French President Macron data map. Photo/Xinhua News Agency
has been plaguing Europe's energy supply problems and renewable variables recently.
On October 21, local time, French President Macron announced that France will withdraw from the Energy Charter Treaty, thus becoming the latest EU country to recently announced its intention to withdraw from the treaty.
Macron's reason is that "the treaty does not conform to our current position on energy and environmental protection." He also said that "wars on European land (referring to the Russian-Ukrainian military conflict) cannot make us forget about climate requirements and the need to reduce carbon emissions."
Previously, the Dutch government also stated that the Energy Charter Treaty does not conform to the spirit of the 2015 Paris Climate Agreement, although several attempts to "modernize" the treaty have been made. To this end, the Dutch government will withdraw from the treaty "at the timing", and its spokesperson even claimed that "it's better for the entire EU to withdraw."
However, the first EU country to announce its withdrawal from the Energy Charter Treaty was not Netherlands , but Italy, which withdrew from the treaty as early as 2016. In addition, Spain and Germany have confirmed that they are "actively evaluating" whether to withdraw from the treaty; and in a parliamentary vote in early October, as many as 418 out of all 460 members of the parliamentary group agreed to withdraw from the treaty.
Not only that, news from Brussels says that more EU countries may follow in the footsteps of Italy, the Netherlands, France and other countries. This makes people wonder what Europe is trying to do because of energy issues?
On October 18th local time, the vehicle passed through the European Commission headquarters building in Brussels, Belgium. On the same day, the EU proposed new emergency measures to deal with the soaring price of natural gas , ensuring the safety of energy supply this winter. Photo/Xinhua News Agency
Treaty has also worked hard and made great contributions
The Energy Charter Treaty was signed in 1994 and came into effect in 1998. It currently has 55 member states, the vast majority of which are European and Asian countries. It is intriguing that the treaty was the result of the efforts of the EU and its major member states to promote and spawn.
At that time, the collapse of . The collapse of the Soviet Union was in financial difficulties. It was urgently necessary to introduce foreign capital to help its energy industry develop, thereby obtaining valuable funds. But at that time, Western and especially European investors, were full of concerns about investing "real money" in relatively unfamiliar markets.
, such a stagnant, also harms the interests of the EU and its major member states that urgently need to obtain a more stable energy supply. One side wants to make profits by encouraging investment in the energy industry in CIS countries, while the other side hopes to gain valuable development momentum by introducing foreign capital. In this way, the EU, which has its own thoughts, reached a tacit understanding on the protection of fossil fuel production infrastructure, and the result is the Energy Charter Treaty.
This treaty allows energy companies to sue the government of the contracting party, , to ensure that the relevant investment interests are not violated, and that is, only "civilians sue officials" is allowed, and "civilians sue the people" is not allowed. The threshold for litigation is also quite low. As long as the investor believes that he is being treated "unfairly", he can initiate a lawsuit, and the arbitration results are usually very beneficial to the plaintiff. For more than 120 years, this treaty has effectively protected EU enterprises and capital invested in CIS countries, especially Russia, so that they can compete with the Russian local energy oligopolies that have home-game benefits.
, while Russia generally abides by the constraints of this treaty due to complex considerations such as retaining foreign investment and maintaining the market. Relevant research shows that since its entry into force, the Energy Charter Treaty has protected 344.6 billion euros worth of fossil energy infrastructure in Europe alone, which is a great contribution.
On October 7th local time, Czech Capital Prague , EU Commission Chairman Von der Leyen holds a joint press conference after the informal meeting of EU leaders. The leaders at the meeting held consultations on energy issues, but did not achieve any specific results.Photo/Xinhua News Agency
Is the EU still for the benefit
Now, why are several major EU member states scrambling to abolish the Energy Charter Treaty that has brought many benefits and conveniences to themselves? Is it true that they are for the needs of environmental protection and emission reduction?
This is of course part of the reason. After all, before the outbreak of the Russian-Ukrainian military conflict, the EU was the center of the so-called "green energy political correctness", and major countries have launched more radical schedules and plans to abolish fossil energy and switch to green energy.
and even green energy are divided into different levels in this wave. Nuclear power and hydropower, which are green energy, or at least "quasi-clean energy", are also included in the separate list by many EU countries. For a moment, it seemed as if anyone who was "not green enough" would be full of "original sin".
Western Europe natural gas prices rose sharply in the second half of last year, especially this year's military conflict between Russia and Ukraine has caused this impetuous wind to "turn green in one step". For example, Germany began to reconsider the self-sufficiency lignite , and several other EU member states also began to reassess whether they really wanted to give up nuclear power, hydropower, and quietly postponed the "green energy replacement timetable".
Despite this, "reducing carbon emissions" and "advocating green energy" are still the "political correctness" of the EU's dominant position. The vast majority of EU politicians are still "rather green than black" to avoid being able to take advantage of their political opponents. It is also because of this that when Macron announced that France withdraws from the Energy Charter Treaty, he specifically mentioned the "impact of the situation in Ukraine."
