Electricity transmission pylons beside the gas-fired power plant, operated by Uniper SE, in Irsching, Germany, on Wednesday, July 7, 2021.
Michaela Handrek-Rehle | Bloomberg | Getty Images
LONDON — The Energy Charter Treaty is not widely known, yet it’s feared the influence of this international agreement could be enough by itself to derail hopes of capping global heating to 1.5 degrees Celsius.
The ECT contains a highly contentious legal mechanism that allows foreign energy companies to sue governments over climate action that could hurt future profits.
These “corporate court” cases, sometimes referred to as investor-state dispute settlements, are highly secretive, take place outside of the national legal system and can often lead to far larger financial awards than companies might otherwise expect.
Five fossil fuel companies are already known to be seeking over $18 billion in compensation from governments over energy policy changes and most of these have been brought via the ECT.
For example, Germany’s RWE and Uniper are suing the Netherlands over coal phase-out plans and the U.K.’s Rockhopper is suing Italy over a ban on offshore drilling.
Not only do countries have to get out of that treaty, they have to torpedo it on the way out.
Julia Steinberger
Ecological economist and professor from the University of Lausanne
A spokesperson for Uniper told CNBC: “The Dutch government has announced its intention to shut down the last coal-fired power plants by 2030 without compensation.
“Uniper is convinced that shutting down our power plant in Maasvlakte after only 15 years of operation would be unlawful without adequate compensation.”
RWE said it “expressly supports the energy transition in The Netherlands. In principle, it also supports the measures to reduce CO2 associated with the law, but believes compensation is necessary.”
Rockhopper did not respond to a request for comment.
The number of these corporate court tribunals is expected to skyrocket in the coming years, a trend that campaigners fear will act as a handbrake on plans to transition away from fossil fuels.
Governments that are prepared to implement measures to tackle the climate crisis, meanwhile, could be hit with enormous fines.
“The Energy Charter Treaty is a real trap for countries,” Yamina Saheb, an energy expert and former ECT Secretariat employee turned whistleblower, told CNBC via telephone.
Saheb quit her role with the Secretariat in June 2019 after concluding it would be impossible to align the ECT with the goals of the landmark Paris Agreement. She said any attempt to reform or modernize the treaty would ultimately be vetoed since many member states are heavily reliant on fossil fuel revenues.
Thick smoke, cloud of water vapour comes out of the cooling towers of the lignite-fired power plant Weisweiler of RWE Power AG in Germany.
Horst Galuschka | picture alliance | Getty Images
“If we withdraw, we can protect ourselves, we can start implementing the climate neutrality targets and we can end the promotion of the expansion of this treaty to other developing countries,” Saheb said.
“I think the only way forward is to kill this treaty,” she added. “Either we kill this treaty, or the treaty will kill us.”
The ECT Secretariat was not immediately available to respond when contacted by CNBC.
The treaty has said its fundamental aim is “to strengthen the rule of law on energy issues by creating a level playing field of rules” that help to mitigate the risks associated with energy-related investment and trade.
Who’s involved and how does it work?
The ECT is a unique multilateral framework that applies to more than 50 countries — mostly in Europe and central Asia — and includes the European Union, the U.K. and Japan among its signatories. It is currently looking to expand to new signatory states, particularly in Africa, Asia and Latin America.
Signed in 1994, the ECT was primarily intended to help protect western companies investing in former Soviet Union countries in the post-Cold War era. It was also designed to help overcome economic divisions by ensuring a flow of western finance in the east through binding investment protection.
It has since been sharply criticized by more than 200 climate leaders and scientists as a “major obstacle” to averting climate catastrophe.
Dozens of people walk through water due to heavy rains causing flooding in Dhaka, Bangladesh on October 7, 2021.
Sumit Ahmed | Eyepix Group | Barcroft Media | Getty Images
“I think the treaty is probably by itself enough to kill 1.5 [degrees Celsius],” Julia Steinberger, ecological economist and professor from the University of Lausanne, told CNBC.
“I know that 1.5 is a very tight target and there are a lot of things that can blow it, but it is because it basically saves fossil fuel industries … from the financial collapse that they should face for their risky — and honestly criminal — investments in a harmful technology.”
