Climate: why is France withdrawing from the Energy Charter Treaty?

by time news October 22, 2022

October 22, 2022

It is a treaty preserved from the old world, which has become contrary to the ecological transition measures that France intends to implement. This Friday, October 21, Emmanuel Macron announced, on the sidelines of a European summit in Brussels, that France would withdraw from the Treaty on the Energy Charter, established in 1994.

Adopted with the aim of encouraging companies to invest in the countries of Eastern Europe and the former Soviet Union, this treaty now poses a serious problem. Indeed, it allows companies to sue a State if the latter makes decisions affecting the profitability of their investments. However, the pro-climate policies issued by European governments have a negative impact on investments in the field of fossil fuels.

After Spain and the Netherlands, France has therefore decided to leave a text which nevertheless claims to be respectful of “the principles of sustainable development”. In fact, it is not, despite the attempts to modernize the text that have been taking place since 2020. If they give some results – from next November companies will no longer be able to make “frivolous complaints” and some investments launched in fossil fuels will be excluded – these measures prove insufficient for France, which does not want to find itself one day in the grip of an energy giant. This is currently the case of the Netherlands, which, after adopting a law banning the use of coal by 2030, was sued by the German energy company RWE.

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Also, France knows that by remaining bound to this treaty, it will not be able to fulfill the objectives of the Paris Climate Agreement. Signed in 2015, it plans in particular to limit global warming to 2°C during the 21st century, to reassess national commitments every five years, and to provide developing countries with financial resources to mitigate the impacts of global warming. So many irreconcilable points with a treaty that protects foreign investments in energy to the detriment of those of nations in safeguarding the planet. This withdrawal was also demanded by several authorities, including the High Council for the Climate, which considers that “decarbonization schedules” are incompatible with compliance with this charter.