10 March 2021
A petition launched by a coalition of civil society organisations* calling for European states and the EU to pull out of the Energy Charter Treaty and stop its further expansion has reached over one million signatures in two weeks.
Described by coalition members as a way for corporations to hold climate action hostage, the Energy Charter Treaty was signed in 1994 as an instrument to protect transnational investments in the energy sector. The treaty allows energy corporations to put forward compensation claims to states if the former deem their investments and expected profits have been damaged by policy changes. In the last years, we have witnessed a sharp rise in arbitration cases, the majority of which entail fossil fuel corporations suing states over green transition policies.
While the treaty was intended to protect investors in uncertain legal contexts, 74% of ECT cases are between an EU investor and an EU state. This has led civil society to characterise the treaty as a “cash machine” for energy corporations. The journalistic collective Investigate Europe estimates that the fossil fuel infrastructure protected by the ECT in the EU, UK and Switzerland is worth over 340 billion euros - while arbitration claims often go beyond the actual value of investments and include potential future profit.
Recently, German energy giant RWE has filed a claim for 1.4 billion euros against the Netherlands as compensation for the country’s coal exit, while German Uniper (majority-owned by Finnish state-owned Fortum) has threatened to put forward a claim as well. On 5 March, 4 energy companies, among them Swedish state-owned Vattenfall, reached a settlement worth 2.4 billion euros as compensation for Germany’s nuclear phase-out. Such cases demonstrate that the ECT hampers the ability of the EU and its member states to put in place a much-needed green energy transition.
Evelyne Huytebroeck and Thomas Waitz, co-chairs of the European Green Party comment:
“The remarkable engagement of citizens from all over Europe in the #NoECT campaign is a clear message sent to political decision-makers. It is urgent that the EU and its member states act upon these demands and pave the way for a carbon-neutral future. European energy ministers have an opportunity to make progress in this regard at their meeting on 22 April.”
*Climate Action Network (CAN) Europe, Corporate Europe Observatory, the Transnational Institute, Avaaz, Campact, WeMove, tilt! and many others. Petition on https://www.tilt.green/noect.
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