On April 16th, the German utility Uniper announced it was filing a compensation claim against the Dutch state under the Energy Charter Treaty framework (ECT). After RWE had filed a similar claim in February, Uniper is now the second company to use the ECT to sue the Netherlands over its Paris-aligned coal exit. Both RWE as well as Uniper’s majority owner, the Finnish state utility Fortum, will hold their annual general meetings tomorrow. The companies are expected to face critical questions about their use of the paralegal arbitration framework in order to obtain exaggerated compensation for fossil assets.
In December 2019, the Netherlands had introduced regulation to phase out coal by 2030, prohibiting the use of coal for electricity production. Uniper’s coal-fired power plant in question, Maasvlakte 3 in Rotterdam, was commissioned in 2016. It came online five months after the Dutch parliament had first called for a nationwide phase-out of coal-fired power plants [1] and four months after the Paris Agreement was adopted in December 2015. RWE’s Eemshaven coal plant was commissioned in 2015.
A timeline that shows the history of RWE’s and Uniper’s ECT claims has been attached to this briefing.
Sara Murawski, Coordinator for the Handel Anders! coalition, said:
“In the midst of the pandemic, RWE and Uniper are demanding billions from the Dutch state as compensation for the coal phase-out law. These polluting companies knew that governments would take climate action to comply with international climate goals. Now, they want to pass the bill for their bad investments to us all. This is outrageous. Both RWE and Uniper should immediately withdraw their claims, and the EU should exit the ECT as soon as possible.”
Sebastian Rötters, Energy Campaigner at Urgewald, said:
“Fortum and RWE are showing us their true faces. They bypass the EU legal framework with these ECT claims to increase pressure while they are negotiating with the Dutch Government. They have greenwashed their advertising, but maintain their dirty fossil business at taxpayers’ expense. This should not go unnoticed. Investors must take a stand against RWE’s and Fortum’s irresponsible anti-climate action lobbying efforts.”
Pia Eberhardt, Campaigner with the Corporate Europe Observatory, said:
“The ECT grants extreme legal privileges to companies, which are not available under national or EU law. As a result, companies like RWE and Uniper can claim astronomical amounts in compensation when states phase out coal, oil and gas. While it is governments’ responsibility to end this madness by withdrawing from the ECT, any company claiming to green its business should abstain from attacking the energy transition under the treaty, which is nothing but anti-climate lobbying.”
About the Energy Charter Treaty:
The ECT is an unobtrusive investment treaty from the 1990s, which enables foreign energy companies to delay and hamper efforts for more ambitious climate legislation. If a government decides to phase out coal or, for example stop an energy infrastructure project, it can be sued by international corporations under the ECT. Thus, the ECT paves the way for expensive investor-state dispute settlement (ISDS) claims against governments that are seeking to increase their efforts to fight climate change. Responsible shareholders should be clear on the fact that Paris-compliant transition plans must include a pledge that the ECT will not be used to prolong the life of fossil assets.
Background briefing about the ECT: https://urgewald.org/shop/meet-energy-charter-treaty
ECT’s Dirty Secrets: https://energy-charter-dirty-secrets.org/