‘Either we kill it, or it will kill us’: The fight to dismantle a shadow court system threatening climate goals

Published

4 years ago

November 28, 2021

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Electricity transmission pylons beside the gas-fired power plant, operated by Uniper SE, in Irsching, Germany, on Wednesday, July 7, 2021.

Michaela Handrek-Rehle | Bloomberg | Getty Images

LONDON — The Energy Charter Treaty is not widely known, yet it’s feared the influence of this international agreement could be enough by itself to derail hopes of capping global heating to 1.5 degrees Celsius.

The ECT contains a highly contentious legal mechanism that allows foreign energy companies to sue governments over climate action that could hurt future profits.

These “corporate court” cases, sometimes referred to as investor-state dispute settlements, are highly secretive, take place outside of the national legal system and can often lead to far larger financial awards than companies might otherwise expect.

Five fossil fuel companies are already known to be seeking over $18 billion in compensation from governments over energy policy changes and most of these have been brought via the ECT.

For example, Germany’s RWE and Uniper are suing the Netherlands over coal phase-out plans and the U.K.’s Rockhopper is suing Italy over a ban on offshore drilling.

Not only do countries have to get out of that treaty, they have to torpedo it on the way out.

Julia Steinberger

Ecological economist and professor from the University of Lausanne

A spokesperson for Uniper told CNBC: “The Dutch government has announced its intention to shut down the last coal-fired power plants by 2030 without compensation.

“Uniper is convinced that shutting down our power plant in Maasvlakte after only 15 years of operation would be unlawful without adequate compensation.”

RWE said it “expressly supports the energy transition in The Netherlands. In principle, it also supports the measures to reduce CO2 associated with the law, but believes compensation is necessary.”

Rockhopper did not respond to a request for comment.

The number of these corporate court tribunals is expected to skyrocket in the coming years, a trend that campaigners fear will act as a handbrake on plans to transition away from fossil fuels.

Governments that are prepared to implement measures to tackle the climate crisis, meanwhile, could be hit with enormous fines.

“The Energy Charter Treaty is a real trap for countries,” Yamina Saheb, an energy expert and former ECT Secretariat employee turned whistleblower, told CNBC via telephone.

Saheb quit her role with the Secretariat in June 2019 after concluding it would be impossible to align the ECT with the goals of the landmark Paris Agreement. She said any attempt to reform or modernize the treaty would ultimately be vetoed since many member states are heavily reliant on fossil fuel revenues.

Thick smoke, cloud of water vapour comes out of the cooling towers of the lignite-fired power plant Weisweiler of RWE Power AG in Germany.

Horst Galuschka | picture alliance | Getty Images

“If we withdraw, we can protect ourselves, we can start implementing the climate neutrality targets and we can end the promotion of the expansion of this treaty to other developing countries,” Saheb said.

“I think the only way forward is to kill this treaty,” she added. “Either we kill this treaty, or the treaty will kill us.”

The ECT Secretariat was not immediately available to respond when contacted by CNBC.

The treaty has said its fundamental aim is “to strengthen the rule of law on energy issues by creating a level playing field of rules” that help to mitigate the risks associated with energy-related investment and trade.

Who’s involved and how does it work?

The ECT is a unique multilateral framework that applies to more than 50 countries — mostly in Europe and central Asia — and includes the European Union, the U.K. and Japan among its signatories. It is currently looking to expand to new signatory states, particularly in Africa, Asia and Latin America.

Signed in 1994, the ECT was primarily intended to help protect western companies investing in former Soviet Union countries in the post-Cold War era. It was also designed to help overcome economic divisions by ensuring a flow of western finance in the east through binding investment protection.

It has since been sharply criticized by more than 200 climate leaders and scientists as a “major obstacle” to averting climate catastrophe.

Dozens of people walk through water due to heavy rains causing flooding in Dhaka, Bangladesh on October 7, 2021.

Sumit Ahmed | Eyepix Group | Barcroft Media | Getty Images

“I think the treaty is probably by itself enough to kill 1.5 [degrees Celsius],” Julia Steinberger, ecological economist and professor from the University of Lausanne, told CNBC.

“I know that 1.5 is a very tight target and there are a lot of things that can blow it, but it is because it basically saves fossil fuel industries … from the financial collapse that they should face for their risky — and honestly criminal — investments in a harmful technology.”

Corporate court hearings brought via the ECT take place in private and investors are not obliged to acknowledge the existence of a case, let alone reveal the compensation they are seeking.

The average cost of investor-state dispute settlement cases is estimated at roughly 110 million euros ($123.9 million), according to an analysis of 130 known claims by think tank OpenExp, and the average cost of arbitration and legal fees is thought to be around 4.5 million euros.

International environmental law experts say that even the threat of legal action is thought to be highly effective in chilling domestic climate action — and fossil fuel companies are acutely aware of this.

That’s because governments may struggle to allocate resources to a single issue when accounting for other priorities. The threat of legal action becomes progressively more powerful as the budget of the country involved becomes smaller.

Notably, a ruling in favor of the state does not lead to zero cost for taxpayers because the defendant state must pay for legal and arbitration fees.

“Not only do countries have to get out of that treaty, they have to torpedo it on the way out,” Steinberger said. “And that’s something a unit the size of the European Union could do.”

A spokesperson for the EU was not immediately available to comment when contacted by CNBC.

The EU completed its eighth round of negotiations to modernize the ECT earlier this month, with the ninth round of talks scheduled for Dec. 13.

France, Spain and Luxembourg have all raised the option of withdrawing if the EU’s modernization efforts fail to conform to the Paris accord.

What happens if countries withdraw?

Italy withdrew from the ECT in 2016, but it is currently being sued because of a 20-year “sunset clause” which means it is subject to the treaty through to 2036.

Around 60% of cases based on the treaty are intra-EU, with Spain and Italy thought to be the most sued countries. Saheb said that given most of these cases are within the bloc itself, a coordinated withdrawal would likely kickstart a domino effect, with states such as Switzerland, Norway and Liechtenstein seen as likely to follow suit.

And if the bloc were to withdraw from the treaty collectively, member states could agree to remove the legal effects of the sunset clause themselves.

“That sunset clause is much longer than many sunset clauses in other treaties but is also completely incompatible with the notion that regulations need to evolve with the changing reality of climate change, to the changing demands of safeguarding the environment and human rights,” Nikki Reisch, director of the Climate & Energy Program at the Center for International Environmental Law, told CNBC.

“There’s a really strong case to make that the application or enforcement of that sunset clause is contrary to other principles of international law,” she added.

A view of open freight wagons full of coal under smog during a day that the level of PM2.5 dust concentration amounted to 198 ug/m3 on February 22, 2021 in Czechowice Dziedzice, Poland. The central eastern European country has the EU’s worst air, according to a report published by the European Environment Agency (EEA).

Omar Marques | Getty Images News | Getty Images

The European Court of Justice ruled in early September that EU energy companies could no longer use the treaty to sue EU governments. The verdict significantly limits the scope of future intra-EU cases and has thrown the legitimacy of a number of ongoing multi-billion-euro lawsuits into question.

“We are not out of the woods yet,” Reisch said. The ruling was an important step to blunting an instrument designed to protect fossil fuel investors, she said, but it does not take arbitration cases by investors domiciled outside of the EU off the table.

“We can’t let our ability to confront the greatest crisis that we have ever faced as humankind, arguably, be held hostage to the interests of investors,” Reisch said.

“I think it is just another reminder of the need to eliminate those legal structures and fictions that we’ve created that really do lock us into a bygone era of fossil fuel dependence.”

Environment

Survey Sunday: we asked how much home charging SHOULD cost, you answered

Published

6 hours ago

November 3, 2025

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Survey Sunday: we asked how much home charging SHOULD cost, you answered

For the last few weeks, we’ve been running a sidebar survey about how much Electrek readers think it would cost to add EV charging systems to their homes. After receiving over twenty-four hundred responses, here’s what you told us.

In our previous survey, we asked readers why they chose to install solar panels at home. In the recap, many of our commenters mentioned having their systems systems pull double duty — charging home backup batteries and topping off their electric cars. That got us thinking: as more and more first-time EV owners look into the many benefits of home charging, how much do they expect to pay for home charging?

Based on over 2,400 responses, this is what you told us.

What do you expect to pay for home charging?

The most positive surprise was that more than a third of Electrek readers who responded to the poll already had 240V outlets in their garage, so they expected to pay effectively $0 – their homes are EV ready now!

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Of the remaining 64%, 44% were fairly evenly split between a relatively straightforward ~$500-1,000 wiring job with a few wiring or panel upgrades while only about 18% expected to spend over $1,000 due to having an older home, a detached garage, or for some other (apparently pricey and/or inconvenient) reason.

Navigating the questions

Just like you would for home solar, we’d recommend getting a quote from several installers before making a decision. One of our trusted partners, Qmerit, offers a quote-sourcing service called PowerHouse. The service scans pricing from thousands of completed electrification installations across North America to provide the best quotes that take regional variability into account and work with homeowners to “bundle” chargers, installation, and even batteries.

America has arrived at an inflection point in which all of the technical, policy and financial elements are in place to support a societal shift toward whole-home electrification. Now what’s needed is a comprehensive way to assemble these complex elements into a simple, financeable, home-energy retrofit that makes it easier to implement.

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Qmerit says its new bundling program can flag the potential for federal, state, and local utility incentives like the ones we’ve covered from Illinois utility ComEd and others that can reduce or even eliminate the upfront costs of home installations for many.

Original content from Electrek.

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Environment

California hits back as CARB takes legal action against truck brands

Published

19 hours ago

November 2, 2025

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California hits back as CARB takes legal action against truck brands

CARB Takes Legal Action Against Truck OEMs in Clean Truck Dispute — AI-generated Gavin Newsom; via ChatGPT.

Following a lawsuit brought against the California Air Resources Board (CARB) by major heavy truck manufacturers over California’s emissions requirements, CARB has struck back with fresh lawsuit of its own alleging that the manufacturers violated the terms of the 2023 Clean Truck Partnership agreement to sell cleaner vehicles.

Daimler Truck North America, International Motors, Paccar and Volvo Group North America sued the California Air Resources Board in federal court this past August, seeking to invalidate the Clean Truck Partnership emissions reduction deal they signed with the state in 2023 to move away from traditional trucks and toward zero-emission vehicles (ZEVs). The main point of the lawsuit was that, because the incoming Trump Administration rolled back Environmental Protection Agency (EPA) policies that had previously given individual states the right to set their own environmental and emissions laws, the truck makers shouldn’t have to honor the deals signed with individual states.

“Plaintiffs are caught in the crossfire: California demands that OEMs follow preempted laws; the United States maintains such laws are illegal and orders OEMs to disregard them,” the lawsuit reads. “Accordingly, Plaintiff OEMs file this lawsuit to clarify their legal obligations under federal and state law and to enjoin California from enforcing standards preempted by federal law.”

After several weeks of waiting for a response, we finally have one: CARB is suing the OEMs right back, claiming that the initial suit proves the signing manufacturers, “(have) unambiguously stated that they do not intend to comply.”

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They want to sell Americans more diesel

In its lawsuit, CARB argues that monetary damages alone would not make the people of the State of California whole as far as damages are concerned, citing that the stated goal of the 2023 Clean Truck Partnership was, “to achieve emissions reductions that cannot be measured strictly in financial terms,” according to ACT-News.

The agency is asking the court to compel the truck companies to perform on their 2023 obligations or, failing that, to allow CARB to rescind the contract and recover its costs. A hearing on the truck makers’ request for a preliminary injunction was held Friday, with another court date set for November 21, when CARB will seek to dismiss the case brought forth by the truck brands. The outcome of these cases could shape how state and federal government agencies cooperation on emissions rules in the future.

You can read the full 22-page lawsuit, below, then let us know what you think of CARB’s response (and their chances of succeeding) in the comments.

SOURCES: CARB; via ACT-News, Trucking Dive.

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Environment

New national law will turn large parking lots into solar power farms

Published

20 hours ago

November 2, 2025

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New national law will turn large parking lots into solar power farms

Mandatory Installation of Solar Panels in Public Parking Lots to Apply Retroactively to Existing Facilities

Starting this month, parking lots in South Korea with more than 80 spaces will be required to install solar canopies and carports. But, unlike similar laws that have been proposed in the US, this new law doesn’t just apply to new construction – existing lots will have to comply as well!

South Korea’s Ministry of Trade, Industry and Energy announced in August that it has prepared an amendment to the Enforcement Decree of the Act on the Promotion of the Development, Use, and Diffusion of New and Renewable Energy to the effect that all publicly- and privately-owned parking lots in the Asian country with room for more than 80 vehicles will be compelled to add solar panels to their lots in a move designed to proactively expand renewable energy and create more solar and construction jobs.

In addition to creating jobs and working to stabilize the local grid with more renewable energy, the proposed solar canopies will offer a number of practical, day-to-day benefits for Korean drivers, as well.

The shaded structures will protect vehicles from heavy rain, snow, and the blistering summer sun — keeping interiors cooler, extending the life of plastics and upholstery, and even helping to preserve battery range in EVs and PHEVs by reducing their AC loads (and, of course, provide charging while the cars are parked).

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To their credit, Ministry officials absolutely get it. “Through this mandatory installation,” one unnamed official told Asia Business Daily, “we expect to expand the distribution of eco-friendly renewable energy generation facilities while providing tangible benefits to the public. By utilizing idle land such as parking lots, we can maximize land use efficiency. In addition, installing canopy-type solar panels can provide shade underneath, offering noticeable comfort to people using parking lots during hot weather.”

The new rule was approved in late September, and is expected to go into effect later this month, with new installation projects set to begin immediately.

It could work here

South Korea is proving that an idea like is practical. Here in the US, we’re proving that out, too – the Northwest Fire District in Arizona partnered with Standard Solar to build a conceptually similar, 657 kW solar carport system across 12 parking lots (shown, above) that delivers more than 1.23 million kWh of clean, emissions-free power annually and offsets the equivalent of 185,000 vehicles’ worth of harmful carbon emissions.

That’s just Arizona. In New York, a new initiative to help expand solar into parking lots has more than doubled commercially zoned land where EV charging stations can be sited, “freeing up” an additional 400 million square feet of space throughout the city.

Sun-rich states like Texas, New Mexico, and Florida could also benefit, and even if we’re “just” adding fresh energy sources to municipal parking, dealer lots, and public schools, we could do a lot to reduce the cost of energy generation for the entire community. And, for what it’s worth, that seems to be right in line with the big reasons why people are choosing to add solar to their homes today.

What do you guys think – would something like this work in the US, or are we too far gone down the sophomoric, pseudo-libertarian rabbit hole to ever dig our way out? Let us know your take in the comments.

SOURCE | IMAGES: Asia Business Daily, via LinkedIn; Standard Solar.

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