Corporate court hearings brought via the ECT take place in private and investors are not obliged to acknowledge the existence of a case, let alone reveal the compensation they are seeking.
The average cost of investor-state dispute settlement cases is estimated at roughly 110 million euros ($123.9 million), according to an analysis of 130 known claims by think tank OpenExp, and the average cost of arbitration and legal fees is thought to be around 4.5 million euros.
International environmental law experts say that even the threat of legal action is thought to be highly effective in chilling domestic climate action — and fossil fuel companies are acutely aware of this.
That’s because governments may struggle to allocate resources to a single issue when accounting for other priorities. The threat of legal action becomes progressively more powerful as the budget of the country involved becomes smaller.
Notably, a ruling in favor of the state does not lead to zero cost for taxpayers because the defendant state must pay for legal and arbitration fees.
“Not only do countries have to get out of that treaty, they have to torpedo it on the way out,” Steinberger said. “And that’s something a unit the size of the European Union could do.”
A spokesperson for the EU was not immediately available to comment when contacted by CNBC.
The EU completed its eighth round of negotiations to modernize the ECT earlier this month, with the ninth round of talks scheduled for Dec. 13.
France, Spain and Luxembourg have all raised the option of withdrawing if the EU’s modernization efforts fail to conform to the Paris accord.
What happens if countries withdraw?
Italy withdrew from the ECT in 2016, but it is currently being sued because of a 20-year “sunset clause” which means it is subject to the treaty through to 2036.
Around 60% of cases based on the treaty are intra-EU, with Spain and Italy thought to be the most sued countries. Saheb said that given most of these cases are within the bloc itself, a coordinated withdrawal would likely kickstart a domino effect, with states such as Switzerland, Norway and Liechtenstein seen as likely to follow suit.
And if the bloc were to withdraw from the treaty collectively, member states could agree to remove the legal effects of the sunset clause themselves.
“That sunset clause is much longer than many sunset clauses in other treaties but is also completely incompatible with the notion that regulations need to evolve with the changing reality of climate change, to the changing demands of safeguarding the environment and human rights,” Nikki Reisch, director of the Climate & Energy Program at the Center for International Environmental Law, told CNBC.
“There’s a really strong case to make that the application or enforcement of that sunset clause is contrary to other principles of international law,” she added.
A view of open freight wagons full of coal under smog during a day that the level of PM2.5 dust concentration amounted to 198 ug/m3 on February 22, 2021 in Czechowice Dziedzice, Poland. The central eastern European country has the EU’s worst air, according to a report published by the European Environment Agency (EEA).
Omar Marques | Getty Images News | Getty Images
The European Court of Justice ruled in early September that EU energy companies could no longer use the treaty to sue EU governments. The verdict significantly limits the scope of future intra-EU cases and has thrown the legitimacy of a number of ongoing multi-billion-euro lawsuits into question.
“We are not out of the woods yet,” Reisch said. The ruling was an important step to blunting an instrument designed to protect fossil fuel investors, she said, but it does not take arbitration cases by investors domiciled outside of the EU off the table.
“We can’t let our ability to confront the greatest crisis that we have ever faced as humankind, arguably, be held hostage to the interests of investors,” Reisch said.
“I think it is just another reminder of the need to eliminate those legal structures and fictions that we’ve created that really do lock us into a bygone era of fossil fuel dependence.”
Owner-operators are a huge part of the heavy truck market, and they’ve been among the most hesitant groups to transition from diesel to electric semi trucks. That may be changing, however, as Saldivar’s Trucking becomes first independent owner-operator in the US to deploy a Volvo VNR Electric Class 8 truck.
The higher up-front cost of electric semi trucks has been a huge obstacle for smaller fleets. That’s there are incentives from governments, utilities, and even non-profits to help overcome that initial obstacle. And the smart dealers are the ones who are putting in the hours to learn about those incentives, educate their customers, and ultimately sell more vehicles.
