On Thursday 23 June, on the eve of a meeting of ECT signatories to conclude the revision process of this international treaty, the European Parliament called on the European Commission and Member States to prepare for a coordinated exit from the Energy Charter Treaty (ECT).
Launched in 2018, this process aims to modernise the ECT, which has been in force since 1998, to bring it more in line with today’s economic and energy reality.
The treaty has been widely criticised for hindering the energy transition by providing legal protection for fossil fuel investments through private arbitration tribunals (see EUROPE 12618/10).
While the Parliament welcomes the Commission’s efforts to exclude protection from most fossil fuel investments (see EUROPE 12659/16), it criticises the timetable for phasing out such protection proposed by the institution to the other ECT contracting parties as too long in view of the EU’s climate objectives.
The resolution adopted in plenary (see other news) is also critical that many contracting parties “do not seem to share the EU’s ambitions in the field of climate change mitigation, sustainable development and energy transition”, while highlighting the fact that amending the treaty requires the unanimity of all parties.
Therefore, in view of the high risk that the ECT modernisation process will not lead to a sufficiently ambitious outcome, MEPs call on the Commission and Member States to start preparing a coordinated exit from the Treaty, as well as to conclude an agreement with willing contracting parties that excludes the application of the ‘sunset’ clause.
This clause allows investors to sue a state for 20 years after its withdrawal from the ECT for investments made before the date of exit from the Treaty.
See the resolution: https://aeur.eu/f/2a7 (Original version in French by Damien Genicot)