EU Parliament Backs Exit from Energy Charter Treaty Amid Climate Concerns
The European Parliament has given its consent for the EU to withdraw from the Energy Charter Treaty (ECT), an international agreement that protects energy investments. The ECT has been criticized for undermining efforts to combat climate change, as it allows energy companies to sue governments over policies that damage their investments.
Several EU member states, including Denmark, France, and Germany, have already announced plans to leave the treaty. The EU’s withdrawal would significantly weaken the treaty, which currently has 50 signatories.
The European Parliament’s approval means that EU countries can now take a final decision to exit the treaty, which is expected to be made in May. EU officials said that ministers gave their initial backing to the withdrawal last month.
Cyprus and Hungary had wanted to remain in the treaty, while other countries were concerned that efforts to modernize the treaty would be wasted if they left. To address these concerns, EU countries are expected to agree to allow reforms to modernize the treaty to pass before quitting.
Signatories to the treaty agreed to the reforms last year, but they had little chance of coming into force without EU support. One of the reforms would halve the time non-EU energy firms would continue to enjoy the pact’s protections to their investments in the EU after the bloc’s departure.
The Energy Charter Treaty secretariat has not responded to requests for comment. However, Green EU lawmaker Anna Cavazzini, who led the Parliament’s work on the treaty exit, said: “This absurd treaty has slowed down climate protection and cost citizens billions in taxpayers’ money in the form of legal costs before private arbitration tribunals and compensation payments to multinational corporations.”
Why the Energy Charter Treaty is Controversial
The Energy Charter Treaty was signed in 1998 and entered into force in 1994. It was designed to protect energy investments and promote cooperation between energy-producing and energy-consuming countries. However, the treaty has been criticized for giving too much power to energy companies and for undermining efforts to combat climate change.
In recent years, energy companies have used the ECT to sue governments over policies that require shutting down fossil fuel plants. This has made it more difficult for governments to take action to address climate change.
The EU’s Withdrawal from the Energy Charter Treaty
The EU’s withdrawal from the Energy Charter Treaty is a significant step forward in the fight against climate change. It sends a clear message that the EU is committed to taking action to reduce emissions and transition to a clean energy future.
Other countries are also considering withdrawing from the Energy Charter Treaty. In 2022, Spain became the first EU country to formally withdraw from the treaty. Other countries, including Canada, New Zealand, and South Africa, have also expressed interest in withdrawing.
