Despite COVID-19, many in Brussels – including a green recovery alliance in the EU Parliament and 13 EU Environment Ministers – are pressuring the European Commission (EC) to pursue the rapid implementation of its Green Deal strategy. The EC’s vice-president is insisting in various international newspapers that the COVID-19 crisis demonstrates the necessity to change our society to its Green Deal blueprint.
The EU Green Deal and the carbon neutrality : a sheer utopia ?
Let us recall briefly that the EU Green Deal imposes a drastic decrease of CO2 emissions by 2030 and a ‘carbon neutrality’ by 2050. Behind this expression, there is the hope that most of the energy used in 2050 will be renewable and that the as-tiny-as-possible use of natural gas emissions will be trapped and stored underground by a carbon-and-capture technology. Therefore, what the EU is planning is to reach near-zero emissions in the next 30 years. The drawback is that, although intermittent renewable energies have been strongly promoted by international organisations and countries for almost 50 years (since the first oil crisis), they only account for 3.1% worldwide and 2.5% of the EU primary energy demand. It does not take an expert to understand that moving to 100% is not just a challenge but a sheer utopia. Only a partial cut will be possible and at a high cost.
Past economic models and the current crisis show that degrowth can indeed cut energy consumption and contribute to reducing CO2 emissions. After the confinement period imposed to resist COVID-19, it is likely that such a degrowth-based path will not be the accepted way to achieve the Green Deal. The history of energy clearly shows that nuclear power has made a major contribution to the reduction of CO2 emissions; even the UN-IPCC recognises that nuclear power is a valid solution for decarbonation. Yet the EU does not mention nuclear energy at all in its green strategy.
François Mitterrand and article 194
In the past there was no question of impinging on the sovereignty of Member States regarding primary energy sources. When the Maastricht Treaty was negotiated, Italy, Belgium and the EC, proposed the introduction of a chapter on energy in the new treaty. However, arriving in Maastricht, François Mitterrand, president of the French Republic at the time, had this chapter removed from the draft treaty, arguing that there was no question of leaving the decision on the French nuclear power future to Brussels officials. Subsequently, particularly following the gas crises between Russia and Ukraine in 2006 and 2009, attitudes changed and an inter-ministerial conference succeeded in introducing an article on energy into the Lisbon Treaty.
Article 194(1) of the current EU treaty authorises a series of energy policy provisions such as the promotion of renewable energies and energy efficiency, the creation of a single energy market and the development of interconnected energy infrastructures. But still in the spirit of François Mitterrand, Article 194(2) states clearly that the choice of energy mix remains the responsibility of Member States.
Green Deal vs Nuclear
Now, the Green Deal seems to do everything possible not to favour nuclear power. The rules for Brussels’ control of state aid in the field of energy and environmental protection, known as the “Environmental Guidelines”, allow renewable energy projects to benefit from subsidies. However, these rules do not cover nuclear power, which makes it difficult to set up revenue guarantee contracts for the electricity production of future nuclear reactors to be built. More explicitly, nuclear power has not been included in the European “taxonomy” by the so-called Technical Expert Group on Sustainable Finance, which draws up a list of technologies labelled “sustainable” for investors, financial markets and public banks. On 16 June 2020, the EU Parliament adopted this position without mentioning any technology but it remains that the Commission taxonomy exclude it. Off course, these anti-nuclear provisions are not de jure.
Polish Minister for Climate’s letter
This difficulty is not ignored by the EU institutions. Owing that 16 Members States operate or announced to build nuclear power, in its Conclusions of 12 December 2019 the European Council “acknowledges the need […] to respect the right of the Member States to decide on their energy mix and to choose the most appropriate technologies. Some Member States have indicated that they use nuclear energy as part of their national energy mix”. On 22th June the Polish minister for climate – not energy – wrote to 3 EU Commissioners raising their attention on the contradiction to want to reduce CO2 emission while excluding nuclear energy : “we were surprised when nuclear power was not reflected in the recent EU policies, including the European Green Deal package, while its place in the EU Taxonomy is still under question. […] Therefore, we call on the European Commission, as the guardian of the Treaties, including the Euratom Treaty, to ensure that the EU energy and climate policy is developed in a technology-neutral and evidence-based manner”. While the language is diplomatic the message is very thought : the European Commission is not respecting de facto the treaty.
