Climate Manifesto:
Policies to deliver action and justice

Exit the Energy Charter Treaty

The UK Government should exit the Energy Charter Treaty, and the Scottish Government should call on them to do so.

The Energy Charter Treaty (ECT) is an investment agreement between 50 countries specifically for the energy sector. At the core of the ECT is the contentious investor state dispute settlement (ISDS) mechanism. This allows foreign companies to sue governments outside of the national legal system in secretive tribunals. ISDS in the ECT is being used by fossil fuel companies to sue governments for actions they take to address the climate emergency, such as phasing out coalfired power stations, and banning fracking and oil drilling. The amounts at stake can be in the billions. The ECT has already generated at least 135 claims, making it the world’s most litigated ISDS agreement. The ECT is opposed by a wide range of civil society groups.¹³⁷

After the departure of a number of its member states from the Treaty, the EU is thought to be planning an exit as a bloc from the Energy Charter Treaty.¹³⁸

This policy is very relevant for the Scottish Government as their climate policies are at threat through the UK being a party to the Treaty, and by coming out and publicly saying that the UK should leave the ECT they would be putting pressure on the UK government to do so. Leaving the ECT would take away a major threat to governments’ climate policies and actions.

For further information:

• The Energy Charter Treaty – an unsustainable risk, Global Justice Now, February 2023, https://www. globaljustice.org.uk/wp-content/uploads/2023/02/ECT-parliamentary-briefing_Feb-2023.pdf