France to withdraw from Energy Charter Treaty – europeantimes.news

French President Emmanuel Macron announced Friday that France would withdraw from the Energy Charter Treaty (ECT) as incompatible with the climate commitments of EU member states.

In force since 1998, after the fall of the USSR, the treaty, which has more than 50 signatories, including the European Union, allows investors to sue governments for policies that jeopardize their investments. The goal was to promote energy security by encouraging open markets and investment in the new states of the former Soviet bloc.

At the press conference following the European Council in Brussels, the President of the Republic said that this exit from the controversial treaty was “requested by many”.

On October 20, the French High Council for the Climate had published an opinion recommending “a coordinated withdrawal of the ECT by France and the EU” to respect “national, European and international commitments on climate”.

Requested first by other EU member states, the Netherlands, announced on Tuesday (October 19) their exit. Before them, Spain, last week, targeted by at least 51 complaints from investors, as well as Poland several weeks ago. Italy, meanwhile, left the ECT in 2015, at which time it had thirteen lawsuits.

The Netherlands paid the price for the Energy Charter Treaty by announcing its exit from coal by 2030. The German company RWE then filed a complaint, claiming compensation of 1.4 billion euros.

France sued on behalf of the Energy Charter Treaty.

On September 2, the German company Encavis AG, specialized in renewable energies, filed a request for arbitration at the International Center against France in the name of the ECT. The French government has decided to reduce its feed-in tariffs for photovoltaic electricity in 2020.

Cases handled behind closed doors

The trials are not conducted in traditional courts, but in private arbitration tribunals that are often more inclined to give precedence to the economic interests of investors over the general interest.

Survival clause of the Energy Charter Treaty

However, the treaty contains a clause that states that any country that withdraws will remain subject to litigation for 20 years. Unless the EU member states decide to leave the treaty together, and not apply that clause.

Thus, it is under this clause that Italy, which left the ECT in 2016, has just been condemned.last August, to pay the multinational Rockhopper 190 million euros, not counting penalties and legal costs. At issue: a moratorium imposed by the Italian government, which made it impossible to build an oil platform near the coast of the Abruzzo region, following the mobilization of the population.

Europe can act

Faced with this situation, the treaty was in the process of being modernized, with the Commission itself deeming it “obsolete” as it stood. For more than two years, the ECT was renegotiated by the Member States with the stated objective of “modernizing” it so that it would be in line with the climate commitments of the States.

These negotiations were completed last June with a new text that will be examined on November 22, during the annual conference of the treaty’s stakeholders. Countries will have to vote on this modernized version.

Several countries such as Spain, the Netherlands, Poland, Germany and France have recently called for a coordinated exit from the ECT.

“The European Commission’s mandate was to bring the ECT into line with the Paris climate agreement. Despite the many modernizations that are now in the balance of the negotiations, we do not see that the TEC has been sufficiently aligned with the Paris agreement,” Jetten told the Dutch parliament on Tuesday.

If Europe still wants to save the EU’s greenhouse gas emission reduction targets, there is no choice but to reject this new agreement and to plan for a coordinated exit from the ECT with the other EU member states, taking care to deactivate the survival clause.