EU Challenges Taiwan's Discriminatory Rules on Local Content regarding Offshore Wind Projects MOEA: Exploring Prospects for Opening Up

The EU (26th) has requested dispute settlement consultations at the WTO concerning Taiwan's use of local content criteria for offshore wind energy projects.

The EU is committed to leading the global green transition and, as such, welcomes Taiwan's efforts to support green energy. However, such efforts must respect the global level playing field and comply with international trade rules. In the view of the EU, Taiwan's local content eligibility and award criteria in energy capacity allocation auctions for offshore wind farms are inconsistent with its WTO commitment to not discriminate against imported goods and services.

The WTO-inconsistent local content (localization) requirements in Taiwan's offshore wind policy have a negative impact on a sector of strategic importance to the EU. The EU wind energy sector alone has an annual turnover of 60 billion (2024 figure) and provided around 300,000 jobs in the EU in 2022. Under the REPowerEU targets, the number of jobs is estimated to grow to 936,000 by 2030.

Moreover, in discriminating against non-Taiwanese goods and services, the local content requirements mean efficiency losses and price increases, ultimately making the transition to a secure supply of renewable energy more difficult and costly and therefore hindering global climate ambitions.

The dispute settlement consultations that the EU is requesting are the first step in WTO dispute settlement proceedings. If both parties do not lead to a satisfactory solution within 60 days, the EU can request the WTO to set up a panel to rule on the matter.

The EU is hopeful that, owing to the close and productive relationship between the EU and Taiwan, a mutually-satisfactory solution can be found in the course of the dispute settlement consultations.

The Taiwan Ministry of Economic Affairs (MOEA) issued a formal press release on the evening of the 26th in response, stating that Taiwan's localization policy will be reviewed towards a more open direction.

Taiwan has actively engaged with European counterparts through its diplomatic channels to address concerns regarding the policy. In response to the EU's request for WTO dispute settlement consultations, Taiwan is required to respond within 10 days as per WTO regulations. MOEA, in collaboration with domestic stakeholders including the Executive Yuan's Office of Trade Negotiations, will handle this matter jointly and continue dialogue with the European Union.