Dáil Éireann debate -
Thursday, 9 Nov 2023

Vol. 1045 No. 3

Energy Charter Treaty: Statements

Minister for the Environment, Climate and Communications (Deputy Eamon Ryan)

I am grateful for the opportunity to address the House on the Energy Charter Treaty, ECT. I will be sharing my time with my colleague, the Minister of State, Deputy Ossian Smyth, who has responsibility for the circular economy in my Department. I will update the House on the recent and current situation with the Energy Charter Treaty, while the Minister of State will address the future scenarios arising from the charter as things progress in this fast-moving area of energy policy.

The Energy Charter Conference, an intergovernmental organisation, is the governing and decision-making body for the energy charter process and was established by the 1994 Energy Charter Treaty. All states or regional economic organisations that have signed or acceded to the treaty are members of the conference, which meets regularly to discuss issues affecting energy co-operation among the treaty's signatories, to review the implementation of the provisions of the Energy Charter Treaty and the protocol on energy efficiency and related environmental aspects and to consider possible new instruments and joint activities within the energy charter framework.

The roots of the Energy Charter Treaty date to a political initiative launched in Europe in the early 1990s, at a time when the end of the Cold War offered an unprecedented opportunity to overcome previous economic divisions. Nowhere were the prospects for mutually beneficial co-operation clearer than in the energy sector. There was a recognised need to ensure that a commonly accepted foundation was established for developing energy co-operation among the states of Eurasia. On the basis of these considerations, the energy charter process was developed. In a world of increasing interdependence between net exporters of energy and net importers, it was recognised that multilateral rules could provide a more balanced and efficient framework for international co-operation than was offered by bilateral agreements alone or by non-legislative instruments.

The Energy Charter Treaty and the energy charter protocol on energy efficiency and related environmental aspects were signed in December 1994 and entered into legal force in April 1998. The treaty was developed on the basis of the 1991 energy charter. Whereas the latter document was drawn up as a declaration of political intent to promote energy co-operation, the Energy Charter Treaty is a legally binding multilateral instrument. The fundamental aim of the Energy Charter Treaty is to strengthen the rule of law on energy issues by creating a level playing field of rules to be observed by all participating governments, thereby mitigating risks associated with energy-related investment and trade.

Governments aim to create low-risk scenarios for large energy investments to ensure ultimately low costs for their citizens. A large amount of investment is required, all along the supply chain, to meet energy demand by citizens and society. The international energy charter was based on the idea that international flows of investments, capital and technologies for the energy sector are mutually beneficial. A primary aim of the treaty was to promote the necessary climate of predictability that can attract private sector involvement and, by de-risking this investment, ultimately lead to lower costs of energy for citizens and businesses.

The Energy Charter Treaty aimed to assist this objective by offering binding protection for foreign energy investors against key non-commercial risks, such as discriminatory treatment, direct or indirect expropriation, or breach of individual investment contracts. This was seen as required in states that needed to rapidly modernise while putting in place new judicial, democratic and other institutions at the end of the Cold War. The Energy Charter Treaty covers all types of energy materials and products, inclusive of electricity and energy-related equipment, and the provisions on investment protection apply also to investments in hydropower, solar, wind energy and all other renewable energy sources. The treaty does not create investment opportunities for companies by forcing open access to resources or defining a certain market structure for international energy charter member countries. These are sovereign decisions for member governments.

A second priority for the treaty was to promote reliable international energy flows. This has always been an important issue for Eurasian energy security, since a high proportion of oil and gas in Eurasia is delivered through long-distance pipelines that cross multiple national borders and jurisdictions. Under the treaty, member countries are under an obligation to facilitate energy transit in line with the principle of freedom of transit and not to interrupt or reduce established energy transit flows.

Third, the treaty requires that all member states act to minimise the harmful environmental impact of energy-related activities. The treaty does not have binding targets in this area, but member countries use the international energy charter as a forum to exchange information on programmes and policies that have been successful in improving energy efficiency.

Ireland signed the European energy charter, which was the political foundation for the energy charter process, in December 1991. On 17 December 1994, Ireland signed the Energy Charter Treaty and the protocol on energy efficiency and related environmental aspects. These were ratified on 30 March 1999, deposited on 15 April 1999 and entered into force on 14 July 1999. On 20 May 2015, Ireland signed the international energy charter.

The Energy Charter Treaty provides a multilateral framework for energy co-operation. It is 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. There are currently 53 signatories and contracting parties to the Energy Charter Treaty, including both the European Union and Euratom, including all EU member states except Italy, and the UK, Japan and many former Soviet states. The treaty also provides for dispute resolution procedures both between states themselves and between states and the investors of other states which have made investments in the territory of said states.

The Energy Charter Treaty has come under criticism for its dispute resolution mechanism, which gives investors a right to sue states for failing to protect investments in the energy sector of any kind, and also perceived conflicts with the objectives of the Paris Agreement on climate. All EU countries are parties to the European Charter Treaty, with the exception of Italy, which withdrew from the ECT in 2016. However, countries which withdraw from the ECT remain bound by its provisions with regard to pre-existing qualifying investments for a 20-year sunset period.

In 2017, the Energy Charter Conference decided to modernise the treaty in order to respond to the demands of member countries that found it obsolete with regard to current investment agreements and the climate policy objectives of the European Union to phase out fossil fuels in favour of renewables.

The conference on Modernisation of the Energy Charter Treaty in 2017 mandated a subgroup to prepare a report identifying potential topics for amendment of the treaty to aid its modernisation. This was published in June 2018. It was felt that in the absence of any substantial update of the ECT since the 1990s it had become increasingly outdated. It also became one of the most litigated investment treaties in the world, with EU member states being the principal target of claims by investors, most of them based in other EU countries.

As part of the modernisation the EU proposed the removal of protections for investments in fossil fuels, in order to bring the ECT in line with the Paris Agreement. After 15 rounds of multilateral negotiations held between July 2019 and June 2022, an agreement in principle to close negotiations was reached at the extraordinary Energy Charter Conference of 24 June 2022 in Brussels. This involved reaching agreement on key energy security areas such as the modernisation of investment protection rules, the inclusion of provisions to align with the Paris Agreement and future climate and clean energy agreements and the alignment of energy transit-related provisions with EU Internal Market rules. A headline provision of the agreement in principle removes protection for all new fossil fuel investments, and protections for existing fossil fuel investments will be phased out after a transition period of ten years. A qualified majority vote at the European Council was required to allow the European Commission to approve on behalf of the EU and Euratom the so-called agreement in principle.

Despite efforts to build a compromise allowing the EU and Euratom to take a position at the conference, the proposed Council decision for the EU and Euratom to endorse the modernised ECT did not get sufficient support in COREPER on 18 November 2022. This has led to the situation that the modernisation was neither adopted nor rejected by the Energy Charter Conference. In the absence of an EU and Euratom endorsement of the modernisation of the ECT, the unmodernised ECT, which is not in line with the EU's climate policy, continues to apply.