TEC Equipment is a smart dealer, and they worked closely with South Coast Air Quality Management District to secure the CARB funding and ensure Saldivar’s was able to ssecure $410,000 in funding from CARB’s On-Road Heavy-Duty Voucher Incentive Program (HVIP), which provides funding to replace older, heavy-duty trucks with zero-emission vehicles. The program is directed exclusively to small fleets with 10 vehicles or less that operate in California and aims to bridge the gap between the regulatory push for clean transportation and the financial realities faced by small business owners.
“TEC Equipment has been instrumental in supporting owner-operators like Saldivar’s Trucking through the transition to battery-electric vehicles,” explains Peter Voorhoeve, president of Volvo Trucks North America. “Their dedication to providing comprehensive support and securing necessary funding demonstrates how crucial dealer partners are in turning the vision of owning a battery-electric vehicle into a reality for fleets of all sizes.”
Saldivar’s Volvo VNR Electric features a six-battery configuration, with 565 kWh of storage capacity and a 250 kW charging capability. The zero-tailpipe emission truck can charge to 80% in 90 minutes to provide a range of up to 275 miles.
“While large fleets often make headlines for their ambitious investments in battery-electric vehicles, nearly half of the 3.5 million professional truck drivers in the U.S. are owner-operators running their businesses with just one truck,” adds Voorhoeve. “These small operations face unique challenges, from the initial capital investment to securing adequate charging infrastructure … this collaboration is a perfect example of the important role to be played by truck dealers and why stakeholders need to work together to succeed in this new era of sustainable transportation.” We need solutions that work for different fleets of all sizes in the marketplace,” added Voorhoeve.”
Electrek’s Take
Electrifying America’s commercial trucking fleet can’t happen soon enough – for the health of the people who live and work near these vehicles, the health of the planet they drive on, and (thanks to their substantially lower operating costs) the health of the businesses that deploy them. TEC is doing a great job advancing the cause, and acting as true expert partners for their customers.
Mercedes released a look at the powertrain technology of its upcoming electric CLA, and it includes tons of neat EV tech and some interesting options for battery technology and what looks to be the most flexible charging system we’ve seen yet.
We’ve already learned a fair amount about the CLA after first seeing the concept last year, and Mercedes released a few new specifics today regarding its powertrain.
In keeping with previous information we knew, the CLA is targeting extremely high efficiency of 12kWh/100km, which translates to just 193Wh/mi or 5.2mi/kWh. That’s more efficient than anything else on the road today – with Lucid’s Air Pure reaching 200Wh/mi, or 5mi/kWh. And just less than what Tesla is claiming the Cybercab will be capable of, at 5.5kWh/mi.
This is thanks to Mercedes’ new compact EDU 2.0 electric motor, which is part of its new Mercedes Modular Architecture (MMA) which will underpin its upcoming electric vehicles. The drive motor will be 200kW on the rear axle, though all-wheel drive models will be available with an additional 80kW unit on the front axle. A two-speed transmission will ensure efficiency at high speeds and low.
For more efficiency in cold weather, the CLA will use an air-to-air heat pump which is able to capture heat from the motor, battery, and ambient air to heat the cabin. While batteries and motors don’t make nearly as much waste heat as inefficient ICE engines, it’s still good to be able to channel heat to wherever you need it.
Mercedes says that the CLA will come equipped with a choice of two different batteries, each with different chemistries.
The larger 85kWh model will be capable of an unnecessarily-high 750km (466mi) of WLTP range – though WLTP numbers are always higher than EPA numbers, so expect something in the high-300s in EPA parlance. This battery will add silicon oxide to the anode for higher energy density, a technology that has been pioneered by Sila Nanotechnologies, a company which Mercedes is a lead investor in.
The smaller battery will be 58kWh, and will use lithium iron phosphate (LFP) chemistry. LFP is a cheaper but lower energy density technology, with higher long-term durability and simpler sourcing of minerals (it uses no cobalt, whereas Mercedes says cobalt has been “reduced” in the larger batteries). However, LFP generally has slower fast charging and cold weather performance.
