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This report provides a legal assessment of the June 24, 2022, agreement in principle to reform the Energy Charter Treaty (ECT), concluding that the proposed modernization is insufficient to support global climate action goals or the energy transition.

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 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.

This report by the International Institute for Sustainable Development examines how investor-state dispute settlement (ISDS) mechanisms are used by the fossil fuel industry to protect investments and obstruct climate actions, specifically the phasing out of fossil fuels.

This legal briefing examines the impact of the Court of Justice of the European Union (CJEU) Komstroy decision on intra-EU investment disputes under the Energy Charter Treaty (ECT). It argues that the ruling, alongside the Achmea and PL Holdings decisions, effectively bars investor-State dispute settlement (ISDS) between EU investors and Member States, creating significant legal and financial obstacles to the enforcement of arbitration awards. The document specifically analyzes how these rulings and EU State aid laws could impede claims by energy companies RWE and Uniper against the Netherlands regarding its coal phase-out policy.

A joint statement from the International Institute for Sustainable Development (IISD) and ClientEarth addressed to the European Commission, arguing that the Energy Charter Treaty (ECT) is an obstacle to the EU's climate goals and requires fundamental redesign rather than cosmetic modernisation.

This briefing discusses the necessity of overhauling the Energy Charter Treaty (ECT) to align it with international climate commitments, specifically the Paris Agreement, to support the transition from fossil fuels to renewable energy.