Germany has formally decided to abandon an international energy accord that fossil fuel companies had used to oppose measures against climate change, the country’s energy minister said Wednesday.
The move follows similar decisions by Italy, France, Spain and other European countries to leave the 1998 Energy Charter Treaty, which includes provisions designed to protect foreign investments in a country’s energy sector.
“It’s true that the Energy Charter Treaty is designed and acts against the Paris (climate) accord,” said German Economy Minister Robert Habeck, citing cases brought by German utility companies against the Dutch government’s decision to end the burning of coal.
Habeck, a member of the environmentalist Green party, backed calls by climate campaigners for the European Union as a whole to withdraw from the pact.
A Dutch court ruled Wednesday that German energy companies RWE and Uniper cannot receive billions of euros (dollars) in compensation for profits lost due to the Netherlands’ ban on coal-fired power plants from 2030 onward.
Since the Energy Charter Treaty continues to apply for 20 years after countries quit, the two companies may be entitled to compensation under an international arbitration process that’s due to conclude next year.