Both Ends | March 2022
Energy Charter Treaty (ECT) reform: Why it has failed to deliver on the EU’s own objectives
Summary of key issues
What is the ECT? A trade and investment treaty which protects investments in the energy sector.
Its provisions, effectively unchanged since conception in 1994, include the ability for fossil fuel investors to sue governments through private tribunals for multiple-billions of dollars if action on climate change and the environment damage their future profits.
• EU and Member States recognise the ECT is out of date.
• Reform process started in 2018. In 2019, the European Commission received a negotiation mandate with a threefold objective. Analysis of progress reveals that the Commission mostly failed to achieve those ambitions.
• The European Commission intends to politically sign off the reform in June 2022.
• Honest evaluation of progress must balance against the possibility of joint EU withdrawal.
• Solutions can and must include action to neutralise the 20-year sunset clause and measures to ensure a socially just energy transition.