MEP Manuela Ripa (ÖDP) on the Energy Charter Treaty (ECT)

Ripa: “Investment protection is prioritized over climate protection”

(Brussels/29.11.2022) Germany should urgently implement its announcement and withdraw from the Energy Charter Treaty (ECT), demands Manuela Ripa, MEP of the Ecological Democratic Party (ÖDP). For far too long, she said, Germans have been losing time and have not followed the example of other countries, such as France, which have already withdrawn from the treaty. Moreover, the IPCC report has described how damaging the ECT is to the climate. This is because it serves as an instrument for the fossil fuel industry to block the path towards renewables and thus sabotage global climate protection. According to the MEP: “If Germany withdraws from the Energy Charter Treaty soon, as announced, this will increase the pressure on the EU to terminate the Treaty as the EU is also a party to the treaty. Last week, a majority of the European Parliament called on the EU Commission to withdraw from the ECT in a resolution. This is an important signal for climate protection.”

The Energy Charter Treaty was adopted in 1994. Under the impression of the collapsing Eastern bloc, secure conditions for cross-border investments in energy projects had to be created. According to the ÖDP politician, the main problem is the investment protection stipulated in the contract. This enables energy companies to file claims for damages before international arbitration boards if they see their profits being adversely affected by political decisions. This instrument is eagerly used by the fossil energy companies to put Member States and their democratically elected governments under pressure. For example, RWE is currently suing the Dutch state regarding the decision that the company must shut down two of its coal-fired power plants in the country by 2030. Due to such lawsuits, states have had to pay 600 million US dollars to the fossil industry. The MEP, therefore, considers the charter to be out of date: “The fact that the corporations can sue makes any decision by the elected representatives towards a decarbonized energy supply risky because they take a high financial risk if they stop climate-damaging investment projects by energy companies. In this way, poorer countries, in particular, could be deterred from investing in climate protection at all,” said Ripa.

The MEP recalls that, according to climate researchers, this decade is the last in which global warming beyond the 1.5-degree target can still be met. Therefore, they said, an anachronistic treaty framework such as the ECT should not be allowed to torpedo undermine action. “Given the urgency of man-made climate change, the EU must act now and withdraw from the ECT,” Manuela Ripa concludes.