(TEC) THE ANCHOR OF EUROPE

(TEC) THE ANCHOR OF EUROPE

GERMANY AND OTHER COUNTRIES TO WITHDRAW FROM THE FOSSIL FUELS TREATY

The 1994 Energy Charter Treaty allows utilities to sue governments if they make changes to energy policies.

Several EU states say the pact is incompatible with the urgent need to tackle climate change.

Germany will withdraw from the 1994 energy treaty that has been widely criticized for protecting fossil fuel investments, a government spokesman said on Friday.

IMPORTANT REVIEWS

Franziska Brantner, parliamentary state secretary at the Ministry of the Economy, said the decision to withdraw from the ENERGY CHARTER TREATY (ECT) was part of the country's commitment to "constantly align our trade policy with climate protection".

This is an important step for the United Nations Climate Change Conference, COP27, which is taking place in Egypt AND a positive signal from Germany on Net-Zero Emissions commitments.

BLOCK DECISION

Europe's largest economy joins France, the Netherlands, Spain and Poland in withdrawing from the pact.

The other countries have said the pact is inconsistent with their commitments to the 2015 Paris agreement to combat climate change.

WHAT IS THE ENERGY CHARTER TREATY?

The ECT, which has more than 50 signatories, including the European Union, was designed to guarantee the supply of energy and offers protection to companies that invest in the energy industry.

His focus was primarily on energy infrastructure investments in volatile ex-Soviet states in Central Asia and Eastern Europe,

A key element of the treaty allows energy companies to sue governments for energy policy changes that could harm their investments, exposing states to "BILLION-DOLLAR COMPENSATION CLAIMS."

https://www.dw.com/en/germany-to-pull-out-of-fossil-fuel-treaty/a-63732431

The German utility company RWE has used the ECT to initiate legal action against the Netherlands, claiming that the government did not provide adequate time and resources to phase out coal.

The case may have partly motivated the Dutch decision to leave the treaty.

In June, the European Union reached a compromise agreement, which will take effect next month if no signatory objects, to review the treaty and limit legal action when it jeopardizes climate goals.

But climate groups have criticized the loopholes left in the update and say it continues to jeopardize efforts to curb global warming.

OBSTACLE TO THE ENERGY TRANSITION

The leader of the Green parliamentary group, Katharina Dr?ge, hailed the German decision as a "MILESTONE".

“No other international trade or investment agreement in the world has provoked more lawsuits from investors than the Energy Charter Treaty,” said Katharina Droge.

"This pact is an obstacle to the energy transition and costs the state billions."

ANALYZE TO UNDERSTAND

1?? THE EU STATES "REBEL" AGAINST THE CONTROVERSIAL ENERGY TREATY

Energy companies have been suing European governments for billions of euros to protect their fossil fuel investments in recent years through an obscure treaty awarded in secret arbitration courts.?

"But that could be about to change."

https://www.dw.com/en/energy-charter-treaty-ect-coal-fossil-fuels-climate-environment-uniper-rwe/a-57221166

2?? THE CONTROVERSIAL AGREEMENT

In February, German energy company RWE invoked a shadowy deal called the Energy Charter Treaty (ECT) to sue the Netherlands for €1.4bn ($1.67bn)?

https://friendsoftheearth.eu/press-release/coal-company-sues-netherlands-for-1-4-billion/

As compensation for phasing out coal by 2030.

?ABSURD!.

3?? THE ISSUE KEEPS GETTING WORSE

The case is the tip of a litigation iceberg, with another German energy company, Uniper, on Friday confirming it will take the Netherlands to court over its exit from coal and, in parallel, is suing for €1bn under compliance with the ECT.?

Such claims are magnified due to an obscure "FUTURE EARNINGS" clause.

4?? WHAT IS THIS TREATY LOOKING FOR?

The treaty protects around 345 billion euros in fossil fuel infrastructure in the EU, Britain and Switzerland.

5?? INCREASE TENSION

Concern is growing among EU politicians and climate activists that the investor-friendly ECT is slowing climate ambition. It is also shifting the burden of climate action from fossil fuel companies to taxpayers. Opponents say the massive public payments should be spent on decarbonisation and the energy transition.

ANALYSIS

“IF GOVERNMENTS HAD TO PAY 1,400 MILLION, IT IS MONEY THAT CANNOT BE INVESTED IN RENEWABLE ENERGIES”