Photo: Frans Berkelaar (CC)

The Energy Charter Treaty

An obstacle for the energy transition

In 2019, the Netherlands passed the Coal Act, in order to put an end to energy generation with 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, the German energy companies RWE and Uniper filed a claim for damages against the Dutch government. If they had 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.

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 is 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 the Dutch citizens.

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