Why might the EU pull out of the Energy Charter Treaty?

(Context, 24 Nov 2022) The EU is edging closer to pulling out of the Energy Charter Treaty, which has enabled energy firms to sue when government carbon-cutting plans affect their profits.

The European Parliament is calling for the whole bloc to exit a controversial international energy treaty over climate concerns, in a move that casts doubt on the future of the agreement.

Since the late 1990s, the Energy Charter Treaty (ECT) has allowed energy firms and investors to sue governments whose plans to cut emissions from fossil fuels could hurt corporate profits.

Its critics say the threat of legal action under the ECT could deter governments from enacting clean energy policies vital to achieving international climate goals.

At a conference in late November, the treaty’s signatory countries were due to vote on adopting reforms to modernise the treaty in line with evolving policy agendas to tackle global warming.

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Context, 24 Nov 2022: Why might the EU pull out of the Energy Charter Treaty?