The European Union and the 27 Member States that have ratified the Energy Charter Treaty (ECT) – Italy withdrew from the text in 2016 – must ensure that the revision of this text ends or withdraws from its current protection of fossil fuels – considered 278 civil society organisations and trade unions in an open letter published on Monday 9 December.
“The Energy Charter Treaty is totally outdated, it’s a boon to dirty fossil fuel companies. [...] Either the EU and member states fundamentally revise it, or pull out”, said Paul de Clerck, coordinator for economic justice at Friends of the Earth Europe.
As discussions on the revision of this treaty begin this week in Brussels, these organisations believe that, in its current form, the ECT could seriously undermine the objectives of the European Green Deal.
In their letter, they specifically call for the removal of the investor-state dispute settlement mechanism (ISDS) provided for in the treaty. This mechanism allows foreign investors in the energy sector to sue governments directly before ad hoc arbitration tribunals and claim compensation of up to billions of dollars if their (future) profits are affected.
The Swedish electricity production and distribution company Vattenfall, for example, is claiming €6.1 billion from Germany for its phase-out of nuclear energy following the Fukushima disaster.
As countries develop more and more plans for climate neutrality and a transition to clean energy, the open letter states that “the ECT has been ‘and will increasingly be’ used by fossil fuel and nuclear energy companies to challenge government decisions to phase out such energy sources”.
The letter also asks to pause the extension of the ECT to new countries.
To consult the open letter: https://bit.ly/38jidRu (Original version in French by Damien Genicot)