I have publicly stated previously that the Energy Charter Treaty is not fit for purpose. The removal of fossil fuels and the elimination or reduction of the sunset clause were key asks for Ireland as part of the modernisation process. The Energy Charter Treaty modernisation has not progressed adequately. Therefore, Europe has signalled a full exit from the treaty should be undertaken now that modernisation has not been possible. Throughout this process Ireland has expressed strong views within the EU on the compatibility of the Paris Climate Agreement and the ECT dispute resolution mechanism. We continue to express our views within the EU on these issues and we believe that our views carry more weight in international negotiations by advocating them as part of the European Union.

Ireland has signalled its intent to leave the Energy Charter Treaty, but wants to do so in a co-ordinated way with the other member states. We are engaging with our EU partners on the way forward to achieve this. Ireland is among nine EU member states which have indicated they are withdrawing from the Energy Charter Treaty. Italy left in 2015. The Department is engaging with the Office of the Attorney General on legal issues relating to the withdrawal process, which I expect to bring to Government to align with the co-ordinated EU withdrawal.

Deputy Darren O'Rourke

I welcome the opportunity to address the statements on the Energy Charter Treaty. I acknowledge my colleague Senator Boylan who has done a significant amount of work on the Energy Charter Treaty, including a master's thesis, which very much informs our party policy and these statements.

For a long time we have been advocates of withdrawal from the Energy Charter Treaty. It is a relic of a fossil fuel past. Negotiated in the early 1990s after the Cold War, this international agreement represents a bad deal for Ireland and a worse deal for the environment. It offers so-called investment protection to fossil fuel companies meaning they can employ it to slow down the transition to net zero. Not only does this expose ordinary workers and families to a potential hefty financial burden but, according to the Intergovernmental Panel on Climate Change, it can also erect significant barriers to decarbonisation.

Climate action cannot afford to wait. According to new research released last week, the carbon budget for stopping the earth heating 1.5° could run out in just six short years. In 2018 the IPCC estimated there was only a 50% chance of staying within 1.5° if global emissions were halved by 2030 and reduced to net zero by 2050. As grim as this was, we are now in an even worse position. The earth is speeding towards the catastrophic warming of our planet rather than slowing down. The Government certainly seems determined not to buck this trend.

Under the stewardship of Fianna Fáil, Fine Gael and the Green Party Ireland exhausted almost 50% of the 2021 to 2025 carbon budget in the first two years. We are on track to exhaust 123% of the allocated carbon budget by 2030. By refusing to depart from a business-as-usual approach whereby the markets will sort it out, the Government will almost certainly max out the 2025 carbon budget before it has left office if it does change tack and make progress. By remaining in the ECT we risk billions of euro in potential legal action by fossil fuel companies.

For the health of our environment and our economy Ireland must withdraw from the Energy Charter Treaty. Ireland would not be an outlier if we adopted this approach. The Netherlands, Slovenia, Spain, Germany, France, Italy, Denmark, Poland and Luxembourg have all recognised that the Energy Charter Treaty is not fit for purpose. While other states took definitive action to reinforce their commitment to decarbonisation and protect ordinary workers and families from the damage that the diversion of State funds to fossil fuel companies could inflict on them by withdrawing from the Energy Charter Treaty, this State, under the guidance of the Minister, Deputy Ryan, has continued kicking the can down the road and deferring to others to make a decision for it. The direction of travel has been clear for some time yet the Government has continued to bury its head in the sand.

In November 2022 the European Parliament voted with a majority of 100 votes to leave the Energy Charter Treaty. A letter was issued from 280 EU parliamentarians which made clear the ECT is a serious threat to Europe's climate neutrality target and, more broadly, the implementation of the Paris Agreement. In February 2023 a leaked communication from the European Commission signalled that a collective EU withdrawal from the ECT appeared unavoidable.

Despite this, the Irish Government has refrained from taking a clear position with clear timelines. Although we welcome the fact that the Minister, Deputy Ryan, has confirmed that Ireland will pull out of this dangerous trade deal via a co-ordinated withdrawal, it is essential to point out that the Government only did so when moves were made at European level. The delay and dodging of definitive action is a hallmark of the Government. Let us not forget the windfall tax. Whereas other EU states were quick to implement the measure, this Government's persistent delays resulted in potentially billions in lost revenue. History is about to repeat itself.

As other EU states prepare to deliver a strong message about their commitment to climate action via a withdrawal from the ECT, the Irish Government and the Irish Minister continue to dither. I call on them to provide urgently clear detail and a timeline for Ireland's exit. Make it clear this is not yet another empty commitment. This would serve to further strengthen the EU's ability to carry out a co-ordinated withdrawal, for which a majority is needed and, thus, Ireland's clear intention is essential.

This is not an issue on which we can wait. We are already starting to see the impact of complacency. In fact, there is already one legal challenge against the Irish State with many more at risk of following.

The investor-state dispute settlement, ISDS, mechanism is a provision of the ECT. The ISDS allows investors to seek compensation for damages resulting from government actions that negatively impact their investment. It is a closed-door investment tribunal with no appeal mechanism. There have been 158 investment arbitration cases under the ECT, but these have exploded in number over the past ten years. EU states are the target of 90% of these claims. Significantly, the payments awarded to fossil-fuel claimants tend to be disproportionately high, something we would think the State would want to avoid.

The ISDS is the provision that puts billions of euro on the line and threatens to usher in a new era of regulatory chill when it comes to climate action. We do not have to look very far to justify the position of Sinn Féin and many in the Opposition. For example, the Dutch had a short-term energy problem as their country was over-reliant on gas and prices went through the roof. In 2009, coal-power plants were invited into the Netherlands, and these opened in 2015 and 2016. To reach the country's climate targets, the Netherlands recognised that it was necessary to phase out these plants by 2030. In 2021, the Netherlands was hit with two claims under the ECT to the tune of €2.4 billion. When Italy denied a new licence to allow for exploration for offshore oil, in line with legislation to facilitate the energy transition, it was issued with a bill of €190 million. Here in Ireland, Lansdowne Oil and Gas plc, a partner of Barryroe Offshore Energy, is challenging the Government on its decision not to grant a licence that would have been inconsistent with our climate targets.

As if all that was not bad enough, a joint investigation by The Guardian, the Transnational Institute and the Berlin-based PowerShift, made public in mid-November 2022, revealed the ECT processes are mired in dodgy dealings, with opaque proceedings, inadequate controls on conflicts of interest for key personnel, including arbitrators, and that this was exacerbated by what the investigators cited as a potential bias in favour of fossil fuel interests. Is this really the type of proceeding the Irish people should be a party to? Surely not.

It is also clear that modernisation attempts have failed. The urgent need to kick-start the withdrawal process is exacerbated by several factors. Not the least of these is the controversial sunset clause that allows lawsuits to be filed 20 years after the departure of a member. For example, Italy left the ECT in 2015 but was successfully sued in 2022. The longer the Government drags out this process, the more generations of Irish workers and families it will expose to this treaty. Continued membership of the ECT also poses potential risks to Ireland's future energy security. When war broke out in Ukraine last year, it exposed just how vulnerable this State is to the volatility in the international energy markets and reinforced the need to radically reduce our dependence on fossil fuels and become energy independent.

