The World Trade Organization said on Wednesday it will rule on a Japanese claim that a Canadian province’s renewable energy programme flouts international trade law.
“A panel was established,” a spokesperson from the world trade body said, referring to a team of arbitrators.
At the heart of the dispute is the government of Ontario’s “feed in tariff” (FIT) programme, which guarantees electricity prices from renewable energy facilities.
According to the Power Authority of Ontario website, to benefit from the programme, wind projects greater than 10 kilowatts and all solar projects must include a minimum amount of goods and services that originate from the province.
Japan claims that such support is a form of subsidy which discriminates against foreign producers, thereby violating WTO regulations, to which Canada is a party.
“Japan considers that the measures at issue are inconsistent with Canada’s (WTO) obligations,” the Japanese mission to the WTO said in a statement.
Canada rejected the charge.
“Feed-in-tariffs have been used by several WTO Members to encourage the use and development of renewable sources of energy,” the Canadian mission to the WTO said in a statement, but without giving any examples.
“Ontario’s feed-in tariff is no different,” it added.
The panel’s decision, which can be appealed, is expected within the next six months.
Japan has many companies in the solar energy sector, including Sharp, Kyocera, Sanyo and Mitsubishi Electric, as well as major suppliers of components and wind systems.