The European Union freezes the reform of the Energy Charter, a controversial international treaty

Several Member States of the European Union, starting with France, have announced in recent weeks their decision to withdraw from this treaty.

The European Union will de facto block on Tuesday the adoption of a project to reform the Energy Charter, an international treaty deemed too protective of investments in fossil fuels, for lack of agreement among European states, announced Brussels Monday. A compromise formodernizeThis three-decade-old treaty was drafted in June, but had to be confirmed by a formal unanimous vote of some 50 signatory countries at a conference on Nov. 22 in Ulaanbaatar, Mongolia.

However, several EU Member States (France, Spain, the Netherlands, Luxembourg and even Germany) have announced in recent weeks their decision to withdraw from the treaty, judging the compromise on the table to be very insufficient to meet climate challenges. . Italy had withdrawn from it in 2015. During a meeting on Friday, “Member States have not been able to agree on the modernization of the Energy Charter Treaty (ECT), so we will request that this item be removed from the meeting on Tuesday“, resulting in a postponement of the vote, announced Miriam Garcia Ferrer, a spokesperson for the European Commission.

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 the countries of Eastern Europe and the former USSR. Bringing together the EU and around fifty countries, it allows companies to claim, before a private arbitration tribunal, compensation from a State whose decisions and regulations affect the profitability of their investments – even when it is is about pro-climate policies.

Emblematic case: after the adoption of a Dutch law banning coal by 2030, the German energy company RWE is claiming 1.4 billion euros from The Hague to compensate for its losses on a thermal power station. In addition, in September, Italy was ordered to pay compensation of 180 million euros to the British oil company Rockhopper. States wishing to withdraw from the treaty continue to be subject to its obligations, due to a “survival clause» protecting for 20 years, after the withdrawal of a signatory country, the investments covered by the ECT.

The Commission therefore urged them to approve the modernization project, even if it meant withdrawing afterwards with a “survival clauseapplying to the amended treaty. The proposed reform aims to preventopportunistic claimsand to exclude from the scope of the treaty, after a transition of 10 years, the investments already launched in fossil fuels as well as to reduce the survival clause. “On next steps we need to discuss with Member States“said Miriam Garcia Ferrer.

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