IISD: EU’s Historic Energy Charter Treaty Vote Will Boost Energy Transition

April 24 - The European Parliament has today voted for a historic withdrawal of the European Union (EU) from the Energy Charter Treaty (ECT).

The vote follows almost 10 months of negotiations after the European Commission's original proposal for an EU departure from the ECT-during which Germany, France, and Poland have formally left the treaty and a growing number of EU member states, as well as the UK, have announced their future exits.

"This is a historic vote from the European Parliament. It delivers a boost for Europe's green energy transition and a reminder for policymakers that all international investment treaties must align with the Paris Agreement", Lukas Schaugg, International Law Analyst at the International Institute for Sustainable Development (IISD) said.

"Fossil fuel investors have used the ECT to challenge government climate measures through investor-state dispute settlement (ISDS) more frequently than any other investment treaty. With its vote for the EU to leave the ECT, the European Parliament underlines that granting fossil fuel companies privileged access to ISDS is fundamentally incompatible with climate mitigation.

With this step, the EU follows a broader trend away from the old model of unlimited and unsustainable investor privileges, as states are moving away from outdated investment treaties more frequently than ever before.

In line with their ambition to lead the global green transition, the EU and its member states now have a unique opportunity to use the momentum of this progress to show the same level of climate ambition with all of their international investment agreements. The EU must work to remove ISDS privileges still granted to thousands of fossil fuel investors worldwide in more than 800 outdated investment treaties between EU member states and other countries."

Media Contacts

Lukas Schaugg, International Law Analyst, IISD: [email protected]
Isaak Bowers, Communications Officer, Investment, IISD: [email protected]