Brussels (Brussels Morning) – MEPs endorse EU’s exit from Energy Charter Treaty, citing climate concerns and fossil fuel conflicts. The move aims to align with ambitious climate goals and foster renewable energy investments.
Today, a panel of MEPs from the Industry, Research, Energy and International Trade committees has endorsed the European Parliament’s permission to an EU exit from the Energy Charter Treaty (ECT). The proposal was adopted with 58 votes acceptance 8 against, with 2 abstentions. Parliament will have a vote during its 22-25 April session in Strasbourg.
According to EURACTIv, If Parliament approves, the Council will be able to embrace the decision by a qualified majority. The Energy Charter Treaty (ECT), founded in 1994 to manage trade and investment in the energy sector, has evolved as a focal point for controversy.
How Did MEPs React to the Treaty?
Member for the Trade Committee MEP Anna Cavanzzini stated: “Today’s vote is a major effort in the right direction. The EU is finally retiring from the climate-hostile Energy Charter Treaty. Given the climate crisis, the EU must become a climate-neutral continent as quickly as possible. Now the fossil dinosaur treaty finally no longer stands in the way of consistent climate protection, as we no longer have to fear corporate lawsuits for billions of euros in compensation before private arbitration tribunals”.
Moreover, MEP Mar Botenga said: “The Energy Charter Treaty permits fossil fuel multinationals to sue states and the European Union if climate policies impact their profits. Amid a climate crisis, this is a paradox, in addition to being very costly for taxpayers. With civil society, a significant movement has been built to exit this treaty. I am pleased to see this mobilization bearing fruit today. It is now necessary to accelerate public investments in renewables.”
How Does the Energy Charter Treaty Operate?
There are presently 56 signatories and contracting parties to the Energy Charter Treaty (ECT), including both the EU and Euratom. The treaty supplies a multilateral framework for energy cooperation among the signatories. It was developed to promote energy security through the operation of more genuine and competitive energy markets while appreciating the principles of sustainable growth and sovereignty over energy resources. It also launched the Energy Charter Conference, an inter-governmental organisation which meets regularly to discuss issues affecting energy cooperation.
What Challenges Does Outdated ECT Pose?
In the lack of any substantial update of the ECT since the 1990s, it has evolved increasingly obsolete and no longer fits the climate ambition at the EU and international level. The EU has been at the vanguard of efforts to address this situation and a modernisation process was initiated in November 2018.
In January 2021, EU leaders sent a powerful political message in the Council conclusions on climate and energy diplomacy, saying that “EU energy diplomacy will prevent all further investments into fossil fuel-based energy infrastructure schemes unless they are fully consistent with an ambitious, apparently defined pathway towards climate objectivity in line with the long-term objectives of the Paris Agreement and best available science”.
The Commission now suggests a coordinated pullback by the Union and its Member States, as it considers the Treaty to be no longer consistent with the EU’s climate goals under the European Green Deal and the Paris Agreement, predominantly due to concerns over continued fossil fuel investments.
