EU member states agree to withdraw from TCE, the international agreement that protects fossil fuels – Liberation

The Energy Charter Treaty (ECT), an obsolete agreement in the wake of the environmental crisis, should soon be ancient history. This Thursday, March 7, Twenty-Seven approved the EU’s coordinated withdrawal from the agreement that protects investment in fossil fuels. Several countries, including France, had already announced that they wanted to leave.

The Energy Charter Treaty was signed in 1994, at the end of the Cold War, to provide guarantees to investors in Eastern Europe and the countries of the former USSR. Bringing together the EU and around fifty countries, it allows companies to claim compensation from a state whose decisions affect the profitability of their investments, including pro-climate policies, before a private arbitration court.

For example, Italy was ordered to pay around 200 million euros in compensation in 2022 for denying oil company Rockhopper an offshore drilling permit. Similarly, German energy company RWE sought 1.4 billion euros from The Hague, before leaving, to cover losses at thermal power plants affected by Dutch anti-coal regulations.

Multiplication of disputes

Faced with a proliferation of disputes, Europeans first attempted to modernize the text to curb opportunistic claims and gradually exclude relics. In the absence of a quick settlement, around ten EU states decided to withdraw from the treaty at the end of 2022 (France, Spain, Netherlands, Germany, Luxembourg, Poland, etc.). Italy abandoned it in early 2015. EU, United Kingdom announced its withdrawal on 22 February.

In early July, the European Commission proposed that the EU, together with its member states and Euratom (the European Civil Nuclear Organisation), “Coordinated and orderly withdrawal” A treaty decision “Incompatible with European climate ambitions”. Ministers of the Twenty-seven meeting in Brussels, therefore, this Thursday endorsed the proposal, which, according to a European source, had already been approved by the ambassadors of the states. A final green light from MEPs is still required for a definitive exit.

Another proposal adopted jointly, however, leaves the possibility for states that wish to do so to ratify. “Modernization” To remain members of the Treaty and the Revised Treaty at a future conference of the Organization, which was specifically requested by Hungary and Cyprus.

“One of the Worst International Investment Treaties”

Economist Maxime Combs, from the STOP CETA-Mercosur collective, judges the TCE “One of the Worst International Investment Treaties”. The IPCC also describes the ECT as a treaty which “Still focused on promoting the development of fossil fuels, (…) designed to protect the interests of investors in energy projects against national policies”. NGO Can Europe welcomed Twenty-Seven’s decision, saying it was “delighted”. “Derailing Treaty to Protect Polluting Companies” which allows them “Sue Governments for Their Climate Action, Disrupting the Just Energy Transition”.

Green MEP Anna Cavazzini, however, expressed regret “Not all member states have a majority in favor of withdrawal” personally, “Which would have meant greater legal certainty”. Despite everything, countries remain concerned “Survival Clause” of the ECT, which still protects fossil fuel installations covered by the treaty for several years, after the withdrawal of a signatory country.