France withdraws from the Energy Charter Treaty, Emmanuel Macron announces in Brussels

President Emmanuel Macron announced on Friday 21 October, at the end of the European summit in Brussels, the withdrawal of France from the Energy Charter Treaty, ratified in 1994. “At the moment we live in, we should rather accelerate and focus our investments on: going faster on renewables, going faster on energy efficiency, going faster on nuclear power”, the Head of State explained. This withdrawal comes the day after the publication of an opinion from the Higher Climate Council calling on the government to withdraw from this treaty. This convention, much criticized by climate activists, aimed to secure the supply of fossil fuels to Western Europe. France Bleu explains what this little-known treaty consists of and why it is reported by environmental protection associations and NGOs.

What is this treaty about?

The Energy Charter Treaty (ECT) was signed in 1994, at the end of the Cold War, to provide guarantees to investors in Eastern European countries and the former Soviet Union. This agreement aimed to secure the supply of fossil fuels to Western Europe. Bringing together the European Union and 52 countries (from Europe, Central Asia, but also Turkey and Australia), it allows companies to seek compensation from a state before a private arbitral tribunal. whose decisions influence the return on your investmentseven when it comes to climate-friendly policies. There are 146 known disputes related to ECTfor two thirds intra-European, and the compensation granted exceeds 42 billion euros, according to Yamina Saheb, economist collaborating with the IPCC report (United Nations climate experts).

One of the most emblematic cases occurred in the Netherlands. After the adoption of a Dutch law banning coal by 2030, the German energy company RWE claimed 1.4 billion euros in the Hague to compensate for the losses of a thermoelectric power plant. In September, Italy was sentenced to pay 180 million euros to the British oil company Rockhopper for refusing its offshore drilling permit. German company Encavis AG has also filed legal actions against France following the change in tariffs for the purchase of photovoltaic electricity in 2020.

The oil or coal giants are increasingly resorting to this type of arbitration to recover their investments and seek compensation for lost earnings, as states reduce the share of fossil fuels in their energy mix, the song points out. “From several recent cases it appears that this Charter and the treaty that follows from it have led to rather speculative mechanisms and significant compensation for some actors.explained in particular Emmanuel Macron.

Why is it criticized by environmental associations?

“France has decided to withdraw from the Energy Charter Treaty, which was an important point requested by many”, said the head of state on the sidelines of a European summit in Brussels. Indeed, this treaty is judged by several authorities such as too protective of fossil fuels and inconsistent the Paris Agreement
whose goal is to limit global warming to a level well below two degrees. In an opinion issued on Wednesday, the High Council for Climate (HCC), a French advisory body, found that this text undermined the commitment of the signatory countries. “on a trajectory of decarbonisation of the respective energy sectors by 2030 and up to the ambition of the Paris Agreement”. For environmental NGOs, it also obliges states to spend public money to compensate fossil fuel companies instead of financing renewable energy. On franceinfo this Friday morning
Pascal Canfin, Renew MEP and chair of the Environment Committee of the European Parliament, denounced this treaty and judged “It is unbearable that the multinationals of fossil fuels attack states that implement climate policies required by all citizens and that are absolutely obvious given the impacts we have seen also this summer”.

Faced with the proliferation of litigation, Europeans have worked since 2020 to “modernize“le texte. L’UE avait obtenu en juin que soit réformé ce Traité sur la Charte de l’énergie (TCE) ma le compromis était jugé insuffisant par les NGOs, qui ont alors demandé aux Européens de s’en retirer. , of which the newspaper L’Humanité,
they also posted on their site this Thursday, a “Letter to government members approved by civil society organizations “ signed by many associations and NGOs. This letter specifically asked France to withdraw from the treaty.

Is France the only country to leave the treaty?

France is not the only country to have made the decision to abandon this convention. The Netherlands already announced Wednesday that they will withdraw from the treaty, as did Spain. Poland has also initiated a parliamentary procedure to abandon it. Russia had already withdrawn from the treaty in 2009, followed by Italy in 2016. In its view, the HCC calls for a broader withdrawal: “The coordinated withdrawal of the ECT by France and the EU Member States appears to be the least risky option to enable the achievement of climate targets and compliance with the necessary decarbonisation rates by 2030”.

There remains the thorny question of “survival clause” TCE to be protected another 20 yearsafter the withdrawal of a signatory country, the fossil fuel plants covered by the treaty.

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