Norma Foley (Kerry, Fianna Fail) | Oireachtas source

I thank the Senator for raising the issue. 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. I regret that the Minister, Deputy Eamon Ryan, is not present, but I read into the record for the Senator's benefit the reply he has issued.

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 World Trade Organization, 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.

Negotiations to modernise the treaty are currently under way, led by the European Commission, primarily to align with Paris Agreement objectives by reforming the protections provided by the treaty to carbon-intensive energy infrastructure.

The recent ruling by the Court of Justice of the European Union referenced by the Senator has since determined that the arbitration system under the treaty cannot be used to claim compensation in intra-EU disputes.

The court confirmed that despite the multilateral character of the treaty, and the fact that it also governs relationships with non-EU countries, "the preservation of the autonomy and specific character of EU law precludes the Energy Charter Treaty from being able to impose the same obligations on the Member States among themselves".

Since the ruling would likely not preclude the use of the treaty arbitration process for intra-EU cases heard elsewhere in the world, there have been further calls from several member states for a co-ordinated withdrawal from the treaty. It should be noted, however, that there is a 20-year sunset clause under which treaty terms would continue to apply. A co-ordinated withdrawal would, therefore, need to manage this risk.

Ireland's position remains to support the Commission's efforts to negotiate meaningful reform of the treaty in the first instance, while reserving the option to support a co-ordinated withdrawal should these efforts fail and if considered appropriate by Government to achieve our national renewable energy and climate ambitions.