks or biofuels, bioliquids, and biomass fuels produced therewith. By 2030, 
however, the share of fuels produced from feedstocks considered by the EU as high ILUC -risk 
feedstocks are to gradually decrease to 0 for the calculation of Lithuania 's gross final consumption 
of energy from renewable sources referred to in Article 7 of the RED II and the minimum share 
referred to in the first subparagraph of Article 25(1) of  the RED II. As a result, the demand for 
 
20 Article 266 quindecies of the French Customs Code, as modified  by Article 192 of Loi n° 2018 -1317 du 
28 décembre 2018 de finances pour 2019. See also Décret no 2019 -570 du 7 juin 2019 portant sur la taxe 
incitative relative à l'incorporation de biocarburants, JORF no 0133 of 9 June 2019, no. 13; Ministère de l 'Action  
et des Comptes publics, Circulaire du 12 juin 2019 – Taxe incitative relative à l 'incorporation de biocarburants 
(TIRIB). Available at https://www.douane.gouv.fr/sites/default/files/bod/src/dana/da/Energie -environnement -
loi%20de%20finances_19 -023.pdf  and Annexes. Available at 
https://www.douane.gouv.fr/sites/default/files/bod/src/dana/da_annexes/Energie -environnement -
loi%20de%20finances_19 -023_1.pdf . 
21 Article 266 quindecies V B 2. (3°) of the French Customs Code, as modified by Article 1 92 of Loi n° 
2018-1317 du 28 décembre 2018 de finances pour 2019.  WT/DS600/1 • G/L/1384 • G/TBT/D/54 • G/SCM/D131/1  
 
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  biofuels will inevitably turn to fuels that may be taken into account in order to meet the EU renewable 
energy targets and that benefit from EU Member States ' support measures.  
30. Malaysia understands that the Lith uanian measure is set up and implemented through the 
following legal instruments:  
i. Lithuania 's Law No XI -1375 on renewable energy, as amended by Law No XIII -2869 
amending Articles 1, 2, 3, 4, 5, 6, 11, 13, 14, 16, 17, 20, 20(1), 22, 25, 28, 29, 35, 37, 38, 
39, 46, 48, 49, 55, 58, 59, 60, 61, 62, 63, 63, 64 and the Annex of Law No XI -1375 on 
renewable energy, repealing Article 11(1) and adding Article 20(2) of 28 April 2020; and  
ii. Any annexes thereto, amendments, supplements, replacements, renewals, extensi ons, 
implementing measures or any other related measures, and any exemptions applied.  
C. Legal basis for the complaint in respect of the EU measures  
31. With regard to the EU measures, as embodied and developed in the respective legal instruments 
as speci fied in para. 22 herein and as applied by the relevant authorities, Malaysia considers 
that these measures are inconsistent with the EU 's obligations under the GATT 1994 and the 
TBT Agreement. In particular, the measures are inconsistent with:  
GATT 1994  
i. Article I:1 of the GATT 1994, because the measures at issue, which limit and will 
progressively phase out oil palm crop -based biofuels from being counted towards reaching 
EU renewable energy targets and which provide criteria for certifying low ILUC -risk bi ofuels, 
discriminate among 'like' feedstocks and derived biofuels originating in third countries;  
ii. Article III:4 of the GATT 1994, because the measures at issue, which limit and will 
progressively phase out oil palm crop -based biofuels from being counted t owards reaching 
EU renewable energy targets and which provide criteria for certifying low ILUC -risk biofuels, 
accord less favourable treatment to imported palm oil and oil palm crop -based biofuels than 
they do to 'like' domestic feedstocks and derived biof uels, thereby modifying the conditions 
of competition to the detriment of the imported palm oil and oil palm crop -based biofuels , in 
particular from Malaysia;  
iii. Article X:3(a) of the GATT 1994, because the measures at issue, which limit and will 
progressivel y phase out oil palm crop -based biofuels from being counted towards reaching 
EU renewable energy targets and which provide criteria for certifying low ILUC -risk biofuels, 
are administered in a manner that is not uniform, impartial and/or reasonable; and  
iv. Article XI:1 of the GATT 1994, because the measures at issue, which limit and will 
progressively phase out oil palm crop -based biofuels from being counted towards reaching 
EU renewable energy targets, and which provide criteria for certifying low ILUC -risk biofuels, 
restrict the importation of palm oil and oil palm crop -based biofuels.  
TBT Agreement  
v. Article 2.1 of the TBT Agreement, because the measures at issue,  which limit and will 
progressively phase out oil palm crop -based biofuels from being counted t owards reaching 
EU renewable energy targets, being technical regulations  within the meaning of Annex 1.1 
of the TBT Agreement, have a detrimental impact on the competitive conditions in the EU 
market of Malaysia 's imports of oil palm crop -based biofuels co mpared with 'like products ' 
imported into the EU from other countries and compared with 'like' domestic products;  
vi. Article 2.2 of the TBT Agreement, because the measures at issue, which limit and will 
progressively phase out oil palm crop -based biofuels fro m being counted towards reaching 
EU renewable energy targets, being technical regulations  within the meaning of Annex 1.1 
of the TBT Agreement, are more trade -restrictive than necessary to achieve the objectives 
pursued by the measures;  WT/DS600/1 • G/L/1384 • G/TBT/D/54 • G/SCM/D131/1  
 
