EU and Taiwan Reach Understanding on WTO Dispute over Taiwan's Offshore Wind Auctions

The EU and Taiwan have reached an understanding on the WTO dispute over Taiwan's offshore wind auctions on July 26th of this year (2024) regarding Taiwan's localization measures for offshore wind power. Following several rounds of constructive consultations, both sides reached a consensus, and the EU has agreed to suspend the WTO dispute resolution process.

Offshore wind power is crucial to Taiwan's economic and energy security policy and is instrumental in achieving the "2050 Net-Zero Emissions" target. The international offshore wind market has undergone significant fluctuations in recent years, presenting challenges for industry players executing their Industrial Relevance Plans (IRPs) within development projects.

To ensure a stable supply of green electricity, Taiwan has agreed to assist developers in addressing challenges encountered in executing their IRPs while maintaining the target of on-schedule grid connection for offshore wind projects. Application applications will appropriately show flexibility in amending Phase 3.2 IRP projects. Mandatory IRP requirements will no longer be included in the developer selection rules for future offshore wind development projects. The EU has recognized Taiwan's sincere efforts to assist developers, and a consensus has been reached.

Minister of Economic Affairs Jyh-Huei Kuo communicated Taiwan's policy commitments in a letter to Sabine Weyand, Director-General for Trade at the European Commission, on November 5th. Weyand responded on November 7th, expressing appreciation for Taiwan’s efforts to address the challenges offshore wind developers face effectively. With Taiwan's fulfillment of relevant commitments, the EU stated that it would not need to pursue the matter further within the WTO.

The EU is Taiwan's fourth-largest trading partner and its leading source of foreign investment, reflecting shared values and close ties. Since Taiwan's government initiated offshore wind development plans, EU developers have shown significant support and active participation, significantly contributing to the success of related projects.

Through these consultations, Taiwan has committed to effectively resolving the EU's longstanding concerns regarding IRP implementation. This commitment demonstrates the EU’s continued support for Taiwan's offshore wind development plans and ensures the stable supply of green electricity for Taiwan’s long-term goals. The outcome of these consultations represents a win-win for both Taiwan and the EU. The Taiwanese government will continue to guide the domestic supply chain, fostering international competitiveness and expanding the regional offshore wind market.

In addition, the statement released on the European Commission's official website pointed out that another important achievement of this negotiation is Taiwan’s commitment to no longer include localization requirements in future allocation rounds, either as eligibility conditions or as award criteria.