UNITED KINGDOM – MEASURES RELATING TO THE ALLOCATION OF CONTRACTS FOR DIFFERENCE IN LOW CARBON ENERGY GENERATION REQUEST FOR CONSULTATIONS BY THE EUROPEAN UNION
Document: REQUEST FOR CONSULTATIONS BY
Date: 30 March 2022
Document codes: WT/DS612/1; G/L/1428
Complainant: EU
Respondent: United Kingdom
Dispute stage: Consultation
Agreements cited: Art. III:4  GATT 1994

UNITED KINGDOM – MEASURES RELATING TO THE ALLOCATION OF CONTRACTS
FOR DIFFERENCE IN LOW CARBON ENERGY GENERATION
REQUEST FOR CONSULTATIONS BY THE EUROPEAN UNION
The following communication, dated 28 March 2022, from the delegation of the European Union to
the delegation of the United Kingdom, 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 Government of the
United Kingdom of Great Britain and Northern Ireland (United Kingdom) pursuant to Articles 1 and
4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) and
Article XXII:1 of the General Agreement on Tariffs and Trade 1994 (GATT 1994) with regard to the
inclusion of United Kingdom content in the context of the allocation of Contracts for Difference (CfD)
in low carbon energy generation.
The United Kingdom incentivises low carbon energy generation proj ects, mainly offshore wind,
through the use of CfD. CfD aim at incentivising investments in renewable energy by providing
developers of projects that have high upfront costs with a predictable income that protects them
from volatile high wholescale prices. In particular, CfD make low carbon energy generation projects
commercially viable by covering the difference between the cost of low carbon electricity generation
and the regular market price for electricity through the payment of a subsidy.
Three rounds of allocation of CfD have been conducted thus far in 2015, 2017 and 2019. The fourth
round, which opened for applications on 13 December 2021 and is expected to be allocated around
July or August 2022, incorporates United Kingdom local content as a crite rion for the eligibility of
applicants for all low carbon electricity generation projects of 300 MW or more and for the effective
payment of the subsidy to successful applicants for such projects.
The measures at issue, including their adoption, maintenance, application and administration by the
United Kingdom, through its actions or omissions, in law and in fact, are in particular:
- Making United Kingdom local content a criterion for the eligibility of applicants to
participate in the allocation of CfD; and
- Making attainment of the level of United Kingdom content as committed in the applicants'
initial eligibility application a criterion for effective payment of the subsidy.
These measures are put in place and evidenced by, and are implemented and administered through,
inter alia, the following legal and other instruments, considered alone and in any combination:
− Policy paper "Offshore wind Sector Deal - one year on" Updated 4 March 2020, available
at https://www.gov.uk/government/publications/offshore-wind-sector-deal/offshore-
wind-sector-deal-one-year-on.
− Press release "New plans to make UK world leader in green energy", 6 October 2020,
available at https://www.gov.uk/government/news/new-plans-to-make-uk-world-
leader-in-green-energy.
WT/DS612/1 • G/L/1428

− "Contracts for Difference for Low Carbon Electricity Generation. Consultation on New
Supply Chain Plan Questionnaire", Department for Business, Energy & Indus trial
Strategy, January 2021, available at
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachm
ent_data/file/952198/cfd-supply-chain-plan-questionnaire-consultation-document.pdf.
− "Supply Chain Plan Guidance for projects of 300MW or more applying for a Contract for
Difference", Department for Business, Energy & Industrial Strategy, July 2021, available
at
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachm
ent_data/file/999779/scp-guidance-ar4.pdf.
− "Contract for Difference. Supply Chain Plan. Your Questions and Answers. 28 September
2021" available at https://www.cfdallocationround.uk/sites/default/files/2021-
10/28092021%20CfD%20SCP%20Q%20and%20A.pdf.
− "Policy paper. Contracts for Difference", Department for Business, Energy & Industrial
Strategy, updated 13 Decembe r 2021, available at
https://www.gov.uk/government/publications/contracts-for-difference/contract-for-
difference.
− "Supply Chain Plan Questionnair e. Submission Template. Allocation Round 4" linked to
at https://www.gov.uk/government/publications/contracts-for-difference-cfd-
allocation-round-4-supply-chain-plan-questionnaire-and-guidance and available as a
document at
https://view.officeapps.live.com/op/view.aspx?src=https%3A%2F%2Fassets.publishin
g.service.gov.uk%2Fgovernment%2Fuploads%2Fsystem%2Fuploads%2Fattachment_
data%2Ffile%2F999817%2Fcfd-scp-questionnaire-submission-
template.odt&wdOrigin=BROWSELINK.
− "Supply Chain Plan questionnaire: submission tables" available at
https://view.officeapps.live.com/op/view.aspx?src=https%3A%2F%2Fassets.publishin
g.service.gov.uk%2Fgovernment%2Fuploads%2Fsystem%2Fuploads%2Fattachment_
data%2Ffile%2F999818%2Fcfd-scp-questionnaire-submission-
tables.ods&wdOrigin=BROWSELINK.
− "The Electrici ty Market Reform (General) Regulations 2014 (S.I. 2014/2013)", as
amended, available at https://www.legislation.gov.uk/uksi/2014/2013/contents/made.
− "The Contracts for Difference (Allocation) Regulations (S.I. 2014/2011)", as amended,
available at https://www.legislation.gov.uk/uksi/2014/2011/contents/made.
− "Industrial Strategy. Offshore Wind Sector D eal", HM Government, 2019, available at
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachm
ent_data/file/790950/BEIS_Offshore_Wind_Single_Pages_web_optimised.pdf.
− "Methodology for Measuring the UK content of UK offshore wind farms, for UK
Government, Department of Energy and Climate Change, RenewableUK and The Crown
Estate", BVG Associates, May 2015, available at
https://cdn.ymaws.com/www.renewableuk.com/resource/resmgr/Publications/Guides/
uk_content_methodology.pdf.
− Any other instruments through which the United Kingdom implements and administers
the measure at issue, including letters, circulars or other documents whereby requests
are made, decisions are communicated and/or instructio ns are imparted; whether
between United Kingdom authorities or to individual or groups of companies directly or
indirectly involved in the fourth allocation round of CfD for low carbon energy generation
projects, mainly offshore wind, as described above.
This Request also covers any annexes, appendixes, attachments or schedules to the instruments
listed above, as well as any amendments, supplements, replacements, renewals, extensions,
implementing measures or any other related measures.
WT/DS612/1 • G/L/1428

The measures at issu e described above appear to be inconsistent with the United Kingdom's
obligations under the covered agreements, in particular Article III:4 of the GATT 1994, inasmuch
as, by incentivising applicants to commit to and implement an ambitious percentage of
United Kingdom content in the context of the allocation of CfD, they accord less favourable treatment
to imported goods than to like domestic goods.

The measures relating to the allocation of CfD identified in this Request appear to nullify o r impair
the benefits accruing to the European Union directly or indirectly under the covered agreements.
The European Union reserves the right to address additional measures and claims, including under
other provisions of the covered agreements regarding the above matters during the course of the
consultations.
The European Union looks forward to receiving the United Kingdom's reply to this request and
expresses its readiness to consider a mutually convenient date and place for the consultations.