The EU’s deal on the ECT risks keeping Europe locked into climate wrecking fossil fuels for years to come. The reform agreed today of one of Europe’s most outdated agreements – the Energy Charter Treaty (ECT) – falls short of the original mandate and doesn’t comply with the goals of the Paris agreement or the European Green Deal.
Here’s our first assessment of the agreed compromise that continues to protect fossil fuel companies and their investments:
- Fossil fuel investments will remain protected indefinitely in a large number of countries
- The investor-state dispute settlement (ISDS) mechanism, which was always incompatible with EU law, is unchanged. ISDS was declared ‘unacceptable’ by the EU 5 years ago, but it is still in the modernised ECT, making it potentially illegal.
- Fossil fuel projects in the EU and the UK will no longer be protected, but the process is way too slow.
- Existing investments will be protected until 2033, which is the exact time in which all major energy transition measures need to be taken. This means companies can continue business as usual and undermine the energy transition.
- While new investments no longer receive protection from August 2023 onwards, there are massive loopholes for gas pipelines, gas power stations and hydrogen investments. These could be protected until 2040. Unfortunately, these areas are forecast to receive massive investments in the next decade. The risk of litigation will not diminish.
- The range of protected energy sources has expanded in comparison to the existing ECT agreement and will now include CCS, hydrogen, biomass and biogas, increasing the risk of litigation even further.
Paul de Clerck, trade campaigner at Friends of the Earth Europe commented:
“The agreement is a disaster as it will lock the EU in fossil fuel investment protection for at least another decade and till 2040 for new gas infrastructure. It even expands protection for hydrogen and biomass, thereby extending the risks of litigation. It also keeps a secretive ISDS system at odds with EU law. To make matters worse, the European and national parliaments won’t even get the possibility to vote on such an important deal. The whole process is deeply undemocratic and unacceptable and we call on member states to pull out of the ECT.”