Climate Labelling and the WTO: The 2010 EU Ecolabelling Programme as a Test Case Under WTO Law

Abstract

Environmental labelling is increasingly used as an instrument of climate protection. This is underlined, for example, by the EU climate change programme, in which various labelling schemes are employed. Cases in point are the EU’s oft-discussed voluntary ecolabelling scheme, which takes a life-cycle approach, and its mandatory labelling scheme for cars. After the dubious outcome of the multilateral 2009 Copenhagen Climate Conference, the importance of instruments of this type may augment even further.

Both mandatory and voluntary labelling schemes risk contravening WTO law: while mandatory labels restrict market access for non-complying products, labels that are granted under a voluntary scheme are meant to improve the perceived attractiveness of products that are awarded the label; hence, such labels may negatively affect the competitive conditions of other products, possibly disadvantaging imported products.

Labelling schemes according to which information on a product’s environmental impacts over its life-cycle is included in a pertinent label fall into the category of process-based labels. It is well-known to WTO experts that such labelling schemes – in particular those based on ‘non-product-related processes and production methods’ – raise a considerable number of issues under WTO law.

This contribution examines the EU’s voluntary eco-labelling scheme which was revised in 2000 and 2010. Due to its life-cycle approach, which since the scheme’s inception has taken into account e.g. energy consumption during production and use (besides further environmental impacts), this scheme has been intensely debated in trade and academic circles since its first version was introduced in 1992. The new 2010 EU scheme similarly considers the whole life cycle of products, including ‘the most significant environmental impacts, in particular the impact on climate change’. Therefore, and in view of the broad range of issues raised by it, this scheme presents a model test case under WTO law also for other climate-related labelling schemes and ecolabelling schemes more generally.