Belgium, (Brussels Morning Newspaper) More EU member states are exiting the Energy Charter Treaty (ECT) to avoid lawsuits from energy companies over the green push.
The ECT, signed in 1994, allows energy companies to sue governments whose policies threaten their investments in fossil fuels, according to DW reporting on Wednesday.
Italy pulled out from the ECT in 2016, Poland and Spain withdrew in recent months and France and the Netherlands announced plans to leave the treaty earlier this month, stressing that the agreement clashes with the green push.
French President Emmanuel Macron noted last week that “the war on European soil should not make us forget our climate requirements and our imperative to reduce CO2 emissions.”
He stressed that France’s plan to withdraw from the treaty is part of its strategy to achieve environmental goals.
Rob Jetten, Dutch Minister for Climate and Energy Policy, criticised the European Commission last week for failing to reform the ECT, stressing that the EC’s changes did not prevent companies from pushing against energy transition plans.
Speaking in the Dutch parliament, he pointed out that “despite many of the modernizations that are now in the negotiation outcome, we do not see how the ECT has been sufficiently aligned with the Paris Agreement.”
More departures expected
According to analysts, more signatories could pull out in the coming period.
Large energy companies have sued EU member states in recent years for their plans to phase out fossil fuels as part of the energy transition.
German power utilities RWE and Uniper sued the Netherlands last year over the country’s plan to phase out coal by 2030, and Canadian oil and gas company Vermilion Energy threatened to launch an ECT dispute against France in 2017.
Paris then reversed its decision to impose a ban on oil exploration, which gave rise to fears that governments’ hands were tied when it comes to planned emission cuts.
UK-based oil and gas company Rockhopper Exploration sued Italy over its ban on Adriatic oil drilling in 2017, after the country withdrew from the ECT. The company won the lawsuit earlier this year, with Italy forced to pay 225 million euro for lost profit.
Robert Habeck, German Minister for Economic Affairs and Climate Action, previously criticised the ECT over the treaty’s potential to curb the green push.