On charging: the “premium” battery will have an 800V configuration capable of up to 320kW charging speeds. Mercedes says this can add 300km (186mi) of range in 10 minutes, and also says that the car will have a broad charging curve, which means you’ll get high charge rates even if the battery isn’t close to empty. It didn’t specify if the smaller LFP battery will have the same charge rate.
This high charging rate allowed Mercedes to set a record traveling 3,717km (2,309mi) in 24 hours at the Nardo test track in Italy in a pre-production CLA. That’s an average travel rate of 96mph – including time spent charging.
We also learned something about Mercedes’ NACS adoption plans. While just about everyone has committed to transitioning cars to NACS, it has taken longer than expected (largely due to Tesla’s chaotic CEO firing the whole supercharger team for little reason), and few cars have native NACS inlets yet. Some brands can already charge at Superchargers with adapters, but Mercedes is still on Tesla’s “coming soon” page.
As a result of delays in onbaording automakers, some seem to have pulled back on their plans, pushing NACS ports to later model years. But Mercedes has a new and unique solution – it will just put both CCS and NACS ports on the CLA, right on top of each other.
Mercedes says “in the future, new entry-level models will be capable of bidirectional charging,” but isn’t clear whether this model will be capable of that.
Electrek’s Take
While this is short of a full release of specs, we’re excited by what we see here. Mercedes seems to confirm that they’re meeting the efficiency goals they set out, and we like that they’re offering a variety of options and taking advantage of some newer EV tech like 800V charging infrastructure.
The inclusion of both NACS and CCS is very interesting, again offering options to owners during the transition. That seems to be the big message from Mercedes here – we’re not going to just pick one tool, we’re going to use all of them.
But pricing and availability are obviously big questions, as is design.
The concept looks fantastic, but concepts always change on their way into production. The shape of the camouflaged test vehicle is very different – but looks to have some shrouding on the front and back to hide its shape, so we’ll have to wait until we see this thing unveiled for more.
And as for pricing – Mercedes says the CLA will be an “entry-level” car, but who knows what that means anymore these days. The base ICE CLA starts at around $44k currently, so lets see if they can hit that number.
Charge your electric vehicle at home using rooftop solar panels. Find a reliable and competitively priced solar installer near you on EnergySage, for free. They have pre-vetted installers competing for your business, ensuring high-quality solutions and 20-30% savings. It’s free, with no sales calls until you choose an installer. Compare personalized solar quotes online and receive guidance from unbiased Energy Advisers. Get started here. – ad*
FTC: We use income earning auto affiliate links.More.
Daimler Truck North America has helped alcohol distributor Reyes Beverage Group deploy fully 29 zero-emission Freightliner eCascadia Class 8 electric semi trucks in its California delivery fleet.
Reyes Beverage Group (RGB) plans to deploy the first twenty Freightliner electric semi trucks at its Golden Brands – East Bay and Harbor Distributing – Huntington Beach warehouses, marking the first phase in the company’s transition to a fully zero emission truck fleet by 2039. An additional nine eCascadia Class 8 HDEVs are scheduled for delivery to RBG’s Gate City Beverage – San Bernardino warehouse before the end of 2024.
RBG’s decision to adopt the Freightliner eCascadia builds on its recent transition to renewable diesel and its ongoing idle-time reduction program. These electric vehicles (EVs) “go electric” will contribute significantly toward the company’s stated goal of reducing its carbon emissions 60 percent by 2030. These 2 trucks will save some 98,000 gallons of diesel fuel annually, and avoid putting nearly 700 metric tons of carbon dioxide and other harmful emissions into California’s air each year.
“We are excited to be among the first in our industry to adopt these electric vehicles,” explains Tom Reyes, President of RBG West. “This is a significant step toward our sustainability goals and ensuring compliance with state regulation as we transition our fleet to EV.”
Freightliner’s eCascadia electric semi trucks offer a number of battery and drive axle configurations with ranges between 155 and 230 miles, depending on the truck specification, to perfectly match customers’ needs without compromising on performance and load capacity. RBG’s Freightliner eCascadia tractors will rely on electric charging stations installed at each facility, allowing them to recharge to 80% capacity in as little as 90 minutes for RGB’s trucks, which feature a typical driving range of 220 miles as equipped.