The Energy Charter Treaty

An obstacle to the energy transition

Long read

12 May 2022

In 2019, the Netherlands passed the Coal Act, intended to put an end to energy generation from coal from 2030 onwards. It is one of the most important measures the Netherlands is taking to meet the Paris climate goals. Immediately after the Coal Act passed however, the German energy companies RWE and Uniper filed a claim for damages against the Dutch government. If they are forced to close their coal plants (prematurely), the companies argue, they would lose 2.4 billion euros in expected future profits. And they want compensation for that loss.

The companies can make this claim based on the Energy Charter Treaty, an international treaty that protects investments in the energy sector. The Netherlands is one of more than 50 parties to this treaty. The decision on the claim will be taken outside the national legal system, in a special tribunal consisting of three lawyers. They will ultimately determine who gets the bill for the Dutch Coal Act: the energy companies or Dutch citizens.

Read the full article on our Dutch website. You can also find an introduction to the Energy Charter Treaty there.