Deal for Modernized Energy Charter Treaty Insufficient for Ambitious Climate Action

The International Institute for Sustainable Development (IISD) argues that the 'agreement in principle' to modernize the Energy Charter Treaty (ECT) is insufficient for achieving international climate goals. The organization highlights that the revised treaty continues to protect fossil fuel investments and allows for investor-state dispute settlement (ISDS) claims, potentially hindering governments' ability to implement environmental measures and meet Paris Agreement objectives.

• The modernized Energy Charter Treaty (ECT) fails to align with international climate goals because it continues to protect fossil fuel investments for at least a decade. Specifically, the European Union and the United Kingdom agreed that existing fossil fuel investments will only lose protection 10 years after the new treaty enters into force, allowing investors to file investor–state dispute settlement (ISDS) claims during that period.
• The ECT is identified as the most frequently used international investment agreement by fossil fuel investors to file legal claims under international law, and it has been used to challenge climate action measures.
• The modernized treaty is expected to obstruct governments from adopting environmental measures necessary to address biodiversity loss, pollution, and the objectives of the Paris Agreement.
• Due to the perceived insufficiency of the reform efforts, seven EU member states announced plans to withdraw from the ECT starting in October 2022. The European Commission has formally proposed a "coordinated and ordered" withdrawal for the European Union and its member states to avoid individual countries following different paths.

APA

International Institute for Sustainable Development (2022). Deal for Modernized Energy Charter Treaty Insufficient for Ambitious Climate Action. https://www.iisd.org/articles/statement/modernized-energy-charter-treaty-insufficient-climate-action

Chicago

International Institute for Sustainable Development. Deal for Modernized Energy Charter Treaty Insufficient for Ambitious Climate Action. 2022. https://www.iisd.org/articles/statement/modernized-energy-charter-treaty-insufficient-climate-action.

Wikipedia

{{cite press release |author=International Institute for Sustainable Development |title=Deal for Modernized Energy Charter Treaty Insufficient for Ambitious Climate Action |date=27 June 2022 |url=https://www.iisd.org/articles/statement/modernized-energy-charter-treaty-insufficient-climate-action |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@misc{internationalinstituteforsustainabledevelopment2022deal, author = {{International Institute for Sustainable Development}}, title = {{Deal for Modernized Energy Charter Treaty Insufficient for Ambitious Climate Action}}, publisher = {International Institute for Sustainable Development}, year = {2022}, month = jun, url = {https://www.iisd.org/articles/statement/modernized-energy-charter-treaty-insufficient-climate-action}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }