‘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

Solar + nuclear to surge in Middle East as electricity demand soars – IEA

Published

10 hours ago

September 18, 2025

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Solar + nuclear to surge in Middle East as electricity demand soars – IEA

Electricity demand is skyrocketing across the Middle East and North Africa, and it’s being driven by two big factors: cooling homes and businesses in extreme heat, and making seawater drinkable through desalination. A new report from the International Energy Agency (IEA) shows just how dramatic the surge is. Electricity use in the region has tripled since 2000, and it’s expected to jump another 50% by 2035. That’s like adding the current combined electricity demand of Germany and Spain.

Cooling and desalination alone are expected to account for about 40% of that growth over the next decade. Urbanization, industrialization, the electrification of transport, and the boom in data centers are also adding to the load, according to the IEA’s report, “The Future of Electricity in the Middle East and North Africa.”

Right now, natural gas and oil overwhelmingly dominate power generation in the region, making up more than 90% of electricity supply. But that mix is changing. Many countries, including Saudi Arabia and Iraq, are trying to reduce oil-fired power to free it up for export. The IEA says natural gas will likely cover half the demand growth through 2035, with oil’s share falling from 20% today to just 5%.

Renewables are on the rise, too. Solar capacity is set to increase tenfold by 2035, growing by 200 gigawatts (GW), which would boost renewables’ share of the electricity mix to around 25%, up from 6% in 2024. Nuclear power is also expected to triple over the same period.

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“Demand for electricity is surging across the Middle East and North Africa, driven by the rapidly rising need for air conditioning and water desalination in a heat- and water-stressed region with growing populations and economies,” said IEA executive director Fatih Birol. “To meet this demand, power capacity over the next 10 years is set to expand by over 300 GW, the equivalent of three times Saudi Arabia’s current total generation capacity.”

Meeting that demand won’t come cheap. Investment in the power sector hit $44 billion in 2024, and it’s projected to grow another 50% by 2035. Nearly 40% of that spending is expected to go toward upgrading grids, which currently suffer losses that are double the global average.

The IEA says grid upgrades and stronger regional interconnections will be critical for electricity security. Balancing renewables will also require more energy storage, demand-side flexibility, and enough gas-fired plants to cover when solar and wind aren’t available.

Energy efficiency improvements could ease some of the strain. For example, air conditioners in the region are less than half as efficient as those in Japan. Upgrading the ACs alone could cut peak demand growth by an amount equal to Iraq’s entire current power capacity.

If countries move more slowly on diversifying their power mix, according to the report, the stakes are high. Carbon dioxide emissions would continue to rise, and oil and gas demand for electricity could increase by more than a quarter by 2035, cutting export revenues by $80 billion and raising import bills by $20 billion.

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Environment

Hyundai wants to kill off this popular EV design trend, and I have to agree

Published

17 hours ago

September 17, 2025

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Hyundai wants to kill off this popular EV design trend, and I have to agree

Is it just me, or do too many new vehicles look about the same? Hyundai believes it’s time to end a popular trend that nearly every EV has nowadays.

Hyundai looks past the LED lightbar for new EV design

The LED light bar has been around for a while. In the early 2000’s Xenon headlights were the hit trend, offering much brighter light while consuming less energy.

Although it was initially mainly found on luxury vehicles, Hyundai was one of the first to jump on the trend, working to make it more widely available at a lower cost.

Over the past few years, the trend has evolved into a thin LED light strip stretched across the front and sometimes the rear of the vehicle.

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Since most brands are slapping it on electric vehicles, it’s become almost a status symbol of the EV movement. In early 2023, Hyundai revealed the new “EV-derived, futuristic” design for the Kona Electric, placing a heavy emphasis on the front LED lightbar.

Nowadays, nearly every vehicle, EV or gas-powered, has the popular design feature. Even Tesla hopped on the trend with the new Model Y, Model 3, and Cybertruck.

According to Hyundai’s design boss, Simon Loasby, LED lightbars are “almost at the end of their journey.” After unveiling the new Concept Three at the Munich Motor Show last week, Loasby explained to Car Magazine on the sidelines, “When is the time you need to let go [of light bars], it’s almost like the end of that.”

Although Hyundai recently added the lightbar to the Grandeur, Kona, and Sonata, Loasby said he’s “seen enough.”

“It worked at the time, and it was absolutely right, the Grandeur was the first car with a one-piece structure. The biggest thing is the cost level, you just can’t afford to do it and some customers don’t need it,” Hyundai’s design chief explained.

Hyundai IONIQ 9 (Source: Hyundai)

In China, “you must have it,” Loasby said, but in other markets, like Europe and the US, it’s not needed. Hyundai is instead focusing on differentiating itself with its unique pixel lightning, found on the IONIQ EV models.

Hyundai has already had a few copy its design, notably the Fiat Grande Panda, which Loasby joked, “thanks for copying, thanks for being inspired by us.”

It may be time for a shake-up. Loasby said, “I think we are almost at the end of journey in terms of lighting. It’s almost like chrome.”

Hyundai’s new Concept Three, which is expected to launch as the IONIQ 3 in production form, did not feature a full LED lightbar. Instead, it had an updated pixel lightning design.

Electrek’s Take

I have to agree with Loasby on this one. I must admit that at first, I was a fan of the sleek look of a nice, slim lightbar, especially at night.

The more I see it, the more it reminds me of a Toyota now. And that’s nothing against them (It is the world’s largest automaker), but should a Tesla Model Y, or even a Porsche 911, look the same as a Toyota from the front? I’ll let you determine that one.

I drive a 2023 Tesla Model 3, the last of the pre-facelift version, and was pretty bummed to see how cool the updated Model 3 looked at first. The more I see them, though, the more I like the design of the first-gen Model 3 and its wide eyes. It’s unique. Now, the Model 3 looks like any other vehicle, at least, in my opinion.

Is it time to put an end to the LED lightbar? Let us know how you feel about it below.

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Environment

Eat Culver’s frozen custard + fast charge your EV in Wisconsin

Published

18 hours ago

September 17, 2025

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Eat Culver's frozen custard + fast charge your EV in Wisconsin

Zero 60, an EV charge point operator on the ChargePoint network, is bringing fast charging to a Culver’s in the Northwoods of Wisconsin. The company, founded by Faith Technologies Incorporated (FTI), will install a renewable-powered charging station in Rhinelander.

The new site sits along a state-designated Alternative Fuel Corridor at Culver’s on 620 W. Kemp St. It will feature four 160-kilowatt charging ports, giving EV drivers in northern Wisconsin reliable fast charging well beyond the state’s urban hubs.

The project is backed by the Wisconsin Department of Transportation’s first round of funding from the Wisconsin Electric Vehicle Infrastructure (WEVI) program. Wisconsin wants to ensure EV drivers can confidently travel north, knowing they won’t be stranded without chargers.

“Partnering with a well-known brand like Culver’s gives us a unique opportunity to combine Midwest hospitality with clean, convenient charging,” said Wade Leipold, executive vice president of FTI. “We’re proud to support Wisconsin’s efforts to build a robust, future-ready charging network that serves communities and travelers alike.”

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Zero6 Energy is financing, owning, and operating the station, while FTI is handling the engineering, design, installation, and ongoing maintenance. Zero 60 already operates nine charging sites and has plans for many more across the US, with the first wave of stations installed in New York, California, Colorado, and Wisconsin, and more currently being developed in other states.

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