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  vii. Article 2.4 of the  TBT Agreement, because the measures at issue, which limit and will 
progressively phase out oil palm crop -based biofuels from being counted towards reaching 
EU renewable energy targets, being technical regulations  within the meaning of Annex 1.1 
of the TBT  Agreement, are not based on the relevant international standards;  
viii. Article 2.5 of the TBT Agreement, because the EU, in preparing, adopting or applying the 
measures at issue, which limit and will progressively phase out oil palm crop -based biofuels 
from be ing counted towards reaching EU renewable energy targets, being technical 
regulations  within the meaning of Annex 1.1 of the TBT Agreement, has failed, upon the 
request of Malaysia, to explain the justification for those measures in terms of Articles 2.2 
to 2.4 of the TBT Agreement;  
ix. Article 2.8 of the TBT Agreement, because the measures at issue, which limit and will 
progressively phase out oil palm crop -based biofuels from being counted towards reaching 
EU renewable energy targets, being technical regulat ions within the meaning of Annex 1.1 
of the TBT Agreement, are based on an abstract and unsubstantiated high -ILUC risk concept 
instead of the performance of such biofuels;  
x. Article 2.9 of the TBT Agreement, because the measures at issue, which limit and wil l 
progressively phase out oil palm crop -based biofuels from being counted towards reaching 
EU renewable energy targets, being technical regulations  within the meaning of Annex 1.1 
of the TBT Agreement, were adopted without the required timely publication a nd notification 
of these measures and organising an adequate process for commenting;  
xi. Article 5.1.1 of the TBT Agreement, because the EU, by preparing, adopting or applying the 
measures at issue, which provide criteria for certifying low ILUC -risk biofuels,  being 
conformity assessment procedures within the meaning of Annex 1.3 of the TBT Agreement, 
treats suppliers of oil palm crop -based biofuels from Malaysia less favourably than domestic 
suppliers of 'like' biofuels or suppliers from other WTO Members in a  comparable situation;  
xii. Article 5.1.2 of the TBT Agreement, because the EU, by preparing, adopting or applying the 
measures at issue, which provide criteria for certifying low ILUC -risk biofuels, being 
conformity assessment procedures within the meaning of Annex 1.3 of the TBT Agreement, 
creates unnecessary obstacles to international trade;  
xiii. Article 5.2 of the TBT Agreement, because the EU failed to make available the conformity 
assessment procedures to certify low ILUC -risk; 
xiv. Article 5.6 of the TBT Agreement, because the EU, with regards to the measures at issue, 
which provide criteria for certifying low ILUC -risk, being conformity assessment procedures 
within the meaning of Annex 1.3 of the TBT Agreement, neither notified nor enter into 
meaningful c onsultations, or allowed for comments  on such conformity assessment 
procedures;  
xv. Article 5.8 of the TBT Agreement, because the EU neither promptly published nor otherwise 
made available the measures at issue, which provide criteria for certifying low ILUC-risk 
biofuels, being conformity assessment procedures within the meaning of Annex 1.3 of the 
TBT Agreement; and  
xvi. Articles 12.1 and 12.3 of the TBT Agreement, because the EU, in the preparation and 
application of the measures at issue referred to above,  failed to take into account the 
circumstances specific to developing countries, in particular Malaysia,  where palm oil and oil 
palm crop -based biofuels are produced.  
D. Legal basis for the complaint in respect of the EU Member States ' measures  
a. France  
32. The set of advantages granted by France for oil crop -based biofuels, as embodied and developed 
in the respective legal instruments, as specified in paragraphs 24 to 27 herein, and as applied by 
the relevant authorities, are inconsistent with the obliga tions of France under the GATT 1994 and WT/DS600/1 • G/L/1384 • G/TBT/D/54 • G/SCM/D131/1  
 
