THE COUNCIL OF THE EUROPEAN UNION has failed to reach an agreement on the reforms to the controversial Energy Charter Treaty (ECT), in a moment hailed as historic by environmental lawyers.

A vote was due to take place on 18 November to determine the common position that the EU was set to take at the ECT annual conference today (22November), where all 53 parties to the treaty will decide to adopt or reject the ‘modernised’ agreement.

However, the EU vote was dropped after it appeared there would not be enough support to provide the European Commission with a mandate to endorse the reforms. As a result, the Commission will now ask for modernisation to be removed from the conference agenda.

Amandine Van Den Berghe, ClientEarth lawyer, said: “This is a historic moment in the fight to protect our planet from the fossil fuel giants whose business has been protected by the Energy Charter Treaty. “By voicing their opposition on Friday, France, Spain, Netherlands and Germany have shown real climate leadership in refusing to let this dangerous treaty obstruct climate action in the critical years to come.

“This is a great victory, but not the end of the fight. Member states that have signalled their withdrawal, or those that have withdrawn, represent around 75 per cent of the EU population: they should now pressure the Commission to urgently design a plan to leave the ECT and solve the current political and legal confusion. “Neither the European Union nor the member states can adopt the new ECT, and they cannot remain a party to an agreement that fundamentally conflicts with EU law. The Commission is left with no choice but to propose a full EU withdrawal.

“Now Frans Timmermans is back from COP27, he must show leadership as Executive Vice-President of the Commission and do what is in the best interest of the EU’s unity and climate transition.”

ClientEarth lawyers said that the Commission must now facilitate and coordinate the departure with other member states and negotiate an ‘inter-se’ agreement that neutralises the sunset clause.

This way, EU countries can avoid the application of the ECT among themselves for an additional 20 years. The Commission should drive this process, building on its existing proposal for an inter se agreement that applies to claims between EU investors and EU governments, and open this agreement to countries outside the bloc.

Van Den Berghe added: “Other ECT members, such as the UK and Switzerland, must follow in the EU’s lead and quit the agreement. Staying in this outdated treaty will only make their transition harder, slower, and more expensive. The EU’s withdrawal is an opportunity for them to get out.”

“The urgent messages from people on the climate frontline heard during COP27 are a stark reminder of why governments must accelerate the energy transition. On top of the ECT, there are still thousands of bilateral investment agreements with investor-state dispute settlement systems (ISDS) that can be used to stifle climate action. “The end of the ECT should be the beginning of a complete rethinking of EU’s investment policy – because yes, there are alternatives.”

* More information on the Energy Charter Treaty here.

* Ahead of the EU’s vote, NGOs wrote to Frans Timmermans, European Commissioner for the European Green Deal, urging he put forward a coordinated withdrawal of the EU. Read the letter here.

* Source: Client Earth