According to information gathered by EUROPE, the European Commission informed the national delegations of the Member States that it does not intend to revise its proposal for a revision of the Energy Charter Treaty (ECT) on Tuesday 19 January, at a meeting of the EU Council’s Energy Working Group.
Dated 26 October, the Commission’s proposal concerns the definition of ‘economic activity in the energy sector’ in the Treaty (see EUROPE 12591/17).
Concretely, it aims to complement the institution’s initial proposal to modernise the Treaty (transmitted to the ECT Secretariat in May 2020) by determining which investments in the energy sector will be covered by the revised ECT, in particular its chapter allowing investors to sue a State signatory to the Treaty before a private arbitration tribunal via the investor-state dispute settlement (ISDS).
At the request of the Portuguese Presidency of the Council, Tuesday’s meeting of the ‘Energy’ working group was held in order to allow delegations to comment on the Commission’s proposal on the basis of a new document dated 18 January.
Obtained by EUROPE, it takes up the Commission’s proposal and includes suggestions for modifications expressed by some Member States who wish to strengthen the text in order to ensure a real alignment of the ECT with the EU’s climate objectives.
However, the institution reportedly stated that it does not intend to amend its 26 October document, according to one source. Furthermore, the EU Council’s Legal Service cut short the discussions by telling delegations that they have only an advisory role here, as Member States have already given a mandate to the Commission to negotiate on behalf of the EU with non-Member States that are signatories to the ECT.
The Member States do not have the power to revoke the Commission’s October proposal via a vote, nor to amend it without the institution’s agreement.
“The Commission is in an impossible position, because some Member States say we should withdraw from the Treaty unless it is amended, while others fully support the Commission’s text or consider it already too ambitious”, one source summarised.
According to her, the EU Council is thus divided into three groups: - countries that find the text of 26 October satisfactory or even too ambitious, such as Poland, Hungary, Slovakia and the Czech Republic; - those who have not yet expressed a clear position (the largest group), including Germany; - those who, like France, Spain, Austria and Luxembourg, wish to revise the text.
Proposals for changes
More specifically, this third group of countries proposes to modify the exceptions provided for by the Commission.
In its October paper, the Commission proposes not to apply the provisions of the Treaty to future investment in fossil fuels and fossil-fuel-based electricity generation, although it does include exceptions.
It thus suggests that investments related to the production of electricity from oil gas and other gaseous hydrocarbons by means of power plants and infrastructure allowing the use of renewable or low-carbon gases and emitting less than 550 g of fossil CO2 per kW/h of electricity should still be covered by the Treaty until 31 December 2030.
However, the document dated 18 January states that Austria and Luxembourg wish to bring this date forward to 31 December 2025. On the matter of the ceiling: - Spain and Luxembourg are calling for it to be set at 100 g of fossil CO2 per kW/h from electricity; - France and the Netherlands at 250 g; - Austria at 380 g.
According to the Commission, the deadline should also be extended to 31 December 2040 in two cases: - if these investments replace investments in coal and petrol-fired power generation; - for future investments in gas pipelines capable of transporting renewable and low-carbon gases as well as hydrogen.
As regards the first case, Austria and Luxembourg plead for 31 December 2030, the document states.
Finally, the last point concerns investments in fossil fuels existing before the entry into force of the Treaty revision. While the Commission suggests that they continue to be covered by the ECT ten years after the date of entry into force of the revision, Austria, Spain and Luxembourg wish to shorten this period to 5 years. (Original version in French by Damien Genicot)