February 21, 2026, 10:35February 21, 2026, 10:35
The modernization of the international Energy Charter Treaty proposed by the Federal Council is having a difficult time, especially with the Swiss political parties, albeit for different reasons. The withdrawal of the EU and key states from the agreement is also increasing the centrifugal forces in this country.
In November 2024, the Federal Council announced that it wanted to modernize the international Energy Charter Treaty, which came into force in 1998. The Energy Charter Treaty (ECT), which is binding under international law, was created to protect investments in gas, oil and coal projects.
The agreement is controversial: the EU had already decided to leave in the summer of 2024.Image: keystone
Now it should be adapted to changing challenges regarding the environment and sustainability, the current practice of investment protection agreements and the changed geopolitical environment.
The agreement is controversial: the EU had already decided to leave in the summer of 2024. Numerous states such as Germany, France, Italy and Poland followed suit. A few other, mostly smaller EU member states, planned to remain in the agreement.
The agreement has long been criticized by environmental organizations. It allows investors, for example, to bring lawsuits against states in arbitration courts. The intention behind this is to guarantee companies security when investing.
SVP does not want any further obligations
The Swiss pole parties are opposed to the modernization of the ECT – but for different reasons.
The SVP demands a waiver of ratification of the treaty change. The existing contract already offers a stable framework for protecting investments in the energy sector, the party writes in its response to the consultation. The risks of the revision to sovereignty, legal certainty and costs would outweigh the benefits.
A central problem remains unsolved even with a treaty change: investors can continue to sue states outside of the regular courts. This poses the risk of expensive procedures. At the same time, new, openly formulated references to climate and sustainability could lead to more legal uncertainty.
The party also points to international developments, according to which several central states have declared or have already withdrawn from the treaty. This makes it unclear in which markets the modernized contract can still have an effect.
Should the Federal Council nevertheless stick to ratification, the SVP will demand a restrictive interpretation in favor of Swiss regulatory sovereignty. No additional obligations should be derived from climate and sustainability references. Effective hurdles should also be provided against abusive lawsuits.
SP and Greens demand exit
The SP and the Greens also reject the modernization of the ECT, but go even further: both parties are calling for Switzerland to withdraw from the agreement. The contract is incompatible with the climate goals. It endangers effective climate policy because it allows companies to sue states for billions of dollars in damages because of the phase-out of fossil fuels.
This contradicts the Paris Climate Agreement and the Swiss Climate and Innovation Act. Such a “regulatory brake” would counteract all efforts for a socially just energy transition, according to the SP’s statement.
Like the SVP, the SP also refers to those states that have already left or are considering doing so. Remaining in the ECT would isolate Switzerland from its closest foreign and energy policy partners.
The Greens also write that the ECT is a threat to sovereign climate policy and Switzerland’s reputation. The planned modernizations of the contract are “purely cosmetic” and do not change anything about its structural problems. They lagged behind modern international investment standards and would not provide sufficient protection against arbitrary arbitral tribunal rulings.
According to the Greens, a central problem remains the so-called sunset clause, which protects investments for a further 20 years even after a withdrawal.
VSE: Benefit has “decreased significantly”
The FDP is not commenting on the modernization of the ECT for the time being, it was said on Friday at the request of Keystone-SDA. At most, the party wants to take a position as part of the parliamentary debate.
The umbrella association of Swiss electricity companies (VSE) fundamentally supports the measures planned by the Federal Council. Local companies in the electricity industry also operate abroad and invest in generation systems. The adjustments proposed by the Federal Council strengthened investment security.
But the VSE also mentions in its statement the withdrawal of numerous European states from the Energy Charter: As a result of the withdrawals, the benefits of the ECT for the electricity industry have “significantly decreased”.
Cantons are divided
The Swiss Energy Foundation (SES), in turn, is calling for a rapid exit from the ECT, as are numerous environmental associations and cantons, including Basel-Stadt, Bern, Geneva and Solothurn.
On the other hand, the canton of Zug spoke out in favor of changing the contract in a statement. The St. Gallen and Schaffhausen governments are also in favor.
Either way, in the end Parliament will have to decide whether Switzerland wants to remain in the agreement or follow the neighboring countries, which would ultimately sink the agreement in Switzerland too. (cst/sda)