Does France’s decision mark the beginning of the end of the Energy Charter Treaty (TCE)? In the wake of other European countries, Paris announced, Friday, October 21, to withdraw from this controversial agreement, concluded thirty years ago and accused of “protect polluters”. “I watch with concern the return of the most polluting hydrocarbons and fossil fuels, explained Emmanuel Macron from Brussels, where he was taking part in a European summit. The war on European soil must not make us forget our climate demands and our imperative to reduce our CO₂ emissions. Pulling out of this treaty is part of that strategy. »
The Energy Charter Treaty, ratified by some 50 countries and the European Union (EU), was created at the end of the Cold War in 1994 to protect investors in the energy sector: it allows them to seek, before an arbitral tribunal, compensation from a State whose decisions could affect the profitability of their investments. Since then, many legal actions have been launched by companies or investment funds following regulatory or legislative changes.
In February 2021, for example, the German multinational RWE announced that it was suing the Netherlands because of its choice to phase out coal by 2030. In early September, Italy was ordered to pay at least 180 million euros to British oil company Rockhopper for denying him an offshore drilling permit. For the first time, France was also attacked at the beginning of September, this time by the German producer of renewable energies Encavis AG, after the government’s decision to revise downwards the purchase prices of photovoltaic electricity. In total, at least 146 TCE-related disputes have been identified.
“Effet domino”
“The TCE fully embodies these rules and institutions of the globalization of the 1990s and 2000s which delay, increase the cost or block the energy transition, believes Maxime Combes, economist at the International Association of Technicians, Experts and Researchers (Aitec). It allows investors to sue states that decide to shut down coal-fired power plants or to more finely manage support schemes for renewable energies, which they need to do. »
If the detractors of this treaty, mobilized for several years, largely welcome the decision of France, they hope that it will have a knock-on effect to lead to a coordinated withdrawal of all European countries. In 2015, Italy left the agreement unilaterally. Since then, the context has changed. While a revised version of the ECT must be submitted for approval to the signatory countries at the end of November, Spain, targeted by around fifty complaints, announced on October 12 that it was withdrawing from it.
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