A German government spokesman said on Friday that Germany would withdraw from the 1994 energy treaty, which has been widely criticized for protecting investments in fossil fuels.
Franziska Brantner, Parliamentary Secretary of State for the Economy Ministry, said the decision to withdraw from the Energy Charter Treaty (ECT) was part of the country’s commitment to “continually align our trade policy with climate protection”.
She added that the move was also an important signal for the United Nations Climate Change Conference, COP27, which is underway in Egypt.
Europe’s largest economy joined France, the Netherlands, Spain and Poland in withdrawing from the agreement.
Other countries said the agreement was not in line with their commitments to the 2015 Paris Agreement to combat climate change.
What is the Energy Charter Treaty?
ECT, which has more than 50 sites including the European Union, is designed to secure energy supplies and provide protection for companies investing in the energy industry.
Its focus was mostly on energy infrastructure investments in the volatile ex-Soviet states of Central Asia and Eastern Europe,
A key element of the treaty allows energy companies to sue governments over energy policy changes that could harm their investments — exposing countries to billions of dollars in compensation claims.
German utility company RWE used ECT to initiate legal action against the Netherlands, alleging that the government had failed to allow sufficient time and resources to move away from coal.
The case may have partially prompted the Netherlands’ decision to withdraw from the treaty.
In June, the European Union struck a settlement agreement — to go into effect next month if neither signator objected — to revise the treaty to limit legal action that jeopardizes climate goals.
But climate groups have criticized the remaining loopholes in the update and say they continue to jeopardize efforts to limit global warming.
Obstacle to the transmission of energy
The leader of the green parliamentary group, Catherina Druge, hailed the German decision as a “milestone”.
“There is no other international trade or investment agreement in the world that has triggered more lawsuits among investors than the Energy Charter Treaty,” she told German news agency DPA.
“This agreement is an obstacle to the energy transition and costs the state billions.”
mm/aw (AFP, AP, dpa, Reuters)
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