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Next step on net-zero ambition for Europe

Published : Monday, 11 March, 2024 at 12:00 AM  Count : 283
ANDREW HAMMOND
Since the Ukraine war began, the EU has reprioritized energy security as it moves away from Russian fuels in its energy mix. However, on Thursday, the bloc made a significant pivot toward climate action, taking a key new step toward meeting its net-zero ambitions.

Many of the 27 EU nations are proud of their intent to become the first continent to hit net zero before 2050. Despite the Ukraine war, there is widespread acknowledgement of the importance of this pioneering goal, with the European Green New Deal encompassing more than 50 major sustainability initiatives since the signature policy agenda was announced by the Ursula von der Leyen-led commission.

This has helped the 27-member bloc rebrand itself as a global green superpower, which it hopes can secure a renewed political lease of life to boot. This after several difficult decades that saw the rise of challenges, such as growing Euroskepticism, and multiple financial crises.

Along this journey, there have been predictable obstacles to delivering on Europes climate ambition. One of these challenges, for instance, is the political backlash (or "greenlash") by the political right, which includes not just populist groups, but also the mainstream conservative European Peoples Party, the largest bloc in the European Parliament.

Conversely, there have been unexpected impediments, too, including Russias invasion of Ukraine.

Another unanticipated blockage to climate action delivery cited by governments is the 1998 Energy Charter Treaty, signed by dozens of nations, which was originally intended to protect international investments in petroleum-rich post-Soviet states.

Outside of the EU, current signatories include Afghanistan, Albania, Armenia, Azerbaijan, Bosnia and Herzegovina, Georgia, Iceland, Japan, Kazakhstan, Kyrgyzstan, Moldova, Switzerland, Tajikistan, Turkiye, Turkmenistan, Ukraine, and Uzbekistan.

This international treaty allows energy companies to try to sue governments over policies that damage their investments. In recent years, the deal has been increasingly criticized by NGOs and some governments for allowing corporates to challenge policy decisions that would see the closure of fossil fuel plants as countries seek to deliver on net-zero.

EU countries have so far been the target of around 90 percent of Energy Charter Treaty disputes, in part because of the regions significant climate ambition. For instance, the EU 27 have embarked on a challenging pathway as set out in the RePowerEU strategy to scale up use of clean energy, while also saving almost 20 percent of energy consumption.

Renewable successes in the first year of this strategy include reaching a record of 41GW of new solar energy capacity installed, and increasing wind capacity by 16GW. This helped generate, for the first time, more EU-wide electricity from wind and solar sources than from gas.

In recent years, a steady stream of EU and non-EU European nations have signalled their intent to leave the Energy Charter Treaty, including Italy in 2016. Most recently, the UK announced last month its departure decision, too.

Last July, the European Commission first proposed a coordinated bloc-wide departure from the treaty by the EU 27 nations. A total of nine member states have so far announced their intent to withdraw from the Energy Charter Treaty since Italy - Denmark, France, Germany, Luxembourg, Netherlands, Poland, Portugal, Slovenia, and Spain. In the meantime, France, Germany, Luxembourg and Poland have officially notified their withdrawal.

On the other side of the ledger, however, a number of other EU countries, including Cyprus, Finland and Hungary, had expressed interest in staying in. Meanwhile, other members of the bloc had pushed for supporting wider international efforts to reform the treaty.

Until February, these splits in the EU had delayed decisive action, but suddenly a breakthrough was fashioned in negotiations this year. What the European Commission proposed last week was that, before leaving the treaty, EU countries should allow reforms to pass at the Energy Charter Treaty conference, expected potentially in November, while allowing the EU and Euratom, the European Atomic Energy Community, to leave the treaty.

This is not just an example of pragmatic politics in action to deliver a deal. It also potentially allows the member governments to revise the ECT in a way that would halve the time (from 20 to 10 years) that non-EU energy firms would continue to enjoy the pacts protections to their investments across the bloc after treaty departure.

The wider agenda for reform of the Energy Charter Treaty includes potentially extending its investor-state dispute settlement provisions to clean tech, such as carbon capture and hydrogen. However, this slate of proposed reforms, which some NGOs and governments still claim still gives too much protection to fossil fuel firms, requires unanimous approval from about 50 nations that are signatories to the treaty. This fell down in 2022 when France, Germany, the Netherlands and Spain prevented the EU Council from approving the potential revisions to the Energy Charter Treaty deal.

What Europe hopes now is that energy firms will increasingly move their investments in the continent to cleaner fuels. EU officials estimate that reaching net-zero emissions by 2050 will require about 700 billion euros in additional investment by the bloc each year, and the role of the private sector is, therefore, key to delivery.

Taken together, the EUs decision to leave the Energy Charter Treaty is widely welcomed by NGOs as another key step on the journey to deliver climate action. Europe increasingly hopes that investment will be redirected from fossil fuels to cleaner energies that will help the region become the first to hit net-zero before 2050, the key goal of the blocs Green New Deal.

SOURCE: ARAB NEWS


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