This briefing highlights the role played by the Energy Charter Treaty (ECT) in the German coal phase-out. It shows that the ECT has influenced the coal phase-out in two important ways:
(1) In order to ensure that companies do not use the ECT for investment disputes, a contract was negotiated between the Federal Government and the largest coal companies, RWE and LEAG. Within this legal framework, the companies had enormous bargaining power and were thus able to pass on the risks of the coal phase-out to the general public.
(2) The coal companies were reimbursed at an unusually high level for the waiver of a legal remedy under the ECT agreed in the contracts. As the German Government has admitted, this waiver was an important factor in the otherwise inexplicably high compensation granted to LEAGundRWE.
The case of the German coal phase-out shows how the ECT makes the ECT's phase-out of fossil fuels considerably more difficult and expensive. An immediate exit from the ECT is therefore essential
to ensure that it does not similarly impede the phasing out of the remaining fossil fuels.
