The Netherlands to exit a treaty protecting fossil fuels

In June, the European Union (EU) obtained a reform of the little-known Energy Charter Treaty (ECT), but the compromise is considered insufficient by NGOs, which are asking the Europeans to withdraw from it. Environment and Energy Minister Rob Jetten believes that even reformed, the treaty “cannot be reconciled with the Paris agreement” on climate, his ministry told AFP.

“For this reason, the Netherlands, preferably with the whole of the EU, will leave the ECT,” he said, adding that the date of the Netherlands’ official exit was still to be determined. The treaty was signed in 1994, at the end of the Cold War, to offer guarantees to investors in the countries of Eastern Europe and the former Soviet Union. Bringing together the EU and 52 countries (from Europe, Central Asia, but also Turkey and Australia), it allows companies to claim, before a private arbitration tribunal, compensation from a State whose decisions affect the profitability of their investments, even when the policies are pro-climate.

A typical case: after the adoption of a Dutch law banning coal by 2030, the German energy company RWE is claiming 1.4 billion euros from The Hague to compensate for its losses on a thermal power plant. Faced with the increasing number of disputes, the Europeans have been trying to modernize the text since 2020. After bitter talks, they obtained in June in Brussels an agreement in principle of the signatory countries on a compromise, which will have to be confirmed in November by a formal unanimous vote. Russia withdrew from the treaty in 2009, followed by Italy in 2015.