On Monday evening, 15 February, the European Commission sent the Energy Charter Treaty (ECT) Secretariat a document presenting the EU’s revised negotiating position in preparation for the next round of negotiations on the modernisation of the ECT with international partners.
Addressing the definition of ‘economic activity in the energy sector’ used in the ECT, this document defines which energy activities should, according to the EU, continue to be covered by the revised treaty.
It complements the EU’s initial proposal to modernise the ECT dated 19 May 2020.
This delivery in extremis—the EU had until 15 February (inclusive) to send its position to the secretariat—comes after difficult discussions between the European Commission and the Council of the EU. Begun at the end of October 2020 with an initial proposal presented to Member States (see EUROPE 12591/17), these discussions had intensified in recent weeks (see EUROPE 12646/7 and 12655/6).
Reduction of the CO2/kWh ceiling
Like the October version, the document sent to the secretariat proposes that the ECT should cease to apply to future investments in fossil fuels and fossil-fuel power generation as soon as the revised ECT enters into force, while providing a longer deadline for certain investments depending on the CO2 intensity of those investments.
Under pressure from certain Member States—such as France, Spain (see EUROPE 12658/6), and Luxembourg (see EUROPE 12655/10)—that are calling for the European Union to be more ambitious, the European Commission finally amended the part of the text relating to CO2 intensity.
The document thus provides that investments in the production of electricity from petroleum gas and other gaseous hydrocarbons through power plants and infrastructure enabling the use of renewable or low-carbon gases and emitting less than 380 grams of fossil CO2 per kWh of electricity will continue to be covered by the treaty until 31 December 2030.
While the European Commission initially suggested a ceiling of 550 grams of fossil CO2 per kWh, certain EU countries would have liked to reduce it even further: Spain and Luxembourg had proposed 100 g, and France and the Netherlands, 250 g.
Apart from this ceiling, the other provisions in the document are in line with the European Commission’s proposal, which was brought to the table last Friday and which we have previously reported on in detail (see EUROPE 12657/1).
The final text thus suggests that the ECT revision cover “low-carbon” hydrogen (as defined in the EU hydrogen strategy), biomass, and biogas.
Having received a mandate from Member States on 15 July 2019 to negotiate on behalf of the EU, the European Commission will defend this document before the other ECT contracting parties from 2 March to 5 March during the fourth round of negotiations on the modernisation of the treaty.
See the document sent to the ECT Secretariat: https://bit.ly/2ZnRFew (Original version in French by Damien Genicot)