The World Briefly

October 20, 2022

Giving Up

The Netherlands

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The Netherlands will withdraw from the Energy Charter Treaty (ECT), the latest European country to leave the contentious international agreement that has been criticized for the protections it offers to fossil fuel projects, Politico reported.

The Dutch withdrawal comes as the European Union attempts to reform the treaty.

The ECT has come under fire by climate activists and green politicians for allowing investors to sue governments in closed tribunals over policies directed at cutting emissions.

Currently, the Netherlands is facing two lawsuits under the treaty from coal-plant operators who are seeking compensation for lost profits as a result of the country’s strategy to phase out the polluting fuel.

An effort by the EU to reform it was resisted by other members of the 50-plus-country treaty. Instead, the EU and the UK secured exclusions that permitted them to phase out coal, oil, and gas protections over a 10-year period.

Dutch Minister of Climate and Energy Policy Rob Jetten acknowledged that there had been some improvements. However, he added that the decision was necessary because the Netherlands does not “see how the ECT has been sufficiently aligned” with the 2015 Paris agreement on tackling climate change.

The proposed reform will still need approval from the EU. Jetten said the Netherlands will vote in favor of the proposal, despite the country’s exit.

Meanwhile, French officials said they are assessing the reform process and hinted they could withdraw from the ECT if the changes did not “match our ambitions and objectives.”

Anna Cavazzini, a Green lawmaker in the European Parliament, said the Dutch exit will “create shockwaves through the whole system.”

“The message is clear: The world has changed. States cannot accept a blanket protection of dirty investments anymore,” she added.

This story originally appeared in the October 20, 2022 newsletter, The Quiet Bienvenue.