Brussels proposes that the European Union withdraw en bloc from the Energy Charter Treaty

The European Commission today proposed that the EU withdraw en bloc from the Energy Charter Treaty (ECT), a legal framework to protect fossil investments that it has fallen behind the climatic objectives, in the opinion of countries such as Spain, France or the Netherlands, which had already opted to leave individually.

“It’s time for Europe to withdraw from this Treaty and put all its emphasis on building an efficient and competitive energy system that promotes and protects investments in renewable energy,” Frans Timmermans, Vice President of the European Commission responsible for the Green Deal, said in a statement.

The Community Executive was in favor of modernizing the treaty, since the signatories continue subject to its arbitration rules for up to 20 years after withdrawaland in any case for the European Union to withdraw en bloc.

[Bruselas asume la “inevitable” retirada coordinada de la Carta de la Energía por el rechazo de España y otros]

But the difficulty in updating this legal framework and the refusal of several EU countries to remain within this legal framework has led the Community Executive to propose the exit of that pact conceived in 1994, signed by 53 countries and in force since 1998, designed to offer additional guarantees to investors after the fall of the Soviet bloc. The Commission’s legal proposals to abandon that treaty will be submitted to the Council of the EUwhere a supermajority vote is needed for approval.

“We hope there will be a first informal discussion between the energy ministers in Valladolid, Spain, next week” at the informal meeting under the Spanish presidency of the Council of the EU. Simultaneously, Brussels will withdraw its previous proposal to update the treaty.

Critical countries, including There are also Germany, Poland, Denmark or Portugal, They consider that this multilateral treaty had become outdated by virtue of the objectives of the Paris Agreement of 2015 to reduce the emission of greenhouse gases and curb global warming.

Several of the points under discussion generated great misgivings, in particular the protection of investments in infrastructure for fossil fuels and the resolution of disputes in private arbitration courts, which in more than two decades have given rise to claims of about 40,000 million euros.

[Bruselas vuelve a situar a España en tercera división de la UE en innovación]

The Investigative Europe portal estimates that the fossil infrastructure protected by the treaty in the EU, United Kingdom and Switzerland reaches a value of 344,600 million euros, of which three quarters correspond to oil and gas fields (126,000 million) and oil pipelines (148,000 million).

The German energy company RWE recently used the treaty to demanate to the Netherlands for €1.4 billion because the country accelerated its move away from coal.

Spain, for its part, tried unsuccessfully last May for the High Courtr of London to annul the arbitration award Antin, which forces to pay 120 million euros to harmed investors when in 2013 they reduced the aid from 2007 to renewable energy.

It’s just one of the disputes in Spain on this issuewhich accumulate claims of billions of euros as a result of the legislative change towards renewables by the Government of Mariano Rajoy with respect to the 2007 aid adopted by the Executive of José Luis Rodríguez Zapatero.

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As of last May, 52 arbitrations had been filed, of which 29 awards have been rendered. Spain has won 62 and others have been canceled 19 are pending resolutionwhile in three cases the plaintiffs have withdrawn their claim to benefit from the regulations approved in 2019, which guarantees a return of 7.39% until 2031, if they renounce arbitration processes.

“We support a coordinated withdrawal. If it doesn’t happenwe will go our own way, but it is better with the rest of the Member States“, Spanish diplomatic sources had pointed out this week regarding the joint exit.

The coordinated withdrawal is a gesture that is also supported by environmental platforms such as ClientEarth, which considers that abandoning the treaty en bloc “is how the EU can preserve solidarity in the international arena and accelerate their climate ambitions without fear of retaliation from the fossil fuel industry.”