Deal for Modernized Energy Charter Treaty Insufficient for Ambitious Climate Action

IISD experts assert that the modernized Energy Charter Treaty (ECT) fails to align with climate ambitions, specifically noting that the European Union and United Kingdom have agreed to maintain investment protections for existing fossil fuel assets for at least 10 years after the treaty enters into force. This allows fossil fuel investors to continue filing investor–state dispute settlement (ISDS) claims, potentially hindering the phase-out of oil and gas required to limit warming to 1.5°C. Consequently, several EU member states have announced plans to withdraw from the treaty, leading the European Commission to propose a coordinated EU-wide exit to avoid fragmented unilateral withdrawals.

• The modernized Energy Charter Treaty (ECT) is viewed by IISD as failing to meet pledges to align the trade and investment deal with international climate goals, as it maintains protections for fossil fuel investments for a decade or more.
• The European Union and the United Kingdom have specifically agreed that existing fossil fuel investments in their territories will continue to receive investment protections for 10 years after the new treaty takes effect, enabling continued use of investor–state dispute settlement (ISDS) claims.
• The ECT is identified as the international investment agreement most frequently utilized by fossil fuel investors to initiate legal claims under international law, often used to challenge climate action measures.
• Due to the perceived insufficiency of the reform process, seven EU member states have announced intentions to withdraw from the ECT, prompting the European Commission to propose a coordinated and orderly exit for the EU and its member states.

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} }