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Secretive Energy Charter is Unravelling

Updated: Nov 30, 2022

The German government has announced that it will quit the controversial Energy Charter Treaty, which allows energy companies to sue governments for profits lost as a result of policy changes. Environmentalists argue that the ECT is perpetuating the fossil fuel industry.


Energy Charter logo

The treaty – which has about 50 member countries, including EU states, the UK and Japan – has been described as a real threat to the Paris agreement; it could allow companies to sue governments for an estimated €1.3tn ($1.6tn) until 2050 in compensation for early closure of coal, oil and gas plants.


Activists and whistleblowers say these vast sums would stymie the green transition. Indeed, five claimants aged 17-31 have commenced proceedings against the treaty in the European Court of Human Rights. “It just can’t be that the fossil fuel industry is still more protected than our human rights,” said one of the claimants.


Meanwhile, in addition to Germany, France, Spain, the Netherlands, Slovenia, Poland and Luxembourg have also announced they will withdraw from the pact, which has been used by energy companies to challenge policies designed to curb emissions.


“It is an ongoing scandal that some of the world’s most polluting corporations have been able to disrupt and deter climate action under this secretive legal framework,” said Jean Blaylock, trade campaigner at Global Justice Now, a social justice organisation.


“Germany’s departure from the Energy Charter Treaty must surely sound the death knell for this climate-wrecking trade agreement. The UK government should now abandoned its craven kowtowing to the fossil fuel industry and join the exodus.”


The treaty was set up in 1991 to protect energy firms as they integrated the energy networks of former Soviet Union countries with the rest of Europe.

 
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