Category: NetZero and the Just Transition

There has been much finger-pointing on which countries or regions were responsible for the failure to reach agreement on text to phase out all fossil fuels at COP27, with many developed countries expressing their disappointment on the lack of mitigation ambition. Yet many developed countries, particularly within the EU, are themselves concluding new fossil fuel deals, barely before the ink has dried on the Sharm el-Sheikh Implementation Plan. Germany is considering spending €10 billion in investing in 10 new fossil fuel projects, France just restarted a coal plant, and the UK just approved its first coal mine after 30 years.

The Netherlands became the latest EU country to recently announce it would withdraw from the Energy Charter Treaty (ECT). Last week, Spain announced it would exit the treaty, and Poland is also in the process of withdrawal. There are concerns that the ECT locks signatory countries into unsustainable climate policies at the risk of litigation from oil and gas investors. Proposed draft amendments to alleviate this risk are considered insufficient and unclear. At the same time, African countries are increasingly becoming signatories to the ECT potentially tying the hands of government to freely design their climate policies.

The United States may be able to avoid the European Union’s planned border carbon tariff, because of its similar climate targets. This may in turn open the door for a climate club which will have implications for global trade.

The European Investment Bank has reiterated its position that it will not fund any gas projects. The decision comes on the back of a European Parliament resolution expressing a lack of support for the proposed East African Crude Oil Pipeline. African countries have decried the EU’s position as inconsistent and contradictory.