Civil society organisations call for withdrawal
Press release by Attac, Forum Environment and Development, Naturefriends of Germany, PowerShift, Umweltinstitut München, Urgewald
Reform of the Energy Charter Treaty failed: Civil society organisations call for withdrawal
Berlin, 24.06.2022: In Brussels today, the reform negotiations on the Energy Charter Treaty (ECT) have come to an end. The result falls well short of the goals of the German government and the EU. Civil society organisations are therefore demanding that Germany and other EU member states now decide to withdraw from the ECT, for which Spain, Belgium and the Dutch Parliament have also been campaigning in recent days.
The ECT will continue to protect investments in fossil fuels in the EU until at least 2033, posing a serious obstacle to accelerating the energy transition. Outside the EU and the UK, there should be no restrictions on investment protection in fossil fuels. Thus, the EU and the German government have not achieved their goal of making the treaty compatible with the Paris climate agreement and the European Green Deal.
“The war in Ukraine and the escalating climate crisis dramatically demonstrate the serious consequences of dependence on fossil fuels. It is precisely in these times that democratically elected governments must have the freedom of action to implement a swift and socially just energy transition and to secure energy supply. But this is precisely what is hindering the Energy Charter Treaty”, comments Ludwig Essig from the Munich Environmental Institute and the Coordination Network for Fair World Trade.
Of the five requirements for ECT reform published yesterday by traffic light parties, four are not met. The reformed Energy Charter Treaty will continue to protect fossil-fuel investments and climate action will not in principle be exempted from investor lawsuits. Changes to the investment protection standards required by the traffic light and the shortening of the retention clause could not be achieved.
“The reform of the Energy Charter Treaty cannot meet the requirements of the traffic lights. Lawsuits against climate protection remain possible even after the reform. The only consequence can be Germany's withdrawal from the contract, otherwise the traffic light will become unreliable", says Fabian Flues, trade expert at PowerShift.
In the reformed ECT, private business lawyers are also involved in controversial investor-state arbitration proceedings (ISDS: Investor-State Dispute Settlement) can decide whether states have to pay high compensation to investors. With the support of the SPD and the Greens, the European Commission had promised not to conclude any more agreements with ISDS.
“These private arbitral tribunals no longer have a future, as promised by governing parties and the European Commission”, says Hanni Gramann of Attac. “This promise is now being broken. Three business lawyers should also be allowed to decide in the future whether fossil investors contain billions in compensation for state measures to protect the climate. That alone is reason enough to withdraw from the ECT.”
RWE and Uniper are currently suing the Dutch government for approximately €2.4 billion in compensation for the coal phase-out by 2030.
“In particular, Uniper had already threatened an ISDS arbitration procedure on the basis of the ECT before the adoption of the Dutch Coal phase-out Act, thus preventing far-reaching measures. This shows that the ECT is a very sharp sword in the hands of those who want to prevent effective climate protection laws", says Sonja Meister von urgewald.
“The Energy Charter Treaty is a relic from the Stone Age. If the Federal Government wants to accelerate the expansion of renewable energies and a comprehensive energy transition, the Federal Government must campaign for the dissolution of the Energy Charter Treaty and for Germany to withdraw from the Energy Charter Treaty", says Uwe Hiksch of NatureFriends of Germany.
An additional threat is posed by the planned extension of the ECT to new energy sources and technologies. In the future, investors in hydrogen, biomass, synthetic fuels and CO2 capture and storage will also be able to sue under the ECT. This increases the risk for states to be sued under the reformed Energy Charter Treaty.
Last Tuesday, five young people affected by climate change filed a lawsuit with the European Court of Human Rights against twelve European governments (including Germany) over the ECT. The treaty is incompatible with international climate commitments and violates the European Convention on Human Rights.
background:
The ECT is an international trade and investment agreement that entered into force in 1998 and now has over 50 member states in Europe and Asia. The aim of the ECT was to open up the oil and gas reserves of the former Eastern bloc to the investments of Western European companies. The modernisation of the ECT has been under negotiation in Brussels since April 2020. Spain was the first country to call for a joint withdrawal from the ECT on Wednesday.
An exit from the Energy Charter Treaty is subject to a 20-year continuation clause for existing investments. However, if many member states leave together, this could be defused.
Press contacts:
Ludwig Essig, Munich Environmental Institute: +49 176 546 752 53, le@umweltinstitut.org
Fabian Flues, PowerShift e.V.: +49 159 0611 3733, fabian.flues@power-shift.de
Hanni Gramann, Attac Germany: +49 176 30608762,
hanni.gramann@attac.de
Sonja Meister, urgewald: +49 176 64608515, sonja.meister@urgewald.org
Uwe Hiksch, Naturefriends Germany, +49 176 620 159 02, hiksch@naturfreunde.de
(c) Photo by Jörg Farys
