Debate over ECT’s future grows as November vote approaches

Ahead of a critical vote this November, the fate of the ECT modernization hangs in the balance amid continued questions over whether the reforms go far enough to render the agreement compatible with global climate action goals under the UN’s Paris Agreement.

While the ECT’s contracting parties struck an agreement in principle on reforms to modernize the treaty in June, the text of that agreement did not become public until September, when it was published by POLITICO Pro. The newly released text confirms the earlier details that the Energy Charter Conference had announced in June in a brief public communication. The text also clarifies other aspects of the modernization reforms that had not previously been known, such as the removal of the current treaty’s non-derogation clause.

However, the text leaves unclear other key elements that would affect the treaty’s climate impact. For instance, while the EU and the United Kingdom have moved to carve out some fossil fuel investments from being protected under the modernized ECT, when those carve-outs would enter into force is not yet known. Also uncertain at this stage is whether those contracting parties that are present and voting will unanimously adopt the modernized ECT when the Energy Charter Conference convenes on November 22, as is required by the treaty’s voting rules.

Some EU member states have already signalled their discomfort with the modernized ECT. For example, Spain’s Deputy Prime Minister Teresa Ribera told POLITICO in June that the EU and its member states should move to leave the existing treaty, rather than signing onto the reforms.

“At a time when accelerating a clean energy transition has become more urgent than ever, it is time that the EU and its member states initiate a coordinated withdrawal from the ECT,” Ribera told the news outlet at the time. Along with being one of Spain’s deputy prime ministers, Ribera also serves as the government’s minister for ecological transition.

Separately, a draft law is under consideration in Poland to unilaterally withdraw from the current ECT, which cites among other reasons concerns about the treaty’s investor–state dispute settlement mechanism and the expectation that the modernization would not rectify that aspect. France is among the other ECT contracting parties to have floated withdrawal as an option in the past, depending on the outcomes of the modernization.

The treaty also continues to draw harsh criticism from international advocates for environmental action, who note the long history of fossil fuel investors using the ECT to challenge governments’ climate mitigation measures. Ian Fry, the United Nations Special Rapporteur on the promotion and protection of human rights in the context of climate change, named the “repeal of the Energy Charter Treaty” as one of the moves that could help in “bridging the climate mitigation gap” in a new report sent to the UN General Assembly.

The upcoming Energy Charter Conference vote will come on the heels of the United Nations Framework Convention on Climate Change’s Twenty-Seventh Conference of the Parties (COP 27) in Sharm El-Sheikh, Egypt, scheduled for November 6 to 18. With legal experts also calling into question whether the ECT has put at risk pledges made at COP 26 in Glasgow last year, what the modernized ECT could mean for both those outcomes and for whatever may emerge from COP 27 could further compound the debate.