State intervention in
the economy can significantly influence the development of the renewable energy
(RE) sector. Historically, this role has been fulfilled by state-owned
Enterprises (SOEs), which continue to dominate energy production and
distribution despite privatization processes. Economic theory suggests that
SOEs could drive the green energy transition by implementing RE policies, a
view reinforced by recent government initiatives linking SOEs to
decarbonization efforts. However, the regulatory and economic advantages that
SOEs often enjoy due to their links with the government can endanger
competition and potentially set back the transition process.
Against this backdrop,
this paper examines key WTO law provisions that may apply to the use of state
ownership in economic actors to promote the development of the RE sector. The
objective is to assess whether the existing WTO legal framework may limit or
support the use of SOEs for RE purposes to achieve a green energy transition.
The study suggests that while WTO law does not explicitly prohibit Members from
employing SOEs to promote RE development, significant legal ambiguities persist
regarding their activities as trade-related tools for decarbonization. The
paper concludes with recommendations to enhance clarity and encourage the use
of WTO mechanisms to support innovation and trade-related climate solutions.