Renegotiation of the Energy Charter Treaty: alignment with the Paris Agreement before the 2021 COP and next steps envisaged by the EU

Renegotiation of the Energy Charter Treaty: alignment with the Paris Agreement before the 2021 COP and next steps envisaged by the EU

The European Green Deal sets the goal of achieving carbon neutrality by 2050. Reaching this target – which requires a profound energy transition – is paramount to curbing global warming and preserving our future.

However, the European Union and most Member States are parties to the Energy Charter Treaty (ECT), which could protect EUR 2.15 trillion in investments in fossil fuels by 2050 against public policies aimed at phasing them out.

The treaty undermines any regulatory attempt to change the crashing course of fossil fuel consumption and forces EU citizens to pay for the life insurance of fossil fuel investors. While a ‘modernisation process’ is ongoing, the EU’s call for the alignment of the treaty with the Paris Agreement will most likely fail to achieve unanimity among all parties.

On 12 October 2020, forty-eight Members of the European Parliament (MEPs), Manon Aubry (GUE/NGL), Saskia Bricmont (Verts/ALE), Maria Arena (S&D), Manuel Bompard (GUE/NGL), Jutta Paulus (Verts/ALE), Nikolaj Villumsen (GUE/NGL), Anna Cavazzini (Verts/ALE), Aurore Lalucq (S&D), Anne-Sophie Pelletier (GUE/NGL), Emmanuel Maurel (GUE/NGL), Silvia Modig (GUE/NGL), Leila Chaibi (GUE/NGL), Raphaël Glucksmann (S&D), Miguel Urbán Crespo (GUE/NGL), Philippe Lamberts (Verts/ALE), Pascal Durand (Renew), Ville Niinistö (Verts/ALE), Pernando Barrena Arza (GUE/NGL), Marc Botenga (GUE/NGL), Cornelia Ernst (GUE/NGL), Marie Toussaint (Verts/ALE), Martin Buschmann (NI), Eugenia Rodríguez Palop (GUE/NGL), Claude Gruffat (Verts/ALE), Ernest Urtasun (Verts/ALE), Bas Eickhout (Verts/ALE), Eleonora Evi (NI), Marc Angel (S&D), Milan Brglez (S&D), Alviina Alametsä (Verts/ALE), Tilly Metz (Verts/ALE), Piernicola Pedicini (NI), Younous Omarjee (GUE/NGL), Manu Pineda (GUE/NGL), Sira Rego (GUE/NGL), Manuela Ripa (Verts/ALE), Karima Delli (Verts/ALE), Mounir Satouri (Verts/ALE), David Cormand (Verts/ALE), Jakop G. Dalunde (Verts/ALE), Pär Holmgren (Verts/ALE), Michael Bloss (Verts/ALE), Idoia Villanueva Ruiz (GUE/NGL), Henrike Hahn (Verts/ALE), Petros Kokkalis (GUE/NGL), Konstantinos Arvanitis (GUE/NGL), Clara Ponsatí Obiols (NI) and Antoni Comín i Oliveres (NI), posed a written parliamentary questions to the European Commission.

“Considering that substantial reform is urgently needed”, MEPs asked the Commission ‘does the EU have a deadline for the ongoing modernisation process to prevent it from dragging on?”

“The EU is bound to submitting its enhanced determined contribution to the Paris Agreement at the November 2021 Conference of the Parties (COP) in Glasgow” continued MEPs and enquired ”will it commit to withdrawing from the ECT, as Italy did in 2016 if the modernisation process has failed to align the treaty with the Paris Agreement by then?”

On 02 December, Executive Vice-President Valdis Dombrovskis responded on behalf of the European Commission. He responded that “in line with the negotiating directives received from the Council in July 2019 for modernising the Energy Charter Treaty (ECT), the Commission tabled an initial text proposal in May 2020, aiming at the reform of investment protection and dispute settlement rules, as well as new provisions on sustainable development and climate change” and “one of the objectives of this reform is to align the ECT with the Paris Agreement and the objectives of the Green Deal”.

Executive Vice-President Dombrovskis further explained that “the negotiations for the modernisation of the ECT are at an early stage” and “they started in July 2020 and so far, only three rounds have taken place, the last having taken place in early November 2020” and “the Commission believes that the best possible outcome is to have a reformed ECT”.

“Unilateral withdrawal of the EU and the Member States from an unreformed ECT would trigger the sunset clause, whereby the ECT would continue to apply to existing investments during 20 years” and “this could result in new investor-to-state disputes under the unreformed rules, including in existing investments in fossil fuels” and added that “this is why the Commission is strongly committed to pursue the ongoing modernisation negotiations” reported Executive Vice-President Dombrovskis.

In ending, he declared that “the Commission will continue to review regularly the progress of the negotiations” and “if core EU objectives, including the alignment with the Paris Agreement, are not attained within a reasonable timeframe, the Commission may consider proposing other options, including the withdrawal from the ECT”. Source:

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