Climate Change

Energy firms sue four EU countries for disrupting their fossil fuel projects

Energy firms sue four EU countries disrupting fossil fuel

Photo: KitzD66 from Pixabay

Published

February 23, 2022

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Published:

February 23, 2022

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RWE, Uniper, Rockhopper and two other energy companies seek EUR 3.7 billion in damages from the Netherlands, Italy, Poland and Slovenia after their governments blocked coal, oil and gas projects and tightened environmental rules.

The acceleration of the decarbonization process in the European Union will benefit public health and may mitigate the climate change impact, but it is also making long-planned investments in the fossil fuel sector difficult or impossible. Five energy and exploration companies have challenged the decisions of the governments of the Netherlands, Italy, Poland and Slovenia that are forcing them to close coal power plants, block projects or produce environmental impact assessments, the Financial Times reported.

RWE and Uniper from Germany, Rockhopper from the United Kingdom and two other firms initiated cases in which they seek EUR 3.7 billion in compensation, citing the Energy Charter Treaty, the article adds.

There is a sixth case, too, which Austrian Petrochemical Holding launched against Romania “over a petroleum development contract.” The sum remains unknown.

Slovenia’s fracking ban could hurt finances

According to information published in September by Global Justice Now, Ascent Resources is suing Slovenia for EUR 100 million for requiring an environmental impact assessment on its hydraulic fracturing – fracking plans. Moreover, both the country’s government and the opposition have just revealed they are preparing separate amendments to the relevant legislation to ban large-scale fracking.

Fossil fuel companies are seeking compensation under the 1994 Energy Charter Treaty

It isn’t clear whether the latest report concerns the same lawsuits that Balkan Green Energy News already wrote about or, if so, whether there were any changes. All companies that were mentioned are said to be filing the claims under an international agreement from 1994 called the Energy Charter Treaty.

The British media outlet now wrote that Rockhopper sued Italy for blocking the development of its Ombrina Mare oilfield in the Adriatic Sea. It matches the information from September, when the UK firm was seeking EUR 260 million in damages.

RWE, Uniper face losses for having to close coal plants early

According to the documentation cited in the new article, RWE and Uniper launched cases against the Netherlands. The two companies are disputing the decisions that force them to close their coal power plants before planned. In the earlier report, the combined lawsuits were worth over EUR 2 billion.

RWE told Energy Live News that it understands the energy transition and participates in it, but that the Dutch Coal Ban Act from 2019 caused the disruption to its property without compensation.

“Therefore, RWE filed a request for arbitration at the International Centre for Settlement of Investment Disputes in January 2021. In parallel, domestic legal proceedings against the State of the Netherlands were instituted in February 2021,” the German company said.

Disputes under ECT shrouded in secrecy

The litigation under the Energy Charter Treaty is “often shrouded in secrecy, with documents rarely made public,” FT wrote. The European Commission is pushing for changes in the agreement so that it provides certainty for climate action, but without success.

“It is literally insane that the global fossil fuel phaseout is being actively sabotaged by antiquated treaties and corporate greed. The ECT and ISDS provisions are a huge threat to climate action,” said Romain Ioualalen from the Oil Change International campaign. ISDS stands for investor-state dispute settlement.

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