Ireland imports a little over 70% of the energy we use. This far outstrips the EU average of 58%. Despite seemingly having ample resources of wind, Ireland is still heavily dependent on oil. The latest statistics have revealed that oil accounts for 45% of primary energy needs, while gas accounts for a further 34%. All the oil used in Ireland is imported, as is three quarters of our gas. This makes clear just how dependent Ireland is on the whims of other states and on private energy firms to keep our lights on and our economy moving. Despite having an almost unlimited amount of renewable energy off our coast, successive Fianna Fáil and Fine Gael-led Governments have completely failed to harness this opportunity. For decades, their policies on renewables were defined by inaction and paralysis, favouring instead the further entrenchment of fossil fuels. This was and is not good enough.

Renewables have the potential to become the dominant players in Ireland's energy mix. To be fair to the Government, it has certainly at least started to ramp up efforts in this regard. It is certainly adept at setting lofty targets dressed up in fluffy rhetoric. In reality, though, delivering those targets is something the Government falls far short of.

As an example, let us take the latest renewable electricity support scheme, RESS, auction. The third auction for onshore wind and solar power delivered the smallest volume at its highest-ever price. Some 33% fewer renewables will be harnessed for a cost 25% higher than RESS 1. This is not just a lack of progress. Under this Government's watch, Ireland is actually going backwards. The RESS auctions are supposed to represent a key Government policy to deliver the climate action plan. The latest results make it abundantly clear that this is not a credible strategy. According to Wind Energy Ireland, we are less likely to reach our 2030 targets than we were this time last year. When we should be ramping up activity in this area, Fine Gael, Fianna Fáil and the Green Party have decided it is time to slow down. This is simply not good enough.

It is not just failed auctions we are contending with. No wind project has been awarded planning permission for more than a year now. The average waiting time for a decision to be made is a staggering 92 weeks. It is supposed to be 18 weeks. Moreover, many RESS contracts are timing out because a grid connection cannot be secured in time. Many community-owned projects are also failing due to a lack of support from the Government. Of the seven community renewable projects successful in RESS 2, only four are still involved in the process. There is also a significant question mark over several of these projects. These are projects desperately needed, that must be delivered and must be delivered on time. There are fundamental questions here in terms of the grid and planning, but also regarding the ownership model and the returns for communities and the State. These are fundamental questions around our energy system here. Another fundamental element of this context is the role of fossil fuels and the powers the ECT gives to fossil fuels companies. It is a relic of a fossil fuel past and Ireland should show leadership and leave it.

Deputy Ged Nash

I am glad we are finally getting around to having a debate on this topic. At the outset, I state that the Labour Party supports withdrawing from the ECT. This is one of those rare instances in which the Government and the Opposition are, broadly speaking, in agreement, though we may disagree on the mechanics, so to speak, regarding how we get there. We in the Labour Party have numerous concerns regarding the ECT. Our environmental concerns are perhaps the most straightforward.

Put simply, as others have done, the ECT, as the Minister said himself, is incompatible with our climate goals. It is incompatible with the Paris Agreement. How can we expect to reach our targets and make real progress on dealing with the climate emergency if we, effectively, hand fossil fuel companies a gun to place at our heads if we take actions, as we should be doing, that might affect their investments? Of course, that is what the ISDS mechanism provided for in the treaty is and does. It is a weapon these companies can and do use to protect their corporate commercial interests to the detriment of everybody else.

We have seen a German company sue the Netherlands for €1.4 billion because of that country's decision to phase out coal by 2030. Slovenia has been hit with a €500 million lawsuit by a fracking company after banning the practice. Italy, the first country to withdraw from the ECT in 2015, has been taken to the tune of €240 million by a British oil and gas company, thanks to the treaty’s sunset clause, after it banned offshore oil drilling. All these measures taken by those states were the correct decisions. They were good steps towards meeting the ambitions of the Paris accords. There were also democratic steps. Yet these countries have been punished for taking them because the ECT, by definition, places fossil fuel investor protection above climate protection. The treaty, as the Minister outlined earlier regarding its history and context did deal with the needs of the day, but it is now in direct conflict with the needs of our day and our tomorrow; that is, the urgent need for us to take drastic action on climate change. We cannot have companies that profit off climate destruction using the ISDS-style provisions contained in the ECT to threaten countries from taking the vital actions we need. Indeed, we have already had the pleasure of being on the receiving end of one of those threats from an oil and gas company after the Minister, correctly I might add, refused to allow further exploration at the Barryroe oil field.

As the Minister outlined as well, I know the Government's position has been to work in tandem with the EU on a co-ordinated withdrawal of member states, and it is welcome that the EU has announced its intention to, effectively, do that. However, I fail to see the logic in the Government’s position, even in the terms in which the Minister set it out today. It seems to me we are seeing another example of the Government waiting and seeing. This has been a common trend. I refer to the Government divesting itself of responsibility and effectively subcontracting decisions to the EU that could just as easily be made domestically.

I do not see the point in waiting for the EU to move when the end result is going to be exactly the same. It is just a case of kicking the can down the road. Germany, France, Slovenia, the Netherlands, Luxembourg, Spain and Poland have already announced their intention to withdraw unilaterally. Italy, as I have mentioned, withdrew years ago. There is nothing to stop us from doing the same, outside of the political will.

That brings me to my second point, namely, the legal aspect of all of this. I am uncomfortable, to say the least, with the idea of a company being able to sue a state via a court that lacks democratic oversight. These are effectively private tribunals that operate beyond the reach of ordinary domestic or European law. We thankfully have a functioning and, crucially, independent domestic courts system and the separation of powers that we cherish ensures that. There is also, of course, the European Court of Justice. We have strong, well-established, fair and equitable judicial and courts systems in this country. Why would we side-line our own legal system in the interest of protecting the fossil fuel industry? It is effectively diminishing the powers of those courts.

It is worth noting that the ISDS mechanism allows for claims to be made by companies either through arbitration or through the host state’s courts. Most companies choose arbitration through private tribunal. That is quite telling. It is also telling that the ECJ has ruled that the treaty cannot be used in intra-EU disputes because the process undermines the role of EU courts. Of course, the Washington Convention provides that the investor court decisions are enforceable in any country where the state has assets. To my mind, that simply underscores the need for us to remove ourselves from this treaty sooner rather than later.

Ultimately, there is an anti-democratic element to this that should be of concern to all of us. Not only does the ISDS mechanism undermine the rule of law, as I have already said, but it undermines the legislative process. To think a company should be compensated for the State acting progressively and for the common good, in other words, operating under our democratic mandate, is objectively ludicrous. We need to be able to produce legislation that will deal with the climate crisis unimpeded. Indeed, all countries do. We need to be able to continue to do that. We cannot afford to have governments watering down positive climate action out of fear of being sued by private interests - interests that are doing direct damage to our environment.

I am going to quote the Minister. Earlier this year, he said, "The Government continues to reserve the option of supporting a co-ordinated withdrawal from the treaty if it is not modernised to align with the Paris Agreement, does not address our concerns, or does not support the international effort to decarbonise electricity systems and promote more renewable energy." That is still his position. Negotiations to modernise the treaty have failed and on the points that have been the subject of negotiations, where we are at at the moment, the conditions the Minister has set out have not been addressed. I urge the Minister and the Government to push forward on what the Labour Party proposes, and on which there is a general consensus here, at least on the Opposition benches, which is to push forward on a unilateral withdrawal from the ECT. Others have done it. I do not believe there is any point in waiting.

Deputy Richard Bruton

I welcome this debate. It is timely. Other Deputies have well articulated the defects in the energy charter treaty. It is important to recall, as the note from the Oireachtas Library and Research Service has underlined, that this emerged in the early 1990s in the wake of the opening up of eastern Europe and following the collapse of the Soviet Union. There were genuine desires to see integration east-west so that energy in particular would be a basis not only of co-operation and mutual benefit but so this could be done in a way whereby people would have mutual reassurances that if they did make those investments, their investments would be protected. Having investments running outside the European Union and into other countries to underpin energy security is a sensible idea. The issue that has arisen here is that the context in which the energy charter was drawn up has radically changed with the climate agenda. Other Deputies have rightly pointed out that it is no longer consistent with that. Its provisions are clearly dated. They do not underpin the environmental and climate challenge in anything like the rigorous way we would now want. There have also been rulings stating that when it deals with two member states it is inconsistent with the treaties on which the European Union is founded, so to take a dispute resolution under this treaty among two member states would not be robust.

While it is easy to see the flaws and the need to move on and withdraw, as the Commission is now recommending, we need to go back to some of the deeper principles here to consider what we need to do to replace this. It certainly seems to me that as we look to the future we will continue to need to build networks and have both public and private investment, not necessarily all from within the European Union, in order to secure the sort of renewable energy transformation we all want to see. When we move away from this, we need to ensure people can invest in confidence. From an Irish perspective, with this very substantial wind asset we hope to develop, it is absolutely crucial that we have these interconnections into other jurisdictions. Our nearest island, where we have forged significant interconnection, is not a member of the European Union. I do not think issues arise as to the security of mutual investment between ourselves and the UK but as international co-operation develops and as we seek to harness global renewable sources and do it in the most cost-effective way, we are going to see changes.

I recently read an article by Eddie O'Connor which set out the challenges of building those new networks if we are to do so efficiently. We need to think about what sort of underpinning will be needed to attract both the public and private capital for those investments. That is a very significant issue not just in the energy sphere but in other areas where we have to make transformative change. We have talked about forestry, for example. We clearly have not yet reconciled how we will have international and national investment in the forestry sector that is consistent and supported. We had a lot of controversy about the investment that I think was developed in good faith with a private body but the feeling was very strongly expressed in this House that support of that nature should be confined to farmers. We need to attract money into investment to create the transformative change that will be needed across so many sectors. We need to think about how we are going to secure that. This charter is redundant but I do not think we in Ireland have yet worked out the approach we should adopt in attracting very substantial amounts of investment for the transformation we need.

The corollary of that, of course, is how we address the issue of just transition. At the heart of what is happening here is that we are being obliged to turn away from sectors we allowed to develop to a very considerable scale, whether we did so wittingly or unwittingly. I do not think anyone would be fully satisfied with how we have managed the exit from peat, which is a particular case in context. The exit was driven to a considerable extent by the courts. I was in government at the time and we created the role of the just transition commissioner and we tried to manage that change. Clearly there is unhappiness when we do not plan this sort of change sufficiently in advance. When a change like that happens as a result of a court decision, there is considerable fallout for people who have been making their living and considerable hardship.

At the same time as we say goodbye to an energy charter treaty with all its flaws, we need to understand better what principles we will apply to the future in creating a just transition for the many people who are going to be profoundly impacted by the transformational change. The exit from peat is only the foothills of the sort of change we are going to have to envisage. We need to see the legislation underpinning a just transition commissioner and those principles.

Clearly the State cannot compensate everyone. It would be extraordinary to pretend the State can compensate people for all the stranded investments or stranded practices that have to be abandoned. Nonetheless, we have to develop some principles that will be seen as fair and will give people the confidence to see a future for themselves as they move in another direction.

We still do not have a picture of what prosperous farming will look like in ten, 15 or 20 years so that people can have confidence that, as the State undertakes major transformational change, they can see a future for themselves in it. We need to think more in this House about what policy tools will be put in place to smooth the transition we have to make to ensure people will not find they are being continually frustrated and facing protests and attempts to undermine necessary change. While I absolutely recognise the need to say goodbye to the Energy Charter Treaty and some of its principles, we need to develop new principles that can give investors here and overseas investors who choose to invest here the confidence that this transformation is underpinned by principles of fairness and equity, which was the original thinking behind the treaty.

I welcome this debate because it is timely. We need to think more deeply about the transformative change we are undertaking. I commend both the Minister and the Minister of State on the work they are doing and the plans and policy initiatives they are putting in place, but the wider framework needs the support of both the Government and the Opposition so we can see a context in which difficult changes can be adopted and implemented by Ireland and we can genuinely lead in the green transition.

Deputy Martin Kenny

We are glad to be hear today to speak about the Energy Charter Treaty. The concept of close negotiations and close co-operation between different countries on the movement of energy and development of energy resources has huge merit and a place in the modern world. However, this treaty should have been called the fossil fuel energy charter treaty because it is primarily or solely about fossil fuels. That brings me to the point Deputy Bruton made that the treaty was positive in its time. I somehow wonder whether that was the case because the fossil fuel industry is a big industry. It involved big corporations making maximum profit at a time the Iron Curtain was coming down and new opportunities were opening up across eastern Europe and in Russia. Many of the big corporations saw advantages and prospects for themselves and this treaty was about guaranteeing their future. That is one of the difficulties. As we develop other industries in green energy, including wind energy, solar energy and so on, there is a lesson to be learned by us, namely, that we should ensure that they are not dominated by big corporations that will want to protect their interests as they move forward.

The work that has been done and the renegotiations that have been attempted were welcome to some extent, but it is clear that this treaty needs to be consigned to the dustbin of history. We need to do so as quickly as possible. I welcome the commitment at the end of the Minister's statement that Ireland will do that and that he has spoken to the Attorney General about it. However, it is a problem to wait for everyone in the EU to move together. We should try to move with haste on it and set the example. We do not always have to be in unison with everyone else. Sometimes we can put our best foot forward and be the leaders and, in this case, there is an opportunity to do so.

We recognise that many of the elements of the treaty were about protecting big business and corporate interests. The way in which they could sue states for the a loss of opportunity due to policy changes is one of the issues we need to be careful about as we move forward, to ensure nothing like that appears again in any future treaties being signed up to, whether they be international trade treaties or European treaties. There is a lesson to be learned in that respect.

Today in Ireland, many ordinary householders want to contribute and be part of the climate change effort and the green agenda, yet they find the support is not available for them to do that. That is one of the big issues we have to recognise. Unless ordinary citizens can feel they are being supported to do their best and to put their best foot forward, we will have a problem. It is all well and good to have supports and agreements in place internationally for big corporations, but when ordinary citizens feel left behind, we will not move forward and achieve what we set out to achieve. Ultimately, the prospect of a green transition and a just transition, moving people to alternatives, is clearly what has to happen.

Agriculture and land use is a major part of that. At a committee meeting yesterday, officials from the Department of Agriculture spoke about some of the measures they have put in place. I put it to them that large intensive farming is the part that engages least with many of the measures. I asked how that can happen and what can be done about it. They basically said it was all voluntary so it is up to farmers to undertake the measures if they wish to. I am not suggesting that a big stick needs to be taken out but the Government needs to come up with other ways of ensuring that those who farm most intensively, with the least biodiversity to their farming practices need to be brought on board and shifted into a space where there will be an opportunity for them to be part of the evolution towards a greener, more sustainable, biodiverse and rich means of agriculture and of producing food into the future. We need to do that as quickly as we can.

The issue of energy is paramount because we can all do what we can in our local areas. All citizens can do what they can but energy is big business and if big business is protected to do what it does in the way this treaty set out to protect it in the past and that is the model for the future, we will have a difficulty. We need to recognise that. I welcome the Minister's proposal to pull out of the treaty but I suggest that we do so at haste and not wait to do so in unison with the rest of the EU.

Deputy Jennifer Whitmore

I welcome the opportunity to have this debate today. We are three and a half years into this Dáil term and it should have happened a long time ago. We should have had these statements and the commitment from the Minister at the start of the term. I wonder whether the Minister, his party colleagues and his advisers sometimes sit and scratch their hands and wonder, despite bringing in a landmark Act, which the climate Act was, why we are still seeing emissions go up. Despite the efforts the Minister made at the start of the term, we are not really seeing the reductions we need. There are many reasons. I spoke previously in this Dáil about those reasons, one of which is the failure to implement and deliver on policies. I have often said that developing policies and proposals and writing press releases is not climate action. The Government needs to deliver on them with tangible actions.

I will use the rooftop revolution as an example. We were told a year and a half ago that there would be a rooftop revolution across every school and a year and a half later we do not have a single panel on a single school. However, there is a more fundamental reason we are not seeing the kind of reductions in emissions we need to see. It is that we see climate change as the problem. Actually it is not the problem; it is a symptom of a much bigger issue. Climate change is a result of the economic system we operate in, which sees continued unchecked growth as its objective.

Until we have a shift in our thinking when it comes to that, we are not going to be able to resolve our climate change or biodiversity issues because the current economic system does not value the environment. It sees corporations' profits as the almighty. That is the objective and the protection of corporation interests is, in many instances, the priority of this system. Unfortunately, governments, including the Minister's, kow-tow to that in many instances and facilitate that kind of thinking when it comes to big businesses. The ECT is a perfect example of where the interests of big business and big fossil fuel companies are put above the interests of the environment or, indeed, of individuals within our communities. We do need a healthy economy - I think we would all agree on that - but we also need a healthy environment, and prioritising short-term economic gains for a very small minority of individuals or corporations, at the expense of a sustainable future, undermines our very survival.

We heard how, when the treaty was first being developed, it was done in the absence of knowledge we have now regarding climate change, but I would argue the opposite. Climate change was a reality in the 1990s as well. There was evidence to that effect and scientists were raising alarm bells at the time regarding climate change. I think the treaty was designed to protect fossil fuel businesses and governments that knew what was potentially coming down the road regarding the need to protect our climate. It is unfortunate we engaged at that time, but engage we did.

What is more difficult to explain, however, is why the Minister has not done anything about this since he came into power, whether in the previous term when the Green Party was in government or at least this term. Since 2020, the Social Democrats and other Opposition parties have been calling on the Minister to exit the ECT. He has repeatedly stated he wants to do it in a co-ordinated fashion, in conjunction with the remainder of EU countries, but that does not make sense. Italy left in 2016 and the Netherlands, France, Germany, Poland and Spain left in 2022, while Luxembourg in June of this year wrote to notify that it will be exiting the treaty. What does Luxembourg know that we do not? Why is it not hanging on for a better opportunity for a co-ordinated exit? I do not understand why we are waiting.

The Minister stated he has signalled his intention. Has there been written notification of that? Once that written notification goes in, it will take a year before it is recognised and then for a further 20 years we will be caught up in the sunset clause. From the point of the Minister putting in that written notification, therefore, there will be 21 years in which fossil fuel companies will have an opportunity to sue the Government for policy decisions it is making that are based on science, the impact of climate change and the need to protect our citizens and communities from climate change. Those companies will still be able, in a secret court, to sue the Government. Why, therefore, is it waiting? There appears to be no benefit to waiting but many risks, and the longer it delays, the greater the chance we will be sued again, such as in the case of the Barryroe oil field, in respect of which proceedings have begun.

Will the Minister set out his pathway? When he says we are leaving this and that he is signalling his intention, what does that mean? Will he spell it out for us? When will he write and formally notify as to our intention to leave? It needs to happen immediately and I ask the Minister to see that it will.

Deputy Ruairí Ó Murchú

This seems to be one of those circumstances where there is general agreement throughout the House. The Minister, towards the end of his contribution, spoke about how this ECT is not fit for purpose and indicated we need to leave it. Deputy Whitmore went through the ins and outs of it being fine that we try to do our best to do it in a collective way with some of our European partners, but it looks as though many of our European partners have decided this is a bad deal. There is no point getting stuck in ISDSs with all those challenging chilling effects on any progressive legislation the Government might like to introduce, and there is also the fact the Government could be sued by major energy companies.

Some arguments have been made about the fact this was introduced in 1994, when we were dealing with changed political circumstances, given several countries had come into being after the fall of the Iron Curtain. The point was made that this was about protecting those that would make necessary investments. Nevertheless, we were talking about some of the biggest energy companies in the world, which were not without resources.

Moreover, this highlights the issues that exist with ISDS mechanisms. Many people will be aware of the case Philip Morris, the tobacco conglomerate, took against Australia, which just shows how exposed a government can be. When we are talking about energy, the main point is that the charter deals very specifically with fossil fuels. It does not make sense in any way, shape or form that we would any longer leave open the possibility we could be sued as we try to make those necessary changes, which I am sure the Minister and the Minister of State would completely support, as we try to move away from fossil fuels and make those absolutely necessary moves to decarbonisation.

I cannot see any logic as to why we would sign up for CETA and an investor court system that will leave us open to similar issues. As we all know, there has been much consideration in the public domain, and probably even a bit in the Minister's own party, in regard to this. Even what has been said is enough of a damning indictment of ISDSs. States should not leave themselves open to being sued by big corporations on the basis of trying to do the right thing legislatively. That is just not good enough. Even if there is some element whereby it slows us down, it is just not good enough. We are all aware of the disaster of the sunset clause, which the Minister mentioned. Italy, which has left, still has to deal with the ramifications of what it had signed up to. None of this is good enough.

In fairness to my party colleagues sitting next to me, I do not know how many times we have been in the Chamber talking about the possibilities of Ireland being a wind superpower while, at the same time, auctions are not going to plan. A huge number of companies that have previously considered investing in offshore and onshore wind are just not sure at this point. We need to make those necessary moves to being a planning-led system away from being a developer-led system, but we need to make sure it will be done as seamlessly as possible, with any anomalies or difficulties that exist in regard to the planning process dealt with. Obviously, people have a right to make observations and we need a system that will allow for accountability, but it needs to be seamless in respect of how it operates and it has to be timely, something we have not been able to deliver for those who have looked at making necessary investments.

The Minister will not be shocked that, when we are talking about new forms of energy, renewables and so on, I am going to raise the feasibility study for shallow geothermal solutions. I had thought it was to be published at the end of last month but I have not seen sight nor light of it in the context of a solution for Carlin Hall. District heating systems are one of the means of delivering some of the solutions we need but there is a problem with gas-fed communal systems. Can the Minister chase up and find out what the information is to ensure we can get it out to all the residents and stakeholders necessary to deliver on it, with grant schemes that can also deliver a solution?

Deputy Paul Murphy

I thank Deputy Pringle for pushing consistently for this debate because it is very important. It should have been about a formal announcement by the Minister, Deputy Eamon Ryan, that Ireland was immediately withdrawing from the Energy Charter Treaty. Unfortunately, it is not. Italy, Germany, France, Poland and Luxembourg have all already formally withdrawn. Ireland said it plans to withdraw but has not yet done so. The European Commission recommended a co-ordinated withdrawal by the whole of the European Union. The question is why on earth the Irish Government and the Green Party in that Government are dragging their feet on this matter. The argument I heard earlier from the Minister was to point to the 20-year sunset clause under which, even when a country leaves, it can still be sued for another 20 years. That is not an argument to stay; it is an argument to leave as quickly as possible so the clock starts on that sunset clause.

Rapid withdrawal is more urgent than ever. Every day, the amount of carbon in the atmosphere rises and the climate crisis worsens. The State is being sued for up to $100 million by Lansdowne Oil and Gas after the Minister quite rightly refused to grant it a lease for further oil exploration. Lansdowne Oil and Gas is owned by Larry Goodman. We are talking about a greedy, amoral billionaire demanding millions of euro off the public because he is not allowed to blast millions more tonnes of carbon into our already dangerously overheated atmosphere. He is suing us for not being allowed to cause more floods in County Cork, more devastating heatwaves across Europe and more hurricanes and climate refugees across the world. Every day we remain a member of this outrageously anti-environmental and pro-big oil and gas treaty exposes us to further costly litigation through its investor state dispute system. It is an entirely illegitimate system of secret, private courts that favour the interests of profit over the interests of humanity and our interest in living on a liveable planet. All over the world, states trying to transition to renewable energy are being sued for billions of dollars through these secret courts. An international cabal of fossil fuel speculators and greedy, disaster-chasing corporate lawyers and vulture funds finance these cases in the hopes of multimillion-dollar payouts, creating a massive chilling effect on climate action. Oil, gas and coal firms have so far been awarded more than $100 billion by Energy Charter Treaty tribunals, a staggering and outrageously unjust figure. It is estimated that states could ultimately have to pay out up to $1 trillion in total to fossil fuel companies under the Energy Charter Treaty to compensate them for not burning up our planet and not causing even more climate chaos than they already have. This is madness. It epitomises this upside-down system of capitalism.

We in People Before Profit say not a penny to the oil and gas companies that covered up for the terrible damage they have done to our climate and have known about for decades, since the 1970s. It is they who should be paying compensation to us, the public, not the other way around. They should be paying compensation to future generations and reparations to those most impacted by the climate crisis today - the poorest countries and people in the world. Just 100 companies, overwhelmingly in the oil and gas industry, are responsible for 71% of all carbon emissions since 1988. If we are to have any hope of getting to zero emissions in time to prevent total climate catastrophe, which would mean mass extinction for millions of species and suffering and death for billions of people, we must expropriate, not compensate, fossil fuel companies. We must take the energy system as a whole into democratic public ownership so we can plan for a rapid and just transition to renewable energy. We do not have a hope in hell otherwise. It is a case of eco-socialism or extinction. We cannot allow the Energy Charter Treaty to stand in the way of the vital climate emergency measures we need. We need a formal withdrawal as quickly as possible. We need it immediately and the Government could do it.

Ireland should publicly announce its support at COP28 for a fossil fuel non-proliferation treaty involving a complete global fossil fuel phase-out. This is being called for by a coalition of small island states and leading climate experts. It should be the number-one priority for the Green Party in Government given that its justification for propping up Fianna Fáil and Fine Gael was the opportunity to take meaningful climate action. It is now four years since the Government blocked People Before Profit's climate emergency Bill. It did so by citing the threat of legal action by fossil fuel companies as one reason for opposing it. What have the Government and the Green Party done since to mitigate that threat by, for example, withdrawing from the Energy Charter Treaty? Absolutely nothing. It is very clear what should happen. We should withdraw from the Energy Charter Treaty now and state publicly that Ireland will not compensate any of these major corporations, especially not a corrupt billionaire like Larry Goodman, for destroying the basis of life on this planet.

An Leas-Cheann Comhairle

I call Deputy Joan Collins. Are there Government speakers here? I will come back to them as I have no names down here.

Deputy Bernard J. Durkan

I am sorry about that. We will wait.

Deputy Joan Collins

I am pleased that the Energy Charter Treaty is being discussed. Only one Government speaker has spoken on this matter so far. This is one of the most important issues facing Europe and the world. I know there are two speakers coming in to speak now but I would have thought there would have been more Green Party speakers.

Deputy Bernard J. Durkan

They were encouraged.

Deputy Joan Collins

I cannot emphasise enough the importance of discussing the Energy Charter Treaty. I raised this issue twice last April, once with the Minister, Deputy Eamon Ryan, and once with the Tánaiste. I was none the wiser about the Government's stance on the obvious detrimental effects of this treaty other than that it would hide behind the EU for political cover. During Leaders' Questions, I put it to the Tánaiste and he said it was clear, there was no doubt the direction of travel by the European Commission and most, though not all, member states of the EU is towards net zero. It seems that after years of failing to meet our already woefully inadequate climate targets, Ireland will fall into the category of "not all" with regard to moving towards net zero. I asked for the chance to make statements on this issue then and I am glad we have the chance to do so now. Back then, I raised the case of the German company, RWE, suing the Dutch Government for €1.4 billion for phasing out coal, despite the fact that RWE itself was undergoing a phasing-out of coal. A case has been taken against Ireland, as was mentioned, for $100 million by Lansdowne Oil and Gas, owned by Larry Goodman, who is part of the 1% who own most of the wealth in this country.

We are facing a climate breakdown and possibly the end of life on this planet, at least as we know it, in the not-too-distant future. We saw the devastating effects across the country over the past few weeks. Globally, the consequences of our failure to act on climate are becoming clearer. Island countries are disappearing, countries are being battered by extreme weather events and flooding and drought and famine will continue to get worse until we start to take real action to address the underlying economic conditions at the heart of this climate crisis.

We live on a finite planet yet we continue to prop up a failing economic model that cannot exist without constant growth and profits. Most of that growth and those profits go to an increasingly small elite of billionaires at the top of society. Why are we not stopping to think? Why do we allow the economic system, which is destroying our planet, which caused the 2008 banking collapse and enforced austerity on all of us and which daily immiserates billions in the global south and fails to even produce a decent standard of living for most in the global north, to continue? There is no way out of this climate crisis without a serious, radical redress of how our economic system works. At the heart of this is profit. Profit rules the world. It has eaten away at living standards and is destroying our planet. Despite this, the Government has clung to an energy treaty which allows multibillion-euro fossil fuel companies, which are making record profits out of destroying our planet, to sue us for restricting their ability to make even more money out of destroying the planet.

