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Oil companies sue governments $18 billion as climate change action threatens profits

Fossil fuel companies are suing governments across the world for more than $18 billion after action against climate change has threatened their profits, according to research conducted by campaign group Global Justice Now.

Five energy companies are using a legal process that allows commercial entities to sue governments under international laws governing trade agreements and treaties.

These corporate arbitration courts operate outside of a country’s domestic legal system.




According to Global Justice Now, which has collated publicly available information, five of the largest lawsuits under way are being brought by TC Energy, RWE, Uniper, Rockhopper and Ascent Resources.

The $18 billion they are collectively suing for is almost a quarter of the entire climate funding provided by developed nations for developing ones, according to the Organisation for Economic Co-operation & Development’s (OECD) most recent assessment.

Rockhopper is currently suing the Italian government for $325 million in a dispute related to a ban on offshore oil drilling close to the coastline.



Ascent is asking for $118 millio from Slovenia after it passed legislation requiring environmental assessments for fracking.

Canada based TC Energy, the company behind the controversial Keystone XL pipeline, is suing the US government for $15 billion after the Biden administration cancelled the project, citing the fight against climate change.

Meanwhile German companies RWE and Uniper are suing the Dutch government for $1.6 billiin and $1.06 billion each following the Dutch government’s move to phase out coal and shut down coal-fired power plants by 2030.

The majority of the cases are being brought under the Energy Charter Treaty, and are being hosted within the International Centre for The Settlement of Investment Disputes, a branch of the World Bank.

The Energy Charter Treaty was created after the end of the Cold War and was designed to provide a stable, transparent legal framework that protected foreign investors as energy markets opened up.

Global Justice Now trade campaigner Jean Blaylock told Sky News: “Fossil fuel companies should be paying to fix the climate crisis they caused, but instead they want a payout.

“They’re suing governments who take climate action through secretive corporate courts, massively increasing the cost of climate action”.

She added: “These courts are built into trade deals and operate outside of and supersede domestic courts and legal systems. That means a country that passes meaningful legislation to phase out fossil fuels could face a multi-billion dollar fine, despite acting entirely legally. It’s utterly undemocratic”




“These cases are only becoming more common as governments commit to climate action. World leaders may finally be waking up to the threat of the climate and ecological crisis, but fossil fuel companies are holding them to ransom, demanding ever-greater pay-outs through corporate courts.

“When world leaders gather in Glasgow, they’ll make lofty promises on climate action, but it will all be for nought if fossil fuel companies can sue governments into a state of climate paralysis. It could make a mockery of pledges at COP26.”