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

The International Institute for Sustainable Development (IISD) asserts that the modernized Energy Charter Treaty (ECT) remains problematic due to persistent investor protections and unclear fossil fuel carve-outs. IISD notes that the ECT has been a primary vehicle for fossil fuel investors to challenge climate laws, with 17% of all such disputes brought under this treaty. The organization argues that retrofitting the ECT is insufficient and calls for a new investment treaty designed specifically to advance climate-friendly investments.

• The modernized Energy Charter Treaty (ECT) text creates significant legal uncertainty for governments implementing climate measures because it leaves unanswered questions regarding the timing of entry into force and the specifics of fossil fuel carve-outs.
• The ECT is disproportionately used by fossil fuel investors to challenge climate-related regulations, accounting for 17% of all investor-state disputes from such investors—a higher proportion than any other international investment agreement.
• Modernization efforts have failed to eliminate broad investor protection standards, and fossil fuel investments in at least 20 contracting parties remain protected indefinitely; specifically, existing investments in the EU and UK would still have at least 10 years of protection.
• The European Commission has proposed a coordinated and orderly withdrawal of the European Union and its member states from the Energy Charter Treaty to avoid the chaos of unilateral exits by individual countries.

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} }