Was the chance of losing €100 million in taxpayers' money not enough to get us to withdraw this summer? That is €100 million in taxpayers' money that could be paid to a fossil fuel company for lost profits while we miss climate target after climate target, for which we have to pay more taxpayers' money.

Not only do we need to end this constant profiteering which is destroying the planet; we should not be party to any treaty that allows billionaires to sue us for lost profits, be it CETA, T-TIP or the ECT. Not a cent of taxpayers' money should go on lost profits. The people of Ireland do not want it and have made that clear. The modernisation process of the treaty has failed. Countries are leaving in their droves, including Italy, France, Germany, the Netherlands and Spain. There is no support left for this treaty.

The Government needs to stop hiding behind the EU, leave the treaty, start taking the real steps needed to tackle the climate crisis before it is too late and make the fossil fuel companies and billionaires who are destroying this planet pay for it. The comment made by the previous speaker was very appropriate. We should be talking about appropriation, not compensation.

Deputy Bernard J. Durkan

I am glad to have an opportunity to speak on this subject. I apologise for my absence over the past number of days. The process of Committee Stage of the Finance (No. 2) Bill took priority over dealing with many of the issues that have been referred to by speakers in the House.

This is an important issue. We have responsibilities and obligations, and we do reasonably well in achieving the targets despite the fact that we are lectured from time to time by various people who feel they will not be affected by the outcome. Everybody will be affected by the outcome and cost of putting in place the measures that everybody else directs somebody else to undertake.

I want to speak about a very simple issue, namely, reducing our dependence on energy and emissions and co-ordinating the programme in such a way as to make it acceptable to the people who elect us, whoever they may be, in urban or rural Ireland. There is a theory in some sectors that this is something that rural Ireland is responsible and needs to be condemned for. It is not. There is a theory that if we abolished all agricultural production and imported all of our food, vegetables and so on, we would solve the problem. We would not. The answer is that we are all responsible and all have to do our bit.

There is growing evidence that fatigue is beginning to develop among the population that we all represent. That fatigue is coming from the worry and fear about the ever-increasing costs imposed on individual households who believe they cannot do or pay any more and are doing the best they can.

A couple of years ago, I tried to set an example and changed from a back boiler heating system in my house to a wood-burning stove. It reduced costs and dependence on fossil fuels by about 60%. However, it was deemed that was ill-advised and the particulates that were emitting from the chimney stack smoke were harmful. That happened to come at a very unfortunate time. I had already spent the money at that stage.

I found that the biggest single contribution to heat and energy conservation in the home was triple-glazed windows. The thermal barrier of two inches is more effective than anything else. We have studied them all. It is much more effective, accessible and cost-effective than anything else we can do. So noticeable is the change that in rooms that did not have triple-glazed windows I can notice a difference between the back and front of the house. There is a huge difference.

The public now needs to know that we can move ahead on achieving some milestone in the course of the litany of issues that we have to deal with, and do so quickly and effectively and make our contribution to a reduction in dependence on fossil fuels. That is understandable.

I have studied a number of cases. There are examples over the past year of extraordinary electricity bills for people who change their systems. Some seem to work better than others, and I do not know why. However, I know that electricity is a feature of running air pumps and so on. That requires the total insulation of the house to the extent that it becomes airtight. I am not so sure about the safety of that. An airtight cylinder can be very dangerous. The experts will tell me it is all being catered for. I do not care whether it is being catered for; I am not satisfied with it. I have a reasonable knowledge of how it works. I again emphasise that there needs to be some special attention paid to ensuring that the stages that we follow are more concentrated on achieving the first, second, third or fourth items that are major contributors to energy and heat conservation, a reduction in emissions, etc.

The use of electric cars is useful. I have not got to that stage yet, but I am at the stage of at least reducing the capacity of a car to emit carbon. I have done that so far. It is a contribution. We will have to make a contribution. That is a fact.

Alternatively, we can decide to close down the beef, dairy and cereal industries and everything else. Instead, we can die of starvation. We will insure against the cold and not have to provide any air conditioning because it will be too expensive to run and so on, but we can die of starvation. That is not an option. If we think we can exist without a viable agrifood sector in this country, we are wrong. That is the wrong conclusion, and it is wrong to sell that to the people. We should not fall back on that because it is the easy option whereby only some of us have to do anything. Those of us who have to carry the burden in that area are those involved in the agrifood production sector. I would strongly advise that we avoid the day where we depend on a ship coming from South America or somewhere further afield, which will obviously come underwater without any emissions at all, and wait before we can open milk bottles in the morning or whatever the case may be and get food that way. That is not an option.

Let us not forget that the European Union, when it was the European Economic Community, was started to ensure that we could avoid food scarcity in the aftermath of the Second World War. There were good reasons for that. I am not suggesting that I know everything about this, but I know as much as a lot of other people. I know that from practical efforts to try to address the issue we will have to address.

I refer to the theory that urban Ireland can be protected and stand aloof from this whole situation. It cannot because the problem is that rural Ireland will survive. It will be self-sufficient in respect of food and food production, but unfortunately urban Ireland will not be and will have to depend on food coming from somewhere. Therefore, we need to be self-sufficient. We need to ensure we are able to continue with the food production sector similar to the way in which it rose to the challenge of the economic crash. Three areas contributed hugely to that recovery. Otherwise we would still be in hock to the last.

I strongly dispute the suggestion that one or other group was responsible for the economic crash. Several people and entities had responsibility for that. Everybody wanted to blame everybody else when it was all over, but the fact of the matter is that there is no use involving ourselves in the blame game. We have to get involved in the production of the means and methodology to ensure that we do not have a repetition of what happened.

In 2006, I was a member of a useful committee, as was the Minister, that arrived at conclusions. Unfortunately, some people did not agree with the findings.

Unfortunately, there was a huge campaign against various methods for the production of alternative energy, like wind turbines. There was a national campaign against them, to such an extent that it faltered. It faltered at a time when it was vital that this country would get in a position where it could replace dependency on fossil fuels to a huge extent. I did not hear anybody from urban or rural Ireland or anywhere else stepping up, except the people who had their eyes focused correctly on the future and who said they had to try and do this because it would give a certain amount of independence and that we would gain a certain amount of more independence by supporting these proposals. I think that was the right thing to do, and that still remains an option available to us. I think we can achieve a great deal of improvement in that area.

This is my last point. I thank the Leas-Cheann Comhairle for the opportunity. I could speak for a lot longer on this subject because I was involved in a huge protest around that particular time in relation to energy alleviating measures that I felt were the better for the country. While I do not attempt to pretend to know everything I know a little bit about it and a little bit about the workings of the committee way back in 2006, and the recognition that it was deemed at the time – it is still valid and the points made are valid - to have a vital contribution to make to the energy sector, the alleviation of dependency on fossil fuels, the reduction in harmful emissions and a whole lot of other things. It is not a question of solving all the problems together, it is a question of progress, of starting with what is attainable and accepting the progress.

