Hildegarde Naughton (Galway West, Fine Gael) | Oireachtas source

The Energy Charter Treaty is a political declaration on international energy co-operation with 53 signatories and contracting parties, including all EU member states, except Italy. It was signed in 1994 and entered into legal force in 1998. Since then, the Energy Charter Treaty has provided a multilateral framework for energy co-operation. It promotes energy security through the operation of more open and competitive energy markets, while respecting the principles of sustainable development and sovereignty over energy resources.

The treaty's provisions focus on four broad areas: the protection of foreign investments, based on the extension of national treatment or most favoured nation treatment, whichever is more favourable, and protection against key non-commercial risks; non-discriminatory conditions for trade in energy materials, products and energy-related equipment based on WTO rules, and provisions to ensure reliable cross-border energy transit flows through pipelines, grids and other means of transportation; the resolution of disputes between participating states and, in the case of investments, between investors and host states; and the promotion of energy efficiency and attempts to minimise the environmental impact of energy production and use. The treaty is, therefore, designed to promote energy security through the operation of more open and competitive energy markets while respecting the principles of sustainable development and sovereignty over energy resources.

While the treaty has worked well for many years, situations and circumstances have changed over time, as they always do. It has been recognised for a number of years that it is necessary to update and modernise the treaty, in particular to take account of the objectives of the Paris Agreement. In 2017, therefore, the Energy Charter Conference decided to modernise the treaty.The modernisation of the treaty aims to address developments in the energy sector, especially in light of the rapid changes that have occurred in recent years and that have brought new opportunities and challenges for the sector. Its modernisation is key to ensuring the treaty fulfils its potential to strengthen long-term co-operation in the energy field and to contribute to enhancing energy security.

The negotiations for this modernisation, when concerning more than 50 different countries, have naturally taken time. I am pleased, however, that they are reaching their conclusion. The most recent round of negotiations, held in May, indicate that the contracting parties are close to reaching agreement on the key reforms. Following a final round of negotiations planned for next week, it is possible that an agreement, in principle, can be announced at the ECT conference at the end of this month.

Ireland's position remains to support the treaty and the benefits to international energy security that it can provide, especially at a time energy security has been threatened, while also supporting the modernisation process to align the treaty with the objectives of the Paris Agreement. Ireland, therefore, awaits the outcome of the final rounds of negotiations planned for this month, while reserving the option to support a co-ordinated withdrawal from the treaty, should these efforts ultimately fail and if such a course of action is considered appropriate by Government to achieve our national renewable energy and climate ambitions.