Great success for climate and democracy: Germany announces withdrawal from the Energy Charter Treaty
Munich/Berlin, 11 November 2022. After years of protests by climate activists against the Energy Charter Treaty (ECT) and two years of unsuccessful negotiations on its reform, the Federal Government now announces: Germany will withdraw from the ECT anti-climate agreement.
In recent years, corporations have used the ECT for billions of dollars in lawsuits against states that wanted to phase out fossil fuels or introduce higher environmental protection standards. In Germany alone, the treaty protects fossil-fuel investments of more than 54 billion euros. In the past, environmental and climate protection organisations had repeatedly pushed for the contract to be terminated so that the energy transition would not be slowed down.
The Umweltinstitut München was recently able to prove with a legal opinion that the reformed ECT also violates applicable European law. Due to the so-called sunset clause The contract protects existing investments for a further twenty years from termination. However, as the legal opinion proves, European states can defend themselves against the enforcement of any arbitration rulings and thus render the clause ineffective.
Ludwig Essig, Trade Policy Officer at the Munich Environmental Institute, comments: “Our years of work have paid off: The fact that Germany is withdrawing from the Energy Charter Treaty is a fanal for climate protection and our democracy. The beginning of the end for investment protection for fossil energies has been made. Now the withdrawn states in Europe must defend themselves against the treaty clause, which is to guarantee another twenty years of investment protection for fossils. We have shown with a legal opinion how this can be done. Now it is important not to let go and continue to fight for a consistently social and climate-friendly policy. We would like to thank all our supporters and colleagues from the other NGOs – today is a historic day for climate action.”
The climate defenders are now pushing for the exit of the entire EU, because they see the EU heading for a scenario that is both politically and legally dangerous: If more and more member states want to leave on the one hand, but vote for reform on the other hand in the Council, the EU remains a member of the ECT. Full ratification of the reformed treaty text by all EU member states takes years at best and will never happen in the worst-case scenario. This would leave the EU itself trapped in the old ECT, even though many Member States have already left. In the EU, the UK and Switzerland alone, ECT is currently protecting fossil projects worth more than 344 billion euros.
“Germany has taken a decisive step towards climate protection by withdrawing from the Energy Charter Treaty”, says Fabian Flues, trade expert at PowerShift. “But if the EU does not leave, we could still be trapped in the Treaty for years to come. That is why it is right and important that the Federal Government does not agree to the reform in the European Council. All major EU member states have announced an exit. The European Commission must now finally abandon its blockade stance and put forward a proposal for a joint exit.”
For more information:
Expert opinion of the law firm Günther on behalf of the Environmental Institute: http://www.umweltinstitut.org/fileadmin/Mediapool/Pictures/01_Themes/02_Energy-and-Climate/ECT/Enforcement_ECT_-_FINAL-3.PDF
More information about the ECT: http://www.umweltinstitut.org/fileadmin/Mediapool/Images/01_Themes/02_Energy-and-Climate/ECT/How_ECT_reform_could_resurrect_a_climate_monster_GERMAN_VERSION.pdf
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Press contact
Fabian Flues
Team Trade & Investment Policy
PowerShift e.V.
Tel.: 0159 0611 3733
fabian.flues@power-shift.de
Ludwig vinegar
Department of Trade Policy
Environmental Institute Munich e.V.
Tel.: 0176 546 752 53
le@umweltinstitut.org
Annette Sperrfechter
Environmental Institute Munich e.V.
Press Spokesperson
Tel.: 089 307749-77
as@umweltinstitut.org
