Answer to Written Question: Energy Charter Treaty and EU State aid
(Source: European Parliament)
Answer given by Executive Vice-President Vestager
on behalf of the European Commission
The EU, as a Contracting Party, is involved in the negotiations on the modernisation of the Energy Charter Treaty (ECT), which were initiated in November 2019. In the fourth negotiation round, held in March 2021, the EU presented its proposal to phase out the investment protection of fossil fuels from the ECT. Such phase out would take place ten years after the entry into force of the modernised ECT, but not later than 2040, or, in some instances, as of 2030. All the relevant information in this regard is available on the Commission’s website.
This approach is in line with the European Green Deal and the Commission’s objective in the ongoing revision of the Guidelines on State aid for environmental protection and energy to ensure that public measures contribute to the achievement of decarbonisation, while avoiding undue distortions of competition and trade in the internal market.
The Commission is in the process of reviewing the Guidelines in view of adoption by the end of 2021 as indicated in the Green Deal Communication. A draft text of the revised Guidelines will be subject to a public consultation, where all interested parties will be invited to submit comments. The results of the public consultation will feed into the revision process, including the preparation of the Impact Assessment Report.
At this stage, the Commission cannot describe the future framework. To the extent State aid is involved, the Commission will examine the compensation to companies for the coal phase out, based on the future framework and its case practice. The Commission has already assessed measures taken by Germany and the Netherlands involving compensation for foregone profits caused by the ordered early closure of coal-fired power plants.
 Commission State aid decisions SA.58181 – Tender mechanism for the phase-out of hard coal in Germany:https://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_58181; and SA.54537 – Prohibition of coal for the production of electricity in the Netherlands: https://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_54537.