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  the SCM Agreement. In particular, the set of advantages described above, as contained in the 
mentioned legal instruments, are inconsistent with:  
GATT 1994  
i. Article I:1 of the GATT 1994, because the measures at issue,  under which the tax on petrol 
and diesel is only reduced when they contain biofuels other than oil palm crop -based biofuels, 
discriminates against 'like' biofuels by granting an advantage, in the form of a tax reduction, 
to biofuels of some countries, tha t is not granted to all WTO Members, and in particular not 
to Malaysia, and  
ii. Article III:2 of the GATT 1994, because the measures at issue, under which the tax on petrol 
and diesel is only reduced when they contain biofuels other than oil palm crop -based bi ofuels, 
indirectly applies a tax on imported oil palm crop -based biofuels: (1)  in excess to 'like' 
domestic biofuels;  or (2) which is not similar to the tax on 'directly competitive and 
substitutable ' domestic biofuels, and affords protection to the production of these domestic 
biofuels.  
SCM Agreement  
iii. Articles 3 and 5 of the SCM Agreement, because the measures at issue, under which the 
French Government reduces the tax on petrol and diesel containing c rop-based biofuel other 
than oil palm crop -based biofuels and excludes petrol and diesel containing oil palm crop -
based biofuels from this tax reduction, amount to a subsidy within the meaning of Article 1 
of the SCM Agreement which is: (1) a prohibited im port substitution subsidy within the 
meaning of Article 3.1(b); and/or (2) an actionable subsidy causing an adverse effect on the 
interests of Malaysia within the meaning of Article 5(c) of the SCM Agreement.  
b. Lithuania  
33. Concerning Lithuania 's measur es (including any annexes thereto, amendments, supplements, 
replacements, renewals, extensions, implementing measures or any other related measures, and 
any exemptions applied), as implemented and/or applied by the latter in line with its obligations as 
a EU Member State regarding the transposition of the RED II, Malaysia claims that those measures 
are inconsistent with the same WTO obligations as provided for in paragraph 31 and/or 32 herein.  
c. Other EU Member States  
34. Malaysia contends that to the exte nt that any other EU Member State transposes the RED II and 
further implement and/or apply any measure(s) according to its obligations as regards the limitation 
and/or phasing out of oil palm crop -based biofuels from being counted towards reaching renewabl e 
energy targets, regardless of whether the said measures are explicit or implicit in their treatment of 
oil palm crop -based biofuels, such measure(s) shall be inconsistent with the same WTO obligations 
as provided for in paragraph 31 and/or 32 herein.  
E. Conclusion  
35. Malaysia considers that the measures at issue nullify or impair the benefits accruing to it directly 
or indirectly under the cited covered agreements.  
36. Malaysia reserves the right to raise additional matters during the course of the con sultations and 
in any future request for the establishment of a panel.  
37. Malaysia suggests holding the consultations as soon as possible and looks forward to a prompt 
reply by the European Union, France and Lithuania in order to set a mutually convenien t date and 
venue for these consultations.  
 
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