The last point I want to make is simply that we have done a reasonably good job. We are achieving targets. We have gone a long way. I remember the days when a bus took off on O'Connell Street and there was a cloud of smoke to such an extent that you could not see the surrounding area for about 15 minutes afterwards. There were cars at that time with massive emissions. If you travelled at more than 60 mph and you looked in the mirror there was a huge amount of smoke. You did not have to go to a garage to find out what the emissions were like, they were visible for everybody to see. That has gone to a significant extent. We must acknowledge the progress we have made and stop threatening ourselves and beating ourselves up and attempt to improve the situation we have on a step-by-step basis. I am sorry for overstepping my time.

Deputy Joan Collins

I am still none the wiser as to what the Deputy's position is on the European charter.

An Leas-Cheann Comhairle

Deputy Durkan does not need to worry about his absence.

Deputy Bernard J. Durkan

I did not comment on Deputy Collins's comments.

An Leas-Cheann Comhairle

Deputy Durkan does not need to worry about his absence because if he looks at the record he will see an earlier speaker felt he was becoming Deputy Bernard Durkan. There was somebody here representing the Deputy. He can look at the record.

Minister of State at the Department of the Environment, Climate and Communications (Deputy Ossian Smyth)

I am very grateful for the opportunity to address the House on the Energy Charter Treaty. I want to briefly address a comment from Deputy Whitmore who asked why our emissions are still going up. She will be glad to hear that they are falling. The authority on our level of greenhouse gas emissions is the EPA. It reported that our emissions fell 1.9% last year and that they have fallen 4.6% since pre-Covid times. Our emissions are falling and they are going to continue to fall this year as well.

Deputy Whitmore also asked why we have not put a single solar panel on a single school. Approximately 250 schools have solar panels on them now. They have been put on under a number of different schemes, including the pathfinder programme. I expect the Department of Education to announce the start of a much larger scheme in the next ten days.

As the Minister, Deputy Eamon Ryan, has already stated, the practical consequence of the 2022 vote is that the modernisation of the charter was neither adopted nor rejected by the energy charter conference. In the absence of an EU and Euratom endorsement of the modernisation of the ECT, the unmodernised ECT, which is not in line with the EU's policy on investment protection or the European Green Deal, continues to apply.

Consequently, in agreement with the member states, the Commission requested the removal of the modernisation of the ECT from the agenda of the energy charter conference. Discussions were subsequently held in the working party on energy, with the participation of delegates from the Trade Policy Committee, Experts, Services and Investment, on 7 February 2023 and 14 March 2023, on the basis of a non-paper from the European Commission, with a view to identifying common ground on the way forward.

The discussions showed that there is limited but clearly insufficient support for the option 1 in the Commission non-paper which proposed a co-ordinated withdrawal by the EU and its member states. This option was considered unacceptable by a number of member states that are concerned that this would trigger the sunset clause, thus conserving an unreformed treaty for another 20 years for existing investments and amid concerns expressed about the legal effectiveness of the proposal for an interpretation of the EU to end its application to intra-EU investments. The discussions showed that a number of member states wish to remain parties to a modernised ECT and that several member states that have announced their withdrawal could still support the modernisation. While it was broadly held that member states should be allowed to remain parties to a modernised ECT, several member states considered also that this would not require prior authorisation pursuant to Article 2 (1) of the TFEU.

A proposal by the chair of the ECT to have a decision on the modernisation package taken by way of a written procedure did not go through following strong objections raised by the EU in the management committee in April 2023. To date, the EU has thus intervened twice to stop the adoption of the modernisation package in line with the absence of an EU position on the modernisation. On 7 July 2023 the Commission published two proposals for Council Decisions that the European Union and the European Atomic Energy Agency both withdraw from the Energy Charter Treaty. The proposal advises that remaining a contracting party to the current, unmodernised ECT is not an option for the EU or its member states, as the current, unmodernised treaty is not in line with the EU's investment policy and law and with the EU's energy and climate goals.

I am now going to refer to some rulings by Court of Justice of the European Union, CJEU. Recent rulings have determined that the arbitration system under the Energy Charter Treaty cannot be used to claim compensation in intra-EU disputes. As Ireland does not have any bilateral investment treaties, the ECT is the only instance in which Ireland could be subject to intra-EU arbitration.

The court confirmed that despite the multilateral character of the Energy Charter 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".

Most recently, on 2 September 2021, the CJEU ruled that the investor-state dispute settlement mechanism provided for under Article 26 of the Energy Charter Treaty is not applicable to intra-EU disputes. I refer to case C-741/19, Republic of Moldova v. Komstroy.

This ruling is consistent with the Commission's interpretation of the 2018 Achmea judgment, C-284/16 - Slovak Republic v. Achmea. In the Achmea judgment, the CJEU effectively found that all investor-state arbitration clauses in intra-EU bilateral investment treaties, BITs, are incompatible, and that any arbitration tribunal established on the basis of such clauses lacks jurisdiction due to the absence of a valid arbitration agreement. The Commission's interpretation of the Achmea judgment extends to include the ISDS provisions of the ECT.

Member states have been calling on the Commission to begin work on implementation of the Komstroy judgment. However, the Commission was waiting for the opinion of the court in Opinion 1/20, Belgium's request for the court's opinion on the intra-EU applicability of the ECT and whether lack of intra-EU application should be enshrined in the ECT itself. On 16 June 2022, the court determined that Belgium's request was inadmissible on account of its premature nature.

I will now refer to the Irish position. The Minister, Deputy Eamon Ryan, publicly stated earlier this summer that the Energy Charter Treaty is not fit for purpose and that it needs to have fossil fuels removed. The ECT modernisation has not progressed adequately so far. Europe has, as a whole, signalled a full exit now that modernisation was not possible. The removal of fossil fuels and the elimination or reduction of the sunset clause were key asks for Ireland as part of the modernisation process.

Ireland has signalled its intent to leave, but wants to do so in a co-ordinated way with European colleagues. Ireland has expressed strong views within the EU on the compatibility of the Paris climate agreement and the Energy Charter Treaty's dispute resolution mechanism.

We continue to express our strong views on these issues within the EU and we believe our views carry more weight in international negotiations by advocating them as part of the EU.

The European Commission has recommended that all member states leave the Energy Charter Treaty as the path to modernisation has been blocked. The removal of fossil fuels and the elimination or reduction of the sunset clause protecting fossil fuel investments were key requirements for Ireland as part of the modernisation process.

On 7 July 2023, the Commission published two proposals for Council decisions to have the EU and the European Atomic Energy Agency both withdraw from the energy charter treaty. The Commission is also withdrawing its previous proposal to ratify a modernised treaty, as it is impossible to achieve a qualified majority at the Council. The legal proposals will now be submitted to the Council of the EU, where a qualified majority vote is necessary for their approval. Ireland has signalled its intent to leave but wants to do so in a co-ordinated way with the other member states. We continue to express our views on these issues within the EU and believe our views carry more weight in international negotiations by advocating them as part of the EU.

The Department is engaging, as necessary, with the Office of the Attorney General on legal issues relating to the Energy Charter Treaty and the withdrawal process. While the Department of the Environment, Climate and Communications does hold the policy, this is an international treaty and any major changes to it, as with any other treaty, will of course involve a full Government decision. Thus, it is not solely at the discretion of the Department.