In the meantime, the United States has fully understood the danger of China and Russia dominating the future production of nuclear electricity. That is why, a bipartisan “Strategy to Restore American Nuclear Energy Leadership” has been adopted on 23th April 2020. They have realized that they have lost their world leaders position in nuclear technology to companies controlled by the Russian and Chinese governments. They acknowledge the under-exploitation of their 1.2 million tons of uranium production, which represents only 7% of the needs of their 98 power plants. The rest is imported, notably from Russia, and this is a drawback for the security of supply. Moreover, the USA has decided to encourage research for technological innovation (Generation IV, SMR, etc.). Last March, the Pentagon signed three contracts for the design of nuclear microreactors, as part of a plan to generate nuclear power for the U.S. in their territory of intervention. The “Project Pele” envisages a prototype of 1 to 5 megawatts to be deployed in areas where US defense will need abundant and safe electricity.
A Green Deal in contradiction with Energy Charter Treaty ?
Conversely, renewable energy is and will be strongly promoted by all means and all EU Institutions. The European Investment Bank announced that it intends to support EUR 1 trillion of investment in climate action and environmental sustainability – read “renewable energy” – in the period from 2021 to 2030. The next Multiannual Financial Framework will significantly contribute to climate action – read “renewable energy” again. The EC announced that its forthcoming proposals will aim at facilitating EUR 100 billions of investment through the “Just Transition Mechanism”. These efforts must continue after 2030 to one aim : supporting renewable energy.
This indeed imposes – even if it is not de jure – renewable energies. Is this, ultimately, not imposing de facto the choice of the energy mix? Is this compatible with Article 194(2) of the Lisbon Treaty?
Furthermore, the Energy Charter Treaty (ECT) signed in 1994, also by the EU and Euratom, aims at protecting foreign fossil fuel investments. It promote energy efficiency but not the use of renewable energy. By far, not all the 53 Signatories are interested in the Green Deal and its aim to abandon the use of fossil fuels. Therefore, the Green Deal seems to be in contradiction with the ECT. This is one more legal difficulty and the simple solution would be for the EU and its member states to collectively withdraw from the ECT. This will have strong consequences for many countries, including former Soviet Union Republics exporting oil and gas. Clearly, this is a legal imbroglio.
Recently Socialist and Green MEPs felt that “Maintaining protection for investments in fossil fuels considerably increases the cost of energy transition” and are concerned about the complaints that are piling up for non-compliance with this international treaty “. They also want to completely distort the treaty: “the protection of fossil fuels should be excluded from the text.” They recognize that the treaty is “not compatible with our climate commitments. This means that Parlamentarians agreed that the Green Deal is indeed incompatible with the Energy Charter Treaty and will remain so, at least in its effects, because if parliamentarians seem to ignore it or do not say so, as Andrei V. explains. Belyi “the ECT ensures that any investor in the treaty’s geographical extent has the right to protect its invested assets even up to 20 years after a state withdraws from the treaty”. It is likely that the considerable financial investiments involved will not allow for rapid progress on treaty amendment. If the EU does not want to hear about fossil fuels at all, it will have to leave this treaty, which will take time, and with the addition of the 20 years we will almost reach 2050. Tomorrow will like today… Nothing will change!
Everything with the Green Deal is so rapidly decided. Would it be useful to take a pause in order to allow legal scholars not belonging to the EU institutions to verify that the implementation of the Green Deal complies with the Lisbon Treaty and to properly weight a potential ECT withdrawal?
Samuele Furfari’s latest work is a 1200-page, two-volume book “The changing world of energy and the geopolitical challenges“. See furfari.wordpress.com
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