A ruling by the EU Court of Justice on 2 September 2021 in Case C-741/19 Republic of Moldova v Komstroy provided a long awaited and much needed clarification that the investor-state dispute settlement (ISDS) provision in the Energy Charter Treaty (ECT) is not applicable in intra-EU disputes. But this judgment may not stop EU investors and companies from pursuing billions in ‘compensation’ before arbitral tribunals for legitimate regulatory changes, like coal phase-outs, that are urgently needed to meet EU climate targets.
71 MEP called the EU to leave the Energy Charter Treaty after 4 unsuccessfull negotiation rounds, a proposal from the European Commission that falls short for what is needed to stay in line with the Paris Agreement, and a risk of prolonging those discussions without satisfactory results.
Answering a question in the French Assembly, Barbara Pompili, French minister for the Ecological Transition, reaffirmed the ambition of a collective withdrawal of the Energy Charter Treaty, with the possibility to neutralize the survival clause with an agreement at the EU level.
The IPCC member François Gemenne publishes an op-ed in Le Soir in Belgium, asking the EU to leave the ECT by COP26.
Bernd Lange, S&D MEP and Chairman of the International Trade Committee, said : "It is high time that Germany once again sides with progressive countries like Spain or France. These countries demand an honest assessment of the possibilities for reform and withdrawal if reform is not possible. We should seek a common agreement with all countries that want to withdraw to no longer allow trials between them".
The German Company RWE has filed a lawsuit against the Netherlands, seeking compensation for over 1.4 billion €. This follows the Dutch 'coal-law' from 2019 and the decision to phase-out electricity production from coal by 2030. The company invokes the Energy Charter Treaty.
Citizen's mobilization is growing: a petition asking the EU to pull out from the ECT collected over 1 million signatures in just a few weeks.
The independent journalist group Investigate Europe has revealed how the Energy Charter Treaty is undermining the achievement of climate goals and the energy transition as a whole. The fossil fuel infrastructure protected by the ECT in the European Union, the UK and Switzerland amounts to €344.6 billion, more than twice the EU's total annual budget. And three quarters of the protected investment is in gas and oil, and pipelines.
Pascal Canfin, Renew MEP and Chair of the European Parliament's Environment Committee and Anna Cavazzini, Green MEP and Chair of the European Parliament's Internal Market and Consumer Protection Committee wrote: "We call on the EU negotiators to present different scenarios for exiting this treaty. The attempt to modernise may only delay the inevitable, namely that the EU as a whole would have to exit in order to be consistent with its climate goals."
Teresa Ribera, Minister for the Ecological Transition of Spain, took a bold move by asking to make the Energy Charter Treaty compatible with the Paris Agreement, or for the EU to collectively withdraw. A letter to the Commission followed this declaration later in February.
A few days later, the French Minister for the Ecological Transition Barbara Pompili, alongside the Minister of the Economy and Finance, Bruno Le Maire, the State Secretary for European Affairs Clément Beaune, and the Minister Delegate for Foreign Trade Franck Riester, joined their voices in a letter addressed to the European Commission, asking to either modernize the ECT by making it compatible with the Paris Agreement, or to withdraw in a coordinated manner. This letter has been published in the media in January 2021.
Ahead of the Energy Charter Conference, Dr. Yamina Saheb, a senior climate and energy policy analyst at OpenExp, a Paris-based think tank, and a former head of the Energy Efficiency Unit at the Energy Charter Secretariat, calls on to EU leaders to be up to the task and to work on the collective withdrawal of the Energy Charter Treaty.
Today, more than 200 climate leaders and scientists signed an open letter calling governments to withdraw from the Energy Charter Treaty (ECT), which protects foreign investments in fossil fuels and obstructs the transition to clean energy.
For the first time ever, the Commission publicly stated that withdrawal from the ECT is an option, if the reform fails.
This means consensus is gaining and we need to strengthen these voices by building public pressure from the outside.
In October 2020, the European Parliament adopted an amendment in the European climate law which states "The Union shall end protection of investments in fossil fuels in the context of the modernisation of the Energy Charter Treaty..."