After a late Friday deal, the German government has announced its intention to withdraw from the Energy Charter Treaty (ECT), following similar decisions in other large EU countries, which left activists jubilant.
The Energy Charter Treaty was signed in the 1990s, at a time when oil and gas majors were looking to shield their investments from political instability in the former Soviet Union.
Nowadays, companies have relied on the treaty to sue governments against plans to phase out fossil fuels, going against the EU’s climate commitments under the Paris Agreement and leading some EU countries to announce their withdrawal.
In recent months, Spain, Poland, the Netherlands and France have all announced their intention to leave the ECT, citing environmental concerns.
Now, Germany has decided to join them. “We want to adopt the withdrawal of the Federal Republic of Germany from the Energy Charter Treaty quickly,” reads an agreement sent out on Friday (11 November) by the German government coalition parties.
This should happen within the month, in parallel with the ratification of the EU-Canada trade agreement CETA.
“At the European level, we intend to abstain in the Council vote on Tuesday, 15.11.2022, on the EU’s positioning as a separate Contracting Party to the Energy Charter Treaty on reform,” it adds.
In May 2022, Green vice-chancellor Robert Habeck stated his intention to withdraw in a newspaper op-ed. As EURACTIV understands, the liberal FDP had been blocking Germany’s exit for months. In turn, the FDP received concessions such as a commitment to give another try at concluding an EU-US trade and investment treaty.
“Major success for climate and democracy,” commented German NGOs Umweltinstitut Munich and PowerShift in a statement on Friday.
“Our years of work have paid off: Germany’s withdrawal from the Energy Charter Treaty is a beacon for climate protection and for our democracy,” explained Ludwig Essig, advisor for trade policy at Umweltinstitut Munich.
The face of climate activism in Germany, Luisa Neubauer, tweeted that Germany exiting the ECT “is so so so big [sic]. Spread the word!”
The Greens who had negotiated the deal were jubilant too. “Today is a great day for climate protection in Germany, Europe and worldwide,” explained Andreas Audretsch, vice-president of the Greens in parliament.
The move by Germany is a blow for the European Commission, which sought to negotiate a reform of the the treaty and align it with the climate goals of the Paris Agreement, based on a mandate given by the 27 EU member states in 2019.
In June, the EU executive announced a breakthrough in the reform talks, which will be submitted for approval to all signatories later this month. Unanimity is needed among the treaty’s 53 contracting parties in order to pass a reform.
The reformed treaty included provisions to cease legal protection for new investments in fossil fuels after 15 August 2023. For existing fossil investments, legal protection will expire “after 10 years” from the entry into force of the reformed ECT.
Should reform talks fail or countries decide to withdraw, a 20-year “sunset clause” will apply during which energy investments will continue enjoying legal protection under the ECT.
[Edited by Frédéric Simon]