However, this is only part of the reason—or just part of the reason for face. The reason for "inside" is two concise words: interests.
Due to the outbreak of the Russian-Ukrainian military conflict, the EU has successively imposed up to eight rounds of sanctions on Russia, many of which involve restrictions on investment in the energy industry in Russia. At the same time, Russia has also taken counter-sanctions against the EU and its member states.
No matter how the direction of military conflict evolves, it can be concluded that for a considerable period of time in the future, neither the EU nor Russia will continue to follow the purposes of the Energy Charter Treaty and protect EU capital's investment in Russian energy infrastructure.
Even if the situation eases in the future, under the strategic consideration of "diversification of energy channels", the EU and Russia will increasingly tend to reduce the existence of EU capital in the Russian energy infrastructure market - but the EU is considering imports, while Russia is producing and exporting.
In this way, the Energy Charter Treaty is actually useless.
What's more serious is that in order to make it easier for CIS countries such as Russia to accept, the principle of "only allow the people to sue officials, not officials to sue the people" in the Energy Charter Treaty came into force for all States parties.
As a result, when EU member states promote laws and policies to encourage green energy and phase out fossil energy in accordance with the new "political correctness" and the purpose of the Paris Climate Agreement, they are "sniped" by fossil energy producers within the EU. The "magic weapon" in the hands of these companies is nothing else, it is the Energy Charter Treaty.
On October 6, 2022 local time, in the northern French city of Lille , a long queue of vehicles were lined up in front of the gas station of Auchan Supermarket. On the same day, the French government launched a national energy-saving plan to deal with the risk of shutting down energy supply in winter. Photo/Xinhua News Agency
It is not easy to withdraw
In fact, the Energy Charter Treaty has caused trouble to the governments of some EU countries.
For example, the reason why the Italian government announced its withdrawal as early as 2016 was that the country introduced legislation to ban offshore oil drilling that year, which harmed the interests of British companies that have obtained the exploitation of offshore oil in Italy. The latter immediately sued it in court under the Energy Charter Treaty and claimed hundreds of millions of euros. In fact, the British company only invested a mere 25 million euros in Italy.
Earlier this year, the Dutch government announced that it would "eliminate coal early", but it was also sued by the German energy company, which has huge coal interests in the country, demanding compensation of 1.4 billion euros. Its "trump card" is also the "Energy Charter Treaty."
research shows that in recent years, the Energy Charter Treaty has been increasingly used by various energy capitals within the EU to "report officials". As some analysts and anonymous EU government officials privately acknowledged, if the Energy Charter Treaty continues to be used in this way by energy companies and capital, the EU's implementation of "green energy substitution" within its territory would mean risking that these companies would "take advantage" more than one trillion dollars.
It is also true that since 4 years ago, EU Council has begun to discuss the "modernization" of the Energy Charter Treaty. In June this year, amid the Russian-Ukrainian military conflict, the European Commission reached a treaty amendment agreement, saying that the revised treaty "will promote sustainable investment in the energy sector." The main modifications of the
agreement to the Energy Charter Treaty include "the text of the new treaty must be implemented first in its domestic law". For EU member states, it must also be approved by the EU Council and the European Parliament. At the same time, the parliaments of each EU member state can also "veto it".
However, for radical environmental protection organizations and politicians from all over the world who are afraid of being killed by "green energy political correctness", these minor revisions are obviously far from enough. Another reason for opposition that is shy about is that these modifications are not enough to prevent enterprises and capital investing in fossil energy in the EU from continuing to hold high the Energy Charter Treaty.
However, it is equally easy to exit.
In the early days, because of fear that Russia and other CIS countries would repent, EU countries deliberately inserted Article 49 in the Energy Charter Treaty, stipulating that even if a certain country withdraws, "the provisions of this treaty will continue to apply for a period of 20 years."
, a typical "sunset clause", now just made the EU take a stone and smash itself in the foot - the aforementioned British company sued the Italian government for a claim. Although Italy withdrew from the treaty in 2016, in August this year, the arbitrators still ruled that the Italian government lost the case and needed to pay 190 million euros.
Because, according to the "Sunset Terms", the beginning year of the entry into force of Italy's withdrawal from the Treaty is 2036; similarly, even if the Netherlands and France withdraw from the Treaty now, according to this "Article 49", relevant enterprises and capital can still hold the claims of "civilian suing officials" and "green energy replacement sniper" until 2042.
Therefore, the governments of EU countries such as France publicly challenged the Energy Charter Treaty at this time. Although it showed to a certain extent "green development" and the determination to get rid of Russia's energy dependence, there were some "extraordinary problems". Not only could they not get rid of the situation of being influenced by energy capital in the short term, but they also added more variables to the already severe and complex European energy supply market.
Written by Tao Short House (columnist)
Editing / He Rui
Proofreading / Zhao Lin
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