By: Cleodie Rickard
Date: 7 December 2022
Campaigns: Trade

We’ve been campaigning over the past two years for countries to exit the Energy Charter Treaty (ECT) – a little known trade agreement that fossil fuel companies are using to sue governments over their climate action. And we’re winning.

With campaigners and activists across Europe we’ve fought to expose its dangers, get a critical mass of countries to leave and cause the whole thing to crumble. Now it’s happening before our eyes.

Countries rush to exit the toxic treaty

As we near the end of 2022, Germany, France, the Netherlands, Spain, Poland, Slovenia and Luxembourg have all announced they’re leaving the ECT, and the European Parliament just voted for exit. The treaty is collapsing.

But the UK is staying silent – even as its weak excuses for staying in the climate-wrecking agreement slip away. Most recently, a crucial annual meeting held in November heralded a major defeat for supporters of the ECT. It was set to approve so-called ‘reform’ proposals put together to try and patch up the broken treaty. But as country after country realised the ECT is past the point of fixing and announced their exit, the lack of support from member countries meant the reforms have not been passed.

The collapse of the ‘modernisation’ process leaves the treaty in a state the UK government itself has admitted is insupportable. Then-energy minister Greg Hands said in June that the ECT is an “outdated treaty which holds back investment in clean energy and puts British taxpayers at increased risk from costly legal challenges.”

The threat to the UK’s climate action

Besides their failure, the ‘reforms’ fell far short of what’s necessary facing the climate crisis: they would lock in the protection of fossil fuel projects that must be cancelled within the next decade if we are to keep to our climate commitments and liveable temperatures.

Dirty projects such as extended licences for North Sea oil and gas fields like Cambo and Rosebank would continue to be protected under this secretive legal framework. The risk to the UK is huge: if Westminster were to cancel all projects that don’t fit the International Energy Agency’s pathway to net zero, it would leave the UK liable for potential ECT lawsuits totalling an eyewatering £9.4bn.

If the UK stubbornly stays in the Energy Charter Treaty while others leave, this will allow some of the world’s most polluting corporations to continue to use it to disrupt and deter climate action. It means locking in the risk of being sued by fossil fuel companies over necessary climate policies and the UK public shouldering billion-pound payouts to polluters.

Time to face reality – and exit the ECT

The government says it is “monitoring the issue” – but the momentum for change is now, and a cascade of countries are voting with their feet. The UK must face up to the reality that the treaty is on its way out: by joining other countries in a coordinated withdrawal they can be part of the vanguard, and avoid the treaty’s ‘sunset’ clause.

We’re keeping up the pressure, making sure that proponents of the ECT can’t resuscitate it to stumble on for a bit longer. The UK leaving could be its deathknell.

The existence of this toxic treaty is one of the greatest threats to governments taking real action on the climate crisis, and one of the biggest enablers of the power of fossil capitalism. But with the help of our supporters and fellow campaigners, we’re close to getting this big victory over the line.

Take action

Tell your MP: The UK must exit the Energy Charter Treaty

Sign the petition: Don’t let corporate courts block climate action

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Photo: David Mirzoeff