The Energy Charter Treaty has hampered the ability of governments to impose climate policies for years. As we speak, however, the European Commission is reportedly redrafting the treaty to ensure its 52 nations are phasing out fossil fuels.
As the world aims to transition to more renewable forms of energy, a covert layer of bureaucracy protecting fossil fuel investment could soon be removed. Yeh, this is potentially very good news.
If you haven’t heard of the Energy Charter Treaty, it was a reform created in the 1990s to protect the profitability of its 52 nations.
Whenever foreign policies popped up threatening a country’s projected finance prospects, this would allow members of the bloc to sue states within a covert court system.
It’s often used by corporations to side-step domestic tribunals, keeping everything under wraps and settling disputes away from prying eyes in the mainstream media.
A dream for the fossil fuel industry
Given that last point, it probably won’t come as a surprise to hear that this mechanism is used by the fossil fuel industry more than any other.
Policy measures intended to keep us on track for our climate targets are constantly challenged – you just don’t always hear about it.
There’s no cap on the size of compensation windfalls either, meaning governments are at odds with curbing global warming and getting slapped with huge reprisals from disgruntled fossil fuel giants.
One high-profile story that did make the papers recently involved the eyewatering award of £210m to British oil firm Rockhopper, after Italy’s 2015 offshore oil ban put several of its projects on hold.
In recent years, there has been constant pressure to get the reform amended. As we sit here today, potentially vital changes are finally on the cusp of being pushed through.
BREAKING! The Polish parliament has today voted with an overwhelming majority (418 out of 436 votes) to withdraw from the #EnergyCharterTreaty. The upper chamber still needs to approve. Poland will be the first EU country to withdraw after Italy but it won't be the last! #noECT pic.twitter.com/eLiGhBqeVX
— Cornelia Maarfield (@climate_trade) October 6, 2022