Netherlands - RWE - Coal phase-out

Against progress: RWE sues the Netherlands

Netherlands - RWE - Coal phase-out

Against progress: RWE sues the Netherlands

In December 2019, the Dutch parliament passed a law to phase out coal. With this legislation, the country adjacent to the North Sea plans to ban the burning of coal for power generation by 2030, which would also serve to help the government comply with its obligations under the Paris Climate Agreement. Among other stipulations, the law requires the energy company RWE to stop burning coal at its Eemshaven power plant by the end of the decade. In response, RWE sued the Dutch government for 1.4 billion euros in damages. 

It is undeniable that climate change cannot be tackled without an energy transition, and the interests of the fossil fuel industry should not be allowed to undermine efforts to protect the climate, especially when such efforts are the result of parliamentary and democratic decisions. Therefore, in July 2021, ECCHR and its Dutch partners submitted a brief in the RWE case that signaled our intention to intervene. Our intervention works to bring an environmental and human rights perspective to the proceedings.

Case

Coal – especially within coal-fired power plants – accounts for a significant share of greenhouse gas emissions, which is why phasing out coal in the energy sector is one of the most effective ways to combat climate change.  

Yet, some companies continue to refuse to accept this – and then even sue countries that try to pass laws that protect the climate. RWE AG is Europe’s largest carbon emitter and expects to lose billions as a result of legal coal phaseouts if they fail to adapt their business model in time. This is the reason why the corporate group initiated the damages claim against the Netherlands before the International Centre for Settlement of Investment Disputes (ICSID). The case, which the company is basing on the Energy Charter Treaty (ECT), is the first of its kind. 

Context

Climate protection is not only an international obligation under the Paris Agreement that looks toward the future; it is also an obligation to the world of today that derives from the human rights to life, health, a healthy environment, adequate living conditions, human dignity, and freedom. 

A few months after the Netherlands decided to phase out coal, the Dutch Supreme Court came to a verdict in the Urgenda case. The court’s decision requires the Netherlands to reduce its emissions in a manner that aligns with human rights. In addition, in May 2021, the District Court in The Hague ruled that Shell, one of the world’s largest oil and gas companies, must reduce its CO2 emissions by 45 percent by 2030. These and similar decisions set important European precedents for advancing climate protection that also respects and protects human rights. They follow in the footsteps of pioneering decisions in the Global South, such as by the Philippine National Human Rights Commission in 2019 or by the Supreme Court of Nepal in 2018