Arguments in favour of Energy Charter Treaty withdrawal

The document contends that the modernized Energy Charter Treaty (ECT) remains incompatible with EU law and climate goals because it retains an unpredictable investor-state dispute settlement (ISDS) system and continues to protect fossil fuel investments. It argues that the process for the new treaty to enter into force is uncertain and potentially protracted. Instead, the author proposes a coordinated withdrawal by the EU and Member States, combined with an 'inter-se agreement' to abolish the 20-year sunset clause, as the cleanest method to eliminate legal risks and provide the regulatory flexibility necessary for the energy transition.

• The modernized ECT is deemed undesirable because it retains an 'old-style' investor-state dispute settlement (ISDS) system, which contradicts the European Commission's preference for an Investment Court System (ICS) and creates unpredictability.
• The treaty's valuation methods for compensation are criticized for protecting uncertain future profits through techniques like discounted cash flow, which the document claims is in contrast to property rights protections under EU law and the European Convention of Human Rights.
• The new ECT fails to align with international climate goals as it continues to protect fossil fuel investments indefinitely in most jurisdictions and in the EU potentially until 2040, while also extending protection to controversial sources like biomass, biofuels, and synthetic fuels.
• The process for the new ECT to enter into force is described as potentially indefinite, requiring unanimous adoption by voting parties and ratification by three-quarters of contracting parties.
• The author proposes that the EU and Member States utilize a coordinated withdrawal under Article 47 ECT and adopt an 'inter-se agreement' to abolish the 20-year sunset clause, which would otherwise protect existing investments for two decades after exit.
• The document argues that if the EU withdraws from the ECT, Member States should be legally required to do so as well, because the treaty covers areas of exclusive EU competence.

APA

ClientEarth (n.d.). Arguments in favour of Energy Charter Treaty withdrawal. https://www.clientearth.org/media/3s3buyaw/arguments-in-favour-of-energy-charter-treaty-withdrawal.pdf

Chicago

ClientEarth. Arguments in favour of Energy Charter Treaty withdrawal. n.d. https://www.clientearth.org/media/3s3buyaw/arguments-in-favour-of-energy-charter-treaty-withdrawal.pdf.

Wikipedia

{{cite report |author=ClientEarth |title=Arguments in favour of Energy Charter Treaty withdrawal |url=https://www.clientearth.org/media/3s3buyaw/arguments-in-favour-of-energy-charter-treaty-withdrawal.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{clientearthndarguments, author = {{ClientEarth}}, title = {{Arguments in favour of Energy Charter Treaty withdrawal}}, institution = {ClientEarth}, url = {https://www.clientearth.org/media/3s3buyaw/arguments-in-favour-of-energy-charter-treaty-withdrawal.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }