EUROPEAN UNION AND CERTAIN MEMBER STATES – CERTAIN MEASURES CONCERNING PALM OIL AND OIL PALM CROP-BASED BIOFUELS REQUEST FOR CONSULTATIONS BY MALAYSIA
Document: REQUEST FOR CONSULTATIONS BY
Date: 19 January 2021
Document codes: WT/DS600/1; G/L/1384; G/TBT/D/54; G/SCM/D131/1
Complainant: Malaysia
Respondent: EU, France, Lithuania
Third parties: Argentina, Australia, Brazil, Canada, China, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Japan, South Korea, Norway, Russia, Saudi Arabia, Singapore, Thailand, Turkey, Ukraine, United Kingdom, U.S.
Dispute stage: Panel
Agreements cited: Art. I:1, III:2, III:4, X:3(a), XI:1  GATT 1994Art. 3, 5  Subsidies and Countervailing Measures (SCM)Art. 2.1, 2.2, 2.4, 2.5, 2.8, 2.9, 5.1.1, 5.1.2, 5.2, 5.6, 5.8, 12.1, 12.3  Technical Barriers to Trade (TBT)

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
delegations 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 biofuels 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 largest 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 of 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/.
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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 various 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 submits 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 whether 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 preamble 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.
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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 renewable 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). The 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 land 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 circumstances 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 than 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, bioliquids 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 biofuels, 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.
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the sustainability and GHG 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 biofuels 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 fuels 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 may 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 standards, 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 legal 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 II');
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.
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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, OJ 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 2017');
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 tot 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 certified 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).
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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 biofuels 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 that 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
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°
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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 biofuels,
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 biofuels, 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
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,
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 compared 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 from 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;
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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 and 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

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, that 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 biofuels,
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 crop-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 measures (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 extent 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 renewable
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 consultations 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.