Energy Charter Treaty seen as incompatible with climate commitments
(Source: Energy Charter)

Energy Charter Treaty seen as incompatible with climate commitments

Reducing Oil and Gas usage could have some unintended consequences.

Summary: France becomes the latest European nation to withdraw from the Energy Charter Treaty (ECT). A collapse of, or a restructuring of, the ECT could accelerate the stranding of fossil fuel assets. Investors need to understand the associated risks and transition plans that Oil and Gas (O&G) companies have in place.

Why this is important: The Investor-State Dispute Settlement could result in legal claims of billions of dollars from fossil fuel producers.

The big theme: If we are to reduce O&G usage, there will be a whole series of costs we as a society may need to face. Some are to do with compensation for stranded assets (an unpopular topic) and some are to do with cleaning up the existing infrastructure. This is a theme that could get material and run for many decades.



The details


Summary of a story from Euractiv:

President Macro announced that France will withdraw from the Energy Charter Treaty as it is “incompatible with the country’s climate commitments” - in particular the 2030 decarbonisation timetable. France joins the Netherlands, Spain and Poland in announcing their withdrawal.

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