Luxembourg’s Minister for Energy and Spatial Planning, Claude Turmes, sent a letter to the European Commission and his counterparts in the other Member States on Friday 5 February, calling on them to be more ambitious with a view to the forthcoming negotiations on the modernisation of the Energy Charter Treaty (ECT).
“The lack of ambition in the definition of economic sectors in the ECT will give more time for investors to claim millions/billions in indemnities for phasing out fossil fuels”, thus jeopardising the EU’s climate goals, he writes.
He added: “No EU countries will be out of that danger”, while referring to the recent decision of the company RWE to attack the Netherlands under the Treaty (see EUROPE 12651/32).
Dating from the 1990s, the ECT has been regularly criticised on the grounds that it would protect the interests of the fossil industries by allowing them to attack the 54 contracting parties (including the EU and all its Member States except Italy) before arbitration courts (see EUROPE 12618/10, 12594/11).
While discussions between the contracting parties to modernise the ECT started in 2020, the Commission and the Council of the EU are currently trying to define the EU position on the revision of the definition of ‘economic activity in the energy sector’ in the Treaty.
In concrete terms, the aim is to define which energy activities should, according to the EU, remain covered by the revised treaty, before 2 March, when the fourth round of negotiations on treaty modernisation begins.
However, the issue divides the EU Council and the Commission, but also the Member States among themselves. Some, such as Luxembourg, France, and Spain, consider the Commission proposal currently on the table too unambitious (see EUROPE 12646/7).
“I am not convinced by the strategy of the Commission to present a weak proposal with the argument that it would already be hardly acceptable for non-EU contracting parties.”, Mr Turmes stressed in his letter.
Moreover, he clearly favours a revision of the Treaty rather than an exit from it. “ Leaving the ECT may only be a last resort option, not a starting point to enter the modernisation negotiation”, writes the Luxembourg minister. According to him, a withdrawal by the EU “would be seen as a major diplomatic failure and a step back in the climate ambition just months before the Glasgow COP26”.
He added: “I also doubt that a full withdrawal would be legally and technically feasible while keeping the EU safe and immune of the sunset clause”.
According to this clause, even if a country withdraws from the treaty, investors can still sue that State for the next 20 years, provided that the lawsuit relates to events that occurred while the country was still a member of the treaty.
See the letter: http://bit.ly/3rLqWVH (Original version in French by Damien Genicot)