The Energy Charter and its implications for the EU’s Energy Union

The Energy Charter and its implications for the EU’s Energy Union

May 20th, 2015, was a historic day for international energy co-operation. After many years of planning, discussions, diplomatic effort and, finally, negotiation, the International Energy Charter was adopted at a Ministerial Conference in The Hague.

The International Energy Charter of 2015 is intended to address the most salient energy challenges of the 21st century, and to facilitate the geographical expansion of the Energy Charter Treaty of 1994 beyond the Eurasian continent. The International Energy Charter reiterates the established principles of the European Energy Charter of 1991, an earlier political declaration which preceded the Energy Charter Treaty.

[Tweet "The Energy Charter promotes mutually beneficial energy co-operation among nations for the sake of energy security and sustainability"]The energy challenges addressed, include: the growing demands caused by developing countries for global energy security; the conflict between energy security, economic development, and environmental protection; the role of enhanced energy trade for sustainable development; as well as the need for diversification of energy sources and routes. By including all these relevant issues, the International Energy Charter promotes mutually beneficial energy co-operation among nations for the sake of energy security and sustainability.

Seventy five countries and organisations, including the European Union (and all its Member States), EURATOM, China, the United States, and countries from Africa, Asia, and the Americas adopted the new Charter. Russia did not participate at the Hague Conference, but was a signatory to the European Energy Charter of 1991, and the subsequent Energy Charter Treaty of 1994, which it provisionally applied until 2009. However, the International Energy Charter remains open for signature by any country willing to share the principles of global energy co-operation and governance. The ultimate ambition is for the Energy Charter to achieve its full potential as the premier instrument of global energy co-operation and governance.

The relevance of the International Energy Charter to the European Union’s Energy Union lies in the energy import dependency of the EU. Such import dependency makes it essential for the EU to strengthen the Energy Union’s external dimension. The external dimension of the Energy Union deals with diversified, reliable, and affordable energy imports. The legally binding Energy Charter Treaty and the political process that comes with it, including the new International Energy Charter, provide the ideal basis on which to build the external dimension of the Energy Union. Energy policy must be built on shared rules with external trade partners.

[Tweet "In building its Energy Union, the EU must take into account the global trends."]In building its Energy Union, the EU must take into account the global trends. Energy exploration, generation, and transportation to meet the increasing energy demand will require extensive investment flows. Global engagement with today’s energy and geopolitical circumstances is a priority, in order to build a level playing field on which the EU can be a strong competitor. Recognition of the Energy Charter Treaty as a fundamental tool of global energy governance is very much in the EU’s interest. All in all, to improve global energy governance, the EU should not only work on international energy co-operation, but also advocate for collective responsibility for international energy security.

The Energy Charter Treaty provides a legal framework and a platform for co-operation for the diversification of sources and routes of supply. Whilst the countries of the Caspian region and Turkey are already fully covered by the Treaty’s legal regime, there is now a window of opportunity to expand the Treaty’s framework to other energy-relevant regions like North and Sub-Sahara Africa, or the Middle East, where new producers may contribute to the EU’s energy security.

[Tweet "The principles adopted in The Hague must be implemented with regard to security of supply, security of demand, security of transit, and not least the alleviation of energy poverty"]The principles adopted in The Hague must be implemented with regard to security of supply, security of demand, security of transit, and not least the alleviation of energy poverty. These principles are: political and economic co-operation; sovereignty over energy resources; the development of efficient energy markets; non-discrimination; the promotion of a climate favourable to the operation of enterprises and the flow of investments and technologies; environmental issues. The hope is that the political will which has brought about the adoption of the International Energy Charter of 2015, will continue to ensure that the process continues and fashions a system of global energy governance. Common rules for global energy security should be developed, based on the principles set out in the International Energy Charter. Those principles are for a 21st century world and for more global constituency. This must be the next chapter in the story of the Energy Charter and its contribution to the energy security of the EU and beyond.

Dr Urban Rusnák, Secretary General, Energy Charter Secretariat

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