Why France left the Energy Charter Treaty

• Emmanuel Macron announced on Friday France's withdrawal from the Energy Charter Treaty (TCE) which "was an important point requested by many", explained the Head of State.

• Indeed, this week, a letter addressed to French ministers signed by various climate defense NGOs and an opinion from the High Council for the Climate called on France and the European Union to withdraw from the TCE.

• How does this treaty pose problems in terms of energy policies and the sovereignty of signatory states?

  Answers with Yamina Saheb, former head of the energy efficiency unit at the TCE secretariat, author at the IPCC and researcher in climate policy.

It is a text which dates from 1994, at the end of the Cold War, and which today seems to run counter to all the commitments made by the Paris Agreement on fossil fuels.

The Energy Charter Treaty (TCE) is the object of the revolt of the High Council for the Climate as well as that of many NGOs (non-governmental organizations) for the defense of the planet.

Emmanuel Macron announced on Friday that France was coming out of it, considering that this withdrawal was an “important point requested by many”.

“There was no other possible option”, reacted to

Yamina Saheb, former head of the energy efficiency unit at the TCE secretariat, author at the Intergovernmental Panel on Climate Change ( IPCC).

What is this treaty for?

Why is it problematic?

And why is France giving it up?

Explanations with the one who is also a researcher in climate policies.

What is the Energy Charter Treaty?

Although it dates back to 1994, the ECT was only applied from 1998. At the time, its objective was to protect investments in the countries of Eastern Europe and the former -USSR.

Virtually unchanged for almost thirty years, it continues to "protect foreign investment in the production, exploitation and distribution of all sources of energy combined", namely renewable energy as well as nuclear energy and fossil fuels. , sums up Yamina Saheb, who has been warning for four years about the obstacles created by joining this treaty.

This protection translates into the possibility for investors to sue governments in private courts if they change an energy law that affects their interests.

“At the beginning, it was our companies that used it to protect their investments abroad, explains Yamina Saheb.

EDF, for example, attacked Hungary, which was not yet a member of the European Union (EU), when it decided to set electricity prices to fight against precariousness”.

And so, "at that time, it didn't bother anyone," adds the treaty specialist.

There are about 150 disputes evoking the ECT, says Yamina Saheb.

A number possibly underestimated knowing that there is no obligation on the part of the State or the investor to communicate on these complaints.

Today, 53 countries, including all EU Member States, and the European Union as such, are signatories to the treaty.

Why is this TCE problematic?

The problem appears crystal clear at a time when the EU is trying to agree on regulating energy prices.

“If we introduce a regulated cost of energy today, the European Union could be attacked,” underlines Yamina Saheb.

Same thing with renewables.

While today the cost of the technology allowing the installation of these so-called “clean” energies has fallen, certain governments intend to reduce their subsidies.

This is what happened in 2011 in Spain, a country which had attracted “a large number of foreign investors” in this sector.

When Madrid wanted to lower its subsidies, several companies had filed a complaint… ultimately without success,

The other black spot concerns fossil fuels.

Thus, fossil fuel investors can curb any attempt by the State to legislate to reduce the use of fossil fuels, the main carbon emitters and the main responsible for global warming and climate change.

"The objective of climate neutrality is synonymous with a premature cessation of fossil fuels and concerning this objective, countries will be attacked by investors", insists Yamina Saheb.

In this context, the ECT is also singled out by scientists from the IPCC: "international investment agreements can lead to 'regulatory reluctance', which can lead countries to refrain from or delay the adoption of investment policies. mitigation, such as the phasing out of fossil fuels",

Finally, these attacks against States highlight the loss of sovereignty of the signatory countries in their fight against climate change.

“Imagine a world where the big brands of cigarettes would receive billions of euros in compensation from the State – and therefore from the taxpayers –, on the grounds that the latter decided to ban smoking in public places.

Difficult to accept?

And yet, applied to energies, and in particular to fossils, this rule does indeed exist”, thus illustrates a column published in

in June.

“When we are a signatory, we lose our sovereignty over our energy policy, it is foreign investors who decide our policies, abounds Yamina Saheb.

And we cannot leave the energy sector to be managed by foreign investors”.

Why did France choose to leave the TCE?

In an opinion published on October 19, 2022, the High Council for the Climate called on Paris and the European Union to withdraw from the treaty.

Before him, more than thirty NGOs have this week challenged several French ministers for the same reasons.

This is why, this Friday, the Head of State announced France's withdrawal from the TCE, “an important point requested by many”.

"At the moment we are living in, we must instead focus our investments and move faster on renewables, energy efficiency, nuclear power (…) and today, I am watching with concern the return of the most polluting, argued Emmanuel Macron.

Several recent cases show that [the TCE] led to somewhat speculative mechanisms and significant compensation for certain fossil fuel players.

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" It's finish !

Now there remains a technical application procedure which can take a little time.

But I would still have dreamed of a France taking the lead, ”says

Yamina Saheb, recalled just after Emmanuel Macron’s announcement.

The fact remains that if several countries had preceded Paris (Italy left in 2016, when Spain, the Netherlands and Poland recently announced their withdrawal), the French decision should have a domino effect: "from now on a dozen countries will follow inside and outside the European Union, many were waiting for France's decision, ”predicts our expert, who argues that an exit from Germany is in the pipeline.

Our climate report

On November 22, ministers from member countries will also meet to accept or reject the conclusions of new negotiations around the treaty.

The opportunity to take stock of this "survival clause" which provides that the treaty can still apply twenty years after the withdrawal of a signatory country... And the opportunity for France to confirm its withdrawal from the treaty and then to the other signatory countries to the Paris Agreement and the ECT to make a choice.

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