As proposed by the Socialists and Democrats, the European Parliament today urged the Commission to proceed immediately with the coordinated exit of the EU from the ECT and called on member states to support such a proposal. This is the best option to prevent the ECT from putting the EU’s climate and energy security ambitions in jeopardy.

Last Tuesday, the Energy Charter Conference was meant to approve the modernised ECT, but the Council failed to reach a qualified majority in favour of the modernisation. The proposed reform was thus removed from the agenda of the Conference.

Despite the Commission’s negotiation efforts, the proposal for a modernised ECT is not fully aligned with the Paris Agreement nor EU climate goals. It leaves fossil fuel investments protected for over a decade, and fails to substantially modify the controversial ISDS mechanism*

Inmaculada Rodríguez-Piñero, S&D spokesperson on trade, said:

“The S&D Group has been calling for an EU coordinated exit from the Energy Charter Treaty given the shortcomings of the modernised treaty and the recent developments in the Council. Today, this has translated into a common, clear demand made by the European Parliament.

“Despite the reform, the ECT is a barrier for climate actions and efforts to get rid of fossil fuels. In particular, the core of the old dangerous private arbitration system remains unchanged, leaving the door open to costly private arbitration cases. 

Note for the editors:

Under the ECT, companies can attempt to claim compensation from governments who thwart their investments. They do this through the so-called investor-state dispute settlement (ISDS), a private arbitration mechanism. This has allowed polluting companies to challenge climate action in secretive tribunals, creating a dangerous chilling effect on climate policies.