According to climate campaigners, a pact to revise a "dangerous" energy accord fails to make the agreement consistent with the urgency of the global issue.

After more than four years of negotiations, 52 nations and the EU agreed on Friday to "modernize" the energy charter treaty, a 1994 pact that empowers investors to sue governments if changes in energy policy impair their profits.

A former whistleblower described the treaty as a "real threat" to the landmark Paris climate agreement, which aims to limit global warming to 1.5 degrees Celsius because it is feared that governments will spend their green transition budgets compensating the owners of coal mines, oil wells, and other fossil fuel projects.

This week, 76 climate experts warned EU leaders that even a modernized ECT would "jeopardise the EU climate neutrality target and the EU green deal” alluding to a slew of policy initiatives unveiled last year to address the climate catastrophe.

According to the agreement, new fossil fuel investments would no longer be safeguarded in the EU and the UK beginning in mid-August 2023. Existing fossil fuel investments in the EU and the United Kingdom would lose protection after ten years. However, the 10-year phase-out for oil and gas does not take effect until the treaty is approved by three-quarters of the ECT's 53 members.

Furthermore, the fossil fuel exception does not obligate governments. While the EU and the UK have opted to eliminate protection for oil and gas investments, other ECT members, such as Central Asian governments, Switzerland, and Japan, can continue to do so. The agreement is scheduled to be formally approved by member nations in November, but each capital must still ratify it.

Amandine Van Den Berghe, a lawyer at the NGO ClientEarth stated that “with a 10-year phase-out period for fossil fuel investments, EU countries could still be sued for putting in place progressive climate policies for at least another decade – the key window for action if humanity is to avoid climate catastrophe."

Referring to the decision to extend treaty protection to these areas, she said, “The new treaty will also open the door to a wave of financial compensation claims protecting investments in energy sources and technologies raising significant sustainability concerns, such as biomass, hydrogen and carbon capture storage."

“The bottom line is we are still left with a dangerous agreement that will obstruct urgent action to tackle the climate crisis for years to come. The EU must finally do what is necessary for climate and legally right: walk away.”

France, Germany, Spain, Poland, and the Netherlands have asked the European Commission to investigate exiting the pact. This week, Spain's Deputy Prime Minister expressed her worries publicly.

Coordinated withdrawal

Teresa Ribera, speaking before the result of the discussions, stated that 14 rounds of talks on changing the treaty had demonstrated that it "will fail to ensure the alignment of the ECT with the Paris agreement and the objectives of the European green deal." She told Politico it was time for the EU and its member states to “initiate a coordinated withdrawal" 

EU authorities claim that all 27 EU member states have supported their negotiation position. Officials say that exiting the pact would not defend EU interests since investors would have a 20-year window to sue governments due to a lengthy sunset provision.

According to the commission, the ECT preserved “the right of governments to pursue their public policy objectives, including for climate change mitigation and adaptation. This fully preserves the EU’s ability to develop our climate policies. We have thereby aligned the ECT with the Paris agreement and our environmental objectives.”

Climate activists argue that governments might withdraw from the pact and agree to shield each other from ECT claims.

Chloé Mikolajczak, a spokesperson for Extinction Rebellion Belgium said, “We are talking about timeframes that could protect the benefit of the fossil fuel industry well into 2030, and the thing is we don’t have time to wait until 2030 for climate action, we need it now."

Extinction Rebellion protesters delayed the opening of treaty discussions by approximately an hour on Thursday by clinging themselves to conference tables, before being torn up by police.

A few dozen demonstrators conducted a "die-in" outside the ECT secretariat's Brussels headquarters, lying on the entrance steps among fake oil and holding a banner that read "stop protecting fossil fuel profits."

Mikolajczak stated that the deal will continue to be targeted as "any policy that is harmful to the climate."

The British government praised the deal, saying it will safeguard "the UK government’s sovereign right to change its own energy systems to reach emissions reductions targets in line with the Paris agreement."

“The UK cannot support an outdated treaty which holds back investment in clean energy and puts British taxpayers at increased risk from costly legal challenges,” said Greg Hands, the energy minister.