The Energy Charter Treaty (ECT) constitutes an obstacle to the clean energy transition and must be ended
ECT Campaign Communications
Friends of the Earth Europe Communications
Firms using the ECT
The ECT is the agreement that has triggered the largest number of lawsuits by foreign investors against signatory states in the world. Recent cases include:
●RWE v. Netherlands –Ten years ago, RWE, a German energy company, decided to ignore climate science and build a brand new coal power station in the Netherlands. Last year, the Dutch government passed a law to stop burning dirty coal by 2030. Using the ECT, RWE is demanding 1.4 billion euros in compensation for lost profits.
●Uniper v. Netherlands – Uniper asked for 1 billion euros in compensation for the Dutch coal phase out by 2030.
●Ascent Resources v. Slovenia – Ascent Resources claims 120 million euros after the Slovenian government asked for an environmental impact assessment before approving a gas fracking project.
●Vermilion v. France – In 2017 Canadian oil and gas company Vermilion threatened to sue France under the ECT over a proposed law to end fossil fuel extraction on French territory, including overseas, by 2040. The threat of a lawsuit potentially contributed to watering down the law, the final version of which allows exploitation permits to be renewed after that deadline.
●Rockhopper v. Italy – Since 2017, the UK company Rockhopper has been suing Italy over a ban on new oil and gas operations near the country’s coast, claiming $275 million in compensation.
Why is the modernisation process a failure?
●The agenda for the modernisation talks does not live up to the promise of making the ECT climate–friendly –several issues are not even discussed. In particular, the reform will not make changes to the controversial ISDS mechanism, the sunset clause (which allows investors to file arbitration claims for 20 years after a state withdraws from the treaty), or the way the high compensations are calculated.
●The 53 ECT members include countries with dramatically different climate ambition, yet any changes to the ECT require unanimity. States such as Japan (the main contributor to the ECT) have already indicated that they do not support any major changes on the whole range of modernisation issues.
●The level of ambition is too low. Even the changes proposed by the European Commission, would continue to protect existing fossil investments well into the 2030s and for some gas investments even until 2040. The risk of ECT lawsuits against climate action would continue to be high.
●Little progresshas been made so far.
The ECT’s investment protection provisions have not been updated since the 1990s and are now, according to the European Commission (EC) “outdated” compared to the new standards of the EU’s reformed approach on investment policy.
Already in 2009, contracting parties to the ECT agreed to modernise the treaty. In 2018, a list of 25 negotiation topics was adopted as well as a decision to commence negotiations in December 2019. The EU adopted a negotiation mandate for ECT reform in July 2019.
With a seven month delay, the first negotiation round eventually took place in July 2020. Three further rounds are planned for 2021: 6–9 July, 28–30 September, and 9–11 November 2021.European wide mobilisation
●6 July: Over 400 civil society organisations are joining the movement and published a statement to call EU leaders to pull out of the ECT by the end of 2021 at the COP26.
●In February 2021, an online petitiongathered over 1 million signatures asking the EU to pull out from the ECT.
●On 9 December 2019 an Open letterfrom 278 civil societygroups and trade unionsfrom member states of the Energy Charter Conference.
●On 3 November 2020, 260 MEPs/MPsfrom 20 EU member states called on EU countries to withdraw from the ECT if protection of foreign investment in fossil fuels is not removed from the Treaty
.●More than 400 climate leaders signed anopen lettercalling on EU governments to withdraw from the ECT.
●Youth, the European Renewable Energy Federation, and investorshave also raised their voices against the ECT.
●In June 2021, 71 MEPs said “the time is up” in an op–ed published in Euractiv.
For more information, please contact:
Catherine Joppart, ECT Campaign Communications catherine, firstname.lastname@example.org 0491 64 37 35
Robbie Blake, Friends of the Earth Europe Communications, robbie. email@example.com 0491 29 00 96
Cornelia Maarfield, Trade and Climate Project Manager, CAN Europecornelia@caneurope.org+49 170 8765 271