Trade and investment policy, climate policy

Expensive to buy: How the Energy Charter Treaty drove up the costs of Germany's lignite phase-out

The Energy Charter Treaty has made it more difficult and more expensive for Germany to phase out coal. This is the result of a briefing that PowerShift is publishing today together with eight other civil society organisations and which is based on newly published documents from the Federal Ministry for Economic Affairs and Energy (BMWi). To ensure that the new German government is not prevented from implementing ambitious climate targets, the organisations are calling for Germany to withdraw from the Energy Charter Treaty.

In an internal e-mail sent to the organizations There is a request for freedom of information, On 31 October 2019, the Federal Ministry for Economic Affairs and Energy admitted before the Federal Chancellery that it expects lawsuits under the Energy Charter Treaty in the event of a regulatory phase-out of coal. The BMWi expressly warned against the "time-consuming and costly" arbitration proceedings in the letter.

For this reason, too, the German government negotiated a contract with the lignite companies, which grants them extremely high compensation and particularly advantageous conditions for the coal phase-out. Thus, the risks and uncertainties of the lignite phase-out were regulated unilaterally to the detriment of the public. At the same time, the lignite operators RWE and LEAG receive compensation in the amount of 4.35 billion euros, which Evaluate independent experts as unreasonably high. Due to doubts about the compatibility with EU state aid law, the EU Commission has Proceedings initiated. Meanwhile, the German government has admitted that the lignite operators' renunciation of lawsuits under the Energy Charter Treaty has increased the compensation.

A frequently cited argument for remaining in the Energy Charter Treaty is the sunset clause, which allows lawsuits even twenty years after an exit. International legal experts have recently pointed out, How it can be defused.

The briefing is published by PowerShift, attac Deutschland, ClientEarth, Europe beyond Coal, Forum Umwelt und Entwicklung, NaturFreunde Deutschlands, Netzwerk Gerechter Welthandel, Umweltinstitut München and Urgewald.

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