A bad day for climate killers: EU Parliament gives green light to phase out Energy Charter Treaty

Berlin, 24.04.2024: Today, at its last session of this legislative term, the European Parliament overwhelmingly approved the EU's withdrawal from the Energy Charter Treaty (ECT). 560 MEPs voted to leave the EU, 43 against and 27 abstained.

Fabian Flues, trading expert at PowerShift, comments on the decision: “This is an important success for climate action. The EU is finally leaving the Climate Killer Energy Charter Treaty. The overwhelming majority in Parliament shows that non-transparent arbitration tribunals have no place in our democratic community. Now the EU must do everything in its power to rule out new lawsuits in the future."

The withdrawal has yet to be confirmed by the European Council, which is expected to vote on it in May. Consent is considered secure.

Millions of lawsuits against state climate and environmental protection measures by investors before controversial arbitration tribunals have repeatedly criticized the contract. Last autumn, the raw materials group Klesch Group filed a lawsuit against Germany, Denmark and the EU against the taxation of excess profits in the energy sector. The Swiss energy company AET launched a case against the German coal phase-out in October.

Germany’s withdrawal from the ECT became valid in December 2023. In addition to Germany, 11 other states have withdrawn from the Energy Charter Treaty or have announced their withdrawal. The UK recently announced its intention to withdraw from the treaty. It is expected that, together with the EU, other states will leave the treaty. A legal opinion has shown that the risk of being sued under the ECT increases for EU member states after an EU exit.

Existing investments will continue to be protected under the Energy Charter Treaty 20 years after the withdrawal. The EU is currently negotiating an agreement to limit this possibility.

Further information:

• PowerShift study “Consequences of the EU withdrawal from the Energy Charter Treaty”: https://power-shift.de/eu-austritt-energiecharta-vertrag/

If you have any questions, please do not hesitate to contact:

• Fabian Flues, Trade and Investment Policy Officer at PowerShift, fabian.flues@power-shift.de, 0159 06113733
• Adrian Bornmann, Press and Public Relations Officer at PowerShift, adrian.bornmann@power-shift.de, 017672773137