Press play to listen to this article
The fossil fuel industry is facing the disintegration of one of its most important international agreements – and the man running the show isn’t taking it well.
A succession of major European Union governments have now abandoned the Energy Charter Treaty (ECT), an agreement between 53 countries originally designed in the 1990s to protect Western investment in the energy systems of Post-Soviet states.
This is the international pact more used by energy companies to sue governments when policies undermine the profits they make, often from the sale of dirty fuels. France, Spain and the Netherlands, all mindful of their ecological obligations, have said the treaty’s punitive legal protections for fossil fuel projects are anathema to their climate change efforts.
For ECT General Secretary Guy Lentz, the tension is clearly felt. Last week he castigated on Twitter to a researcher who criticized a package of reforms aimed at removing fossil fuels from the treaty.
“Who pays these clowns for this kind of bullshit? he asked, before doubling down in a series of angry or mocking tweets and replies, as well as text messages to a POLITICO reporter when questioned.
On Monday morning, sitting in his office in the leafy outskirts of Brussels, Lentz said he regretted the first of his tweets. “But then, believe it or not, the rest was hacked,” he claimed. “It was not me.”
The tweets prompted the European Commission and others to demand an explanation from Lentz, he said.
“He’s probably really passionate about his job,” Dutch Climate and Energy Minister Rob Jetten said, adding: “It’s always more useful to continue the conversation than to start, I don’t know, at yell at everyone on Twitter.”
Asked by POLITICO to provide proof that his Twitter account had been hacked, Lentz refused.
It was one of many confusing or contradictory claims made in an hour-long interview with POLITICO by the boss of the treaty organization, which offers sweeping protections for about €344.6 billion investment in fossil fuels in the EU, UK and Switzerland alone.
Most strikingly, Lentz could not give a straight answer when asked if it would be better for the climate if the treaty did not exist at all.
“Certainly,” he said, at least as far as EU climate ambitions are concerned. “But we have this treaty that exists, you can’t pretend it doesn’t exist. So what we’re doing is damage control.
In a subsequent phone call, he clarified that he had been hasty in his response because he had not considered that a series of reforms – negotiated by the EU but still awaiting approval by its member countries – would undo prosecutions within the block. Furthermore, he said the deal’s coverage of renewable energy investments internationally meant “it would be better to have that for the future” as the treaty seeks to expand to 40 more. countries, mainly in Africa.
His confused position reflects the broader feeling that the ECT is a treaty that is both outdated but impossible to remove.
“This treaty was invented at a completely different time in our history,” Jetten said. “We really need different kinds of international agreements, on investment policies and on climate policy.”
ECT’s Sword of Damocles hangs over the green country goals. This year, two German companies sued the Netherlands over its coal phase-out. The treaty may also create a so-called “regulatory cooling” effect, where countries are discouraged from changing their laws for fear of being sued. But even if countries choose to exit the treaty, they can still be sued for up to 20 years after leaving the organization.
The reform process, led by the European Commission, aimed to end the protection of fossil fuels. But resistance from Japan, Kazakhstan and other members meant he could only partially achieve his goal. The EU and the UK won a concession allowing them to stop protecting fossil fuel projects in 10 years. For other members of the Treaty of 53 countriesit will be as usual.
The Commission is now trying to sell this as a victory and get EU members to give final approval. But several EU countries cut and run.
On Friday, French President Emmanuel Macron announcement this country would withdraw from the investment pact because it did not align with the Paris agreement on climate change.
The French decision followed announcements by Poland, Spain and the Netherlands that they pulling. These countries are now pushing for the EU as a whole to leave the treaty. Jetten said he would pressure his fellow ministers at a summit in Luxembourg on Tuesday. Germany is considering it and Belgian Climate Minister Zakia Khattabi also called for her country’s withdrawal on Monday. describing treat it as a “Trojan horse” that endangers European climate policy.
Lentz and the European Commission are imploring these countries not to block reforms at the EU level so that they can be adopted at a crucial meeting on November 22, when the 53 countries meet in Mongolia.
“If by November we don’t adopt modernisation, the result is simply the status quo,” a Commission official, Carlo Pettinato, told members of the European Parliament on Monday.
There is a third way: countries could vote in favor of the reforms and then walk away from the agreement. This is the Dutch plan and Lentz said the French told him they would do the same.
The Commission argues that the deal’s benefits for renewables should not be dismissed due to concerns about fossil fuel investment. But for the Netherlands, Jetten said, the lessons of the coal lawsuits have been taken to heart.
“It’s better to leave this treaty and, after 10 years, get rid of it and have more openness and more political freedom,” Jetten said.
Open the door to China
Lentz believes that big countries like France and Germany leaving the deal would be a major strategic mistake, annoying the EU’s main energy suppliers – like Azerbaijan – and opening the door for China to take over. relay of Europe as leader of the treaty.
Beijing took its first steps towards membership five years ago before the EU hit the brakes. “This treaty could really speed up the Silk Road,” Lentz said, adding that China could eventually take the lead in the international organization with the departure of the French and potentially Germany. “It’s a big void. I mean, someone might look at this and say, ‘Well, that could be an opportunity.’
Brussels also argues that despite the new version of the treaty that continues to protect fossil fuel infrastructure, the pact is still useful for promoting green energy investment and even rebuilding war-torn Ukraine.
Lentz, for his part, seems mystified by the country’s decision to leave, but admits there are two ways to look at it. “I would see the full side of the glass and not the empty side,” he said, holding a goblet of water aloft.
Camille Gijs contributed reporting.
This article is part of POLITICO Pro
The one-stop solution for policy professionals fusing the depth of POLITICO journalism with the power of technology
Exclusive and never-before-seen scoops and ideas
Personalized Policy Intelligence Platform
A high-level public affairs network