The EU must withdraw from the Energy Charter Treaty

ClientEarth asserts that the Energy Charter Treaty (ECT) obstructs climate policy by allowing fossil fuel companies to sue governments for compensation over environmental regulations. The organization argues that recent 'modernisation' efforts are insufficient, as they maintain a 'flexibility mechanism' that would allow litigation until the late 2030s and include protections for biomass and carbon capture. The document calls for a coordinated withdrawal of the EU, its member states, and the UK to eliminate the 'chilling effect' of the treaty on the European Green Deal and other climate commitments.

• The Energy Charter Treaty (ECT) enables foreign companies to seek compensation from governments for policy changes that reduce profitability, including coal phase-outs, fracking restrictions, and bans on offshore drilling.
• The ECT's investor-state dispute settlement (ISDS) process allows corporations to bypass domestic courts and sue governments in secretive tribunals, with no cap on payouts, which creates a 'chilling effect' on climate action.
• Modernisation efforts for the ECT are deemed ineffective because they rely on a 'flexibility mechanism' that would only phase out protection for existing fossil fuel investments 10 years after the reform enters into force, potentially leaving EU governments vulnerable to lawsuits until the late 2030s.
• The modernised ECT expands investment protections to include hydrogen, ammonia, biomass, and carbon capture storage, which the document claims could further constrain the regulatory space needed for the energy transition.
• Several EU member states have already moved to exit the treaty, including Italy in 2016, and announcements of intention to leave by Poland, Spain, France, and the Netherlands in 2022.

APA

ClientEarth (2022). The EU must withdraw from the Energy Charter Treaty. https://www.clientearth.org/latest/news/the-eu-must-withdraw-from-the-energy-charter-treaty/

Chicago

ClientEarth. The EU must withdraw from the Energy Charter Treaty. 2022. https://www.clientearth.org/latest/news/the-eu-must-withdraw-from-the-energy-charter-treaty/.

Wikipedia

{{cite press release |author=ClientEarth |title=The EU must withdraw from the Energy Charter Treaty |date=20 September 2022 |url=https://www.clientearth.org/latest/news/the-eu-must-withdraw-from-the-energy-charter-treaty/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{clientearth2022must, author = {{ClientEarth}}, title = {{The EU must withdraw from the Energy Charter Treaty}}, publisher = {ClientEarth}, year = {2022}, month = sep, url = {https://www.clientearth.org/latest/news/the-eu-must-withdraw-from-the-energy-charter-treaty/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }