Berlin, 4 November. The Energy Charter Treaty has made the German coal phase-out more difficult and more expensive. This conclusion is reached by briefing, which 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 federal 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 on a request for freedom of information, On 31 October 2019, the Federal Ministry for Economic Affairs and Energy already admitted to the Federal Chancellery that it expects lawsuits under the Energy Charter Treaty in the event of a regulatory coal phase-out. In the letter, the Federal Ministry for Economic Affairs and Energy expressly warned against the ‘time-consuming and costly’ arbitration proceedings.
For this reason too, the Federal 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 unilaterally regulated at the expense of the public. At the same time, the lignite operators RWE and LEAG receive compensation in the amount of 4.35 billion euros, which Appreciate independent experts as unreasonably high. Due to doubts about the compatibility with EU state aid law, the EU Commission has Examination procedure initiated. Meanwhile, the federal government has admitted that the lignite operators' renunciation of lawsuits under the Energy Charter Treaty has increased the compensation.
Fabian Flues, trade expert at PowerShift, said: “The Energy Charter Treaty has placed high hurdles on the German coal phase-out. It has been instrumental in ensuring that lignite companies have received disproportionate compensation and extremely favourable conditions for phasing out coal. Ultimately, the climate and public budgets are the ones that suffer.”
In one Letter sent this week to the Federal Ministry for Economic Affairs and the coalition negotiators, civil society organisations called for a rapid withdrawal from the Energy Charter Treaty. This demand is also supported by more than one million people who have signed a petition to phase out the Energy Charter.
Francesca Mascha Klein, a lawyer at ClientEarth, said: “Like the coal phase-out, withdrawal from oil and gas is severely hampered by the Energy Charter Treaty. The new federal government must immediately initiate an exit from the Energy Charter Treaty. The Treaty must not continue to stand in the way of important steps to combat the climate crisis.”
A frequently mentioned argument for remaining in the Energy Charter Treaty is the expiry clause, which allows lawsuits even twenty years after an exit. International legal experts have recently shown, How this can be defused.
The briefing is edited by PowerShift, attac Deutschland, ClientEarth, Europe beyond Coal, Forum Umwelt und Entwicklung, NaturFreunde Deutschlands, Netzwerk Gerechter Welthandel, Umweltinstitut München and Urgewald.
For more information, please contact
Fabian Flues, Trade and Investment Policy Officer at PowerShift e.V.
fabian.flues@power-shift.de, +49 (0)159 0611 3733
Francesca Mascha Klein, lawyer at ClientEarth
