Thank you to all those who have contacted me about the Energy Charter Treaty. 

I appreciate the concerns you raise.  It is increasingly clear that the ECT in its current form has become a major barrier to effective international action to tackle the climate crisis, with energy companies using the treaty’s investor-state dispute settlement (ISDS) provisions to challenge plans to move to net zero.

In particular, where companies are able to claim their investments in fossil fuel extraction are being damaged by government intervention, they can use the ECT to sue for damages or use the threat of lawsuits to deter governments from acting. We see, for example, the case of RWE suing the Netherlands for €1.4 billion over the phase-out of coal and of UK oil company Rockhopper, which is suing Italy over a ban on offshore drilling.

As you will know, in June members of the ECT reached agreement in principle for reforms to the treaty, including a “flexibility mechanism” allowing signatories to exclude fossil fuels from investment protection in their territories. A decision on these reforms was due at the Energy Charter Conference on 22 November. However, following the announced withdrawal of several EU states from the treaty, the European Commission failed to achieve a mandate to negotiate on these reforms and they were removed from the agenda of this meeting, putting any reform on hold.

I know that campaigners are concerned that even a reformed treaty would protect fossil fuel projects that need to be cancelled and allow UK fossil fuel companies to continue to sue governments who choose not to exclude fossil fuel investments from protection. Furthermore, given that the UK Government is approving new licences for oil and gas projects, I am concerned at the possibility of the UK being sued later over projects being approved currently. I can therefore assure you that I will continue to monitor this issue and support efforts to press the Government on it, keeping in mind the important concerns you raise.

More widely, I can also assure you that I oppose any ISDS clauses in future trade deals that deter action to protect the environment.

Thank you once again for contacting me on this.