English translation of the essay originally published on 1 May 2025. References to recent events reflect the time of writing.
Changing investment in oil and gas
A few days ago, an event entitled “Transforming Investment in the Oil and Gas Industry” presented projects worth tens of billions of dollars to develop Iran’s oilfields. It coincided with announcements concerning the European Union’s and the United Kingdom’s withdrawal from the Energy Charter Treaty (ECT), a development with potentially significant consequences for the future of energy investment.
The Energy Charter Treaty: origins and change
The Energy Charter Treaty was developed in the 1990s, after the Cold War, to provide protection for international investment in the energy sector. Its original aim was to strengthen economic cooperation and build trust between investors and governments. Over time, however, investor–state dispute settlement (ISDS) became a means of challenging environmental regulation and climate policies, creating obstacles for countries moving towards renewable energy.
Why withdraw from the ECT?
Growing concern about climate change and the need to support clean energy made withdrawal a serious option. The principal considerations included:
- Legal constraints on policies to reduce greenhouse gas emissions.
- Claims brought by investors against environmental measures.
- The desire to expand investment in renewable technologies.
What could withdrawal mean for renewables?
Redirecting investment
Governments can direct financial resources towards new technologies, including solar power, wind power and green hydrogen.
Stronger environmental regulation
With fewer concerns about investment claims, countries can pursue stronger rules to reduce greenhouse gas emissions.
A shift in international energy policy
Withdrawal reflects a changing global attitude towards energy investment rules and the need to bring them into line with sustainable development.
Conclusion
The European Union’s and the United Kingdom’s withdrawal from the ECT marks an important turning point in the energy transition. It suggests a move towards reducing dependence on fossil fuels and increasing investment in clean energy. Against this background, the oil and gas industry appears unlikely to retain its former appeal.