The ECT: The outdated treaty holding climate-progressive governments to ransom

The ECT: The outdated treaty holding climate-progressive governments to ransom Photo by Ben Wicks / Unsplash 1 What is the Energy Charter Treaty? In 1994, the Energy Charter Treaty (ECT) established a legally binding framework for multilateral cooperation in the energy sector, protecting investments in activities such as oil extraction, coal mining, and petroleum refining. [...] Fossil fuel companies have successfully sued governments for an average of US$600 million per case.4 Analysis conducted by Investigate Europe reveals that the ECT protects €344.6 billion of fossil fuel infrastructure in the EU, the UK and Switzerland.5 Analysis by Investigate Europe reveals that the Energy Charter Treaty protects €344.6 billion of fossil fuel infrastructure in the EU, UK and Switz. [...] The continuation of the ISDS mechanism under the ECT until 2050 has been projected to cost €1.3 trillion globally.17 The UK’s exposure is significant: in 2021, the UK was home to over £121 billion worth of fossil fuel infrastructure protected by the ECT – around £1800 per UK citizen, and making up over a third of the total exposed assets for the EU, UK, and Switzerland combined.18,19 By contrast,. [...] In the past year, Spain, France, the Netherlands, Poland, Slovenia, and Germany have signalled plans to leave the controversial agreement, and in July 2023, the European Commission proposed a coordinated exit for all EU Member States.25 The CCC notes that as climate-friendly governments exit en masse, the task of bringing the ECT in line with climate commitments becomes “increasingly unlikely”.26. [...] This welcome decision responds to a solid mandate to leave the ECT in the UK: less than one in ten people think the UK should remain in the treaty27 and in January 2023, the CCC formally recommended exiting.28 Looking forward, it is important that the UK’s exit is part of a coordinated withdrawal with other climate-progressive countries in order to avoid the ECT’s ‘sunset clause’ (Article 47).