The Energy Charter Treaty

The Energy Charter Treaty (ECT), introduced in 1994, is an international investment treaty in the energy sector spanning Europe and parts of Asia. Today it is widely recognized as an obstacle to the green energy transition and a safeguard for the fossil fuel industry. The ECT has attracted more investor-state dispute settlement (ISDS) claims from fossil fuel companies against states than any other investment treaty, costing governments hundreds of millions of dollars for introducing climate change policies.

In July 2023, the European Commission proposed a coordinated withdrawal by the European Union (EU), its member states, and Euratom from the ECT, citing the treaty's incompatibility with the EU's climate targets under the European Green Deal and the Paris Agreement. During the twelve months prior to the Commission's proposal, a host of large EU member states—including Germany, France, Spain, and the Netherlands—had decided to walk away from the treaty. In February 2024, the UK also announced its departure from the treaty. The European Parliament will vote on the EU's withdrawal from the ECT in April 2024.

IISD has consistently advanced an EU withdrawal from the ECT, both publicly and behind the scenes, and has played a leading role throughout the developments.

Through in-depth research, live analysis, regular events, direct outreach to political decision makers, awareness-building across civil society and media, and shaping of the public conversation, IISD continues to promote an outcome that accelerates the phase-out of fossil fuels. In addition, we are working to prevent the model from being replicated in regions of the Global South.

Together with our academic and civil society partners, IISD will continue to lead on the redesign of the international energy investment landscape in the months and years ahead, to ensure that it promotes the green energy transition and helps accelerate the phase-out of fossil fuels.