Newly Released Text for Modernized Energy Charter Treaty Shows Too Many Potential Obstacles for Climate Action

The International Institute for Sustainable Development (IISD) argues that the modernized Energy Charter Treaty (ECT) text, released on September 12, 2022, fails to resolve critical issues regarding fossil fuel carveouts and entry timing, creating legal uncertainty for governments implementing climate measures aligned with the Paris Agreement.

• The modernized Energy Charter Treaty (ECT) text creates significant legal uncertainty for governments attempting to implement climate action measures consistent with the Paris Agreement because it leaves unanswered questions regarding the timing of entry into force and the possibility of further fossil fuel carveouts.
• The modernization process failed to address fundamental flaws of the original ECT, specifically the 20-year sunset clause and the investor–state dispute settlement provision.
• The ECT is disproportionately used by fossil fuel investors for legal disputes; IISD research indicates that 17% of all investor–state disputes from fossil fuel investors were brought under the ECT, which is more than any other international investment agreement.
• Despite some innovations like the exclusion of intra-EU arbitration and carveouts by the UK and EU for certain fossil fuel investments, the modernized treaty still protects new and existing fossil fuel investments indefinitely in at least 20 contracting parties. In the UK and EU, existing investments would maintain protection for at least 10 years.
• The European Commission has formally proposed a coordinated withdrawal of the European Union and its member states from the Energy Charter Treaty to avoid the chaos of individual countries exiting independently, following unilateral withdrawal intentions from Germany, France, Spain, the Netherlands, and Poland, and Italy's exit in 2016.

APA

International Institute for Sustainable Development (2022). Newly Released Text for Modernized Energy Charter Treaty Shows Too Many Potential Obstacles for Climate Action. https://www.iisd.org/articles/statement/newly-released-text-modernized-energy-charter-treaty

Chicago

International Institute for Sustainable Development. Newly Released Text for Modernized Energy Charter Treaty Shows Too Many Potential Obstacles for Climate Action. 2022. https://www.iisd.org/articles/statement/newly-released-text-modernized-energy-charter-treaty.

Wikipedia

{{cite press release |author=International Institute for Sustainable Development |title=Newly Released Text for Modernized Energy Charter Treaty Shows Too Many Potential Obstacles for Climate Action |date=13 September 2022 |url=https://www.iisd.org/articles/statement/newly-released-text-modernized-energy-charter-treaty |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@misc{internationalinstituteforsustainabledevelopment2022newly, author = {{International Institute for Sustainable Development}}, title = {{Newly Released Text for Modernized Energy Charter Treaty Shows Too Many Potential Obstacles for Climate Action}}, publisher = {International Institute for Sustainable Development}, year = {2022}, month = sep, url = {https://www.iisd.org/articles/statement/newly-released-text-modernized-energy-charter-treaty}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }