The EU is seeking to alter the Energy Charter Treaty and put in a 10-year phase-out of the protection for fossil fuels on it, following the calls from some countries to exit the treaty if it would not align with Europe’s climate goals.
On Monday, the European Commission submitted the proposal to reform the treaty.
The proposal plans to immediately stop protections for new investments in coal, oil, and power produced from these sources. New investments in natural gas-fuelled power infrastructure could maintain their protection until end-2030 if they emit lower than 380g of CO2/kWh and use low-carbon gases.
The replacement of coal by those gas plants, or any fossil fuel investments, would award longer protection for 10 years after the treaty amendment goes effective, or until 2040 at the latest. Hydrogen produced using fossil fuels would be protected if carbon capture technology is utilized to curb the resulting emissions.
In March, more than 50 signatories to the Energy Charter Treaty are set to continue the discussions to update the pact.
The treaty was established in the 1990s to protect the international investments of energy. Currently, it is facing criticism from European governments and environmental groups as they deem the treaty undermines efforts to stop the consumption of fossil fuel as it enables foreign investors to sue countries over policies affecting their investments.
In February, the Dutch government is being sued by German utility RWE for its plan to phase out coal-fuelled power by 2030.
Some campaigners opined that substantial reforms are unlikely for the treaty as unanimous support from all signatories would be required. The only possible option for the EU is to withdraw from the Energy Charter Treaty to align itself with the international Paris Agreement to tackle climate change.
