After more than three years of negotiating in an attempt to modernize the Energy Charter Treaty (ECT) – this international agreement, in force since 1998, protects investors from changes in the energy policies of States – the Europeans have decided to stop everything. For now at least.
The Commission, which negotiates on behalf of the Twenty-Seven, had nevertheless given its agreement in principle, on June 24, to a reform project which it had negotiated at length with the other States participating in the ECT. In the process, it was expected that the 53 signatories of the text – the European Union (EU) and its Member States (with the exception of Italy), but also Japan, Turkey, Ukraine, Georgia or Kazakhstan – formally vote on November 22, a ballot for which unanimity is required.
“Member States were unable to agree on the modernization of the ECT, so we will ask on Tuesday that this item be removed from the meeting” , explained, Monday, November 21, a spokesperson for the Commission. On Friday November 18, France, Spain, the Netherlands and Germany refused to give the Community executive the mandate that would have allowed it to vote on Tuesday. “It is a political snub for the CommissionJudge Pascal Canfin, President of the Environment Committee of the European Parliament. She did not understand that the opposition to the reform of the ECT was strong. »
Incompatible with the desired rate of decarbonization
From the European point of view, the TCE, imagined after the collapse of the Soviet empire and the Gulf War, aimed to secure the energy supply of the Old Continent. It allows investors in this sector to request, before a private arbitration tribunal, compensation from a State that reorients its energy policy and thus affects the profitability of their investments.
Today, it constitutes a brake on the ambitions of countries that want to fight against global warming and is not compatible with the rate of decarbonization of the economy required by the Paris agreement, as judged, in France, the High Council for the Climate on October 19. Fossil energy players can indeed have recourse to it as soon as their interests are harmed by a new law. Thus, after The Hague’s decision to ban coal by 2030, the German energy company RWE demanded 1.4 billion euros from it to compensate for its losses on a thermal power station.
Proponents of the ECT argue that the treaty is also about the renewables sector. Moreover, on September 2, France saw itself prosecuted by the German company Encavis, a producer of renewable energy, and three of its subsidiaries, after reviewing lowering the purchase prices of photovoltaic electricity in 2020. Its detractors retort that its main consequence is to alter the sovereignty of the signatory countries of the TCE in terms of energy policy. “It is a treaty which allows investors in States governed by the rule of law to exempt themselves from common law”slice Pascal Canfin.
You have 41.61% of this article left to read. The following is for subscribers only.