The European Union will on Tuesday de facto block the adoption of a draft reform of the Energy Charter, an international treaty deemed too protective of fossil fuel investments, due to a lack of agreement among European countries, Brussels said on Monday. Compromise forupgradeThe three-decade-old treaty was drafted in June but had to be approved by a formal unanimous vote of the nearly 50 signatory countries at a conference in Ulaanbaatar, Mongolia, on November 22.
However, several EU member states (France, Spain, the Netherlands, Luxembourg and even Germany) have announced their decision to withdraw from the agreement in recent weeks, considering the compromise on the table to be too insufficient to meet the climate challenges. Italy withdrew from it in 2015. During the meeting held on FridayMember States have not been able to agree on the modernization of the Energy Charter Treaty (ECT), so we will demand that this item be removed from Tuesday’s meeting.“, as a result of which the vote was postponed, announced the spokeswoman of the European Commission, Miriam García Ferrer.
According to a diplomatic source, France, Spain, the Netherlands and Germany abstained on Friday on the mandate to be given to the European executive. The TCE was signed in 1994 at the end of the Cold War to offer guarantees to investors in Eastern Europe and the former Soviet Union. Bringing together the EU and some fifty countries, it allows companies to seek compensation before a private arbitration tribunal from a state whose decisions and regulations affect the profitability of their investments, even when it comes to climate policy.
A symbolic case. German energy company RWE is demanding 1.4 billion euros from The Hague to compensate for damages to the thermal power plant after the Dutch law banning coal by 2030. In addition, in September, Italy was ordered to pay 180 million euros in compensation to the British Rockhopper oil company. States wishing to withdraw from the treaty continue to bear their obligations, subject to “survival clause» for 20 years, after the withdrawal of the signatory country, protecting investments covered by the ECT.
Therefore, the Commission urged them to approve the modernization project, even if it means withdrawing afterwards “survival clauseapplying to the amended contract. The proposed reform aims to preventopportunistic demandsand exclude already-started investments in fossil fuels after 10 years of the contract, as well as reduce the survival clause. “We have to discuss the next steps with the member statesMiriam García Ferrer said.
Source: Le Figaro
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