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“Energy Transition – Not so fast!”

Author: Mark Kissack, Business Transformation Consultant, AGILITY3

Published: 13 Jul 2022

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Time is running out to make a difference.

There is no denying that we are in a Climate Emergency. To maintain global temperatures at 1.5 degrees above pre-industrial levels, we need to reduce our carbon footprint by 45% by 2030. However, we are currently on track for a 14% increase. [1]

To close this gap, there needs to be fundamental changes in the way that governments, businesses, and consumers operate. To assist the energy transition from fossil fuels to renewable energies, laws will need to be adapted. This aspect of the Energy Transition has until now been largely overlooked. We now look at some of these in more detail:

United States

The legal aspect of the Energy Transition was made clear by the US Supreme Court’s decision to limit the powers of the Environmental Protection Agency (EPA) on 30 June 2022. Fossil fuel companies and conservative business groups hailed the EPA decision as a victory. Those concerned about climate change have seen the decision as delaying the implementation of the Energy Transition in the US.


Around the same time The Solar Impulse Foundation [2], a leading advocate of Sustainable Solutions, launched a campaign to make the laws in France more conducive to the Energy Transition. The slogan of this campaign was “the climate is changing, so must the laws”.


Fossil fuel investors have a little-known piece of legislation that could be used to delay the Energy Transition. The Energy Charter Treaty (ECT) is an international agreement that establishes a multilateral framework for cross-border cooperation in the energy industry. It was originally set up as a means of protecting the investments of fossil fuel producers in infrastructure such as pipelines.

Today, there are concerns that it will be an obstacle to the Energy Transition. The record claim under the Treaty is $50 billion awarded in 2014 to Yukos against the Dutch government. This claim is currently under appeal in the Dutch courts. More recently, the German energy company RWE sued the Dutch government for €1.4 billion in compensation for the phasing out of coal power plants. In October 2020, the European Parliament voted to end fossil fuel protection under the ECT. The Act can still be used in other jurisdictions.

United Kingdom

On July 6, the UK Government presented the Energy Securities Bill to Parliament. A good summary is available:


To maintain 1.5 degrees above pre-industrial levels, the Energy Transition needs to be accelerated. The current war in Ukraine should serve as a catalyst for this Transition and not as a reason to return to local fossil fuel alternatives. Legislation needs to be adapted to accelerate the transition to renewable energies.

*The views expressed are the author’s and not ICAEW’s.

[1] Tatiana Valovaya, Director General of the United Nations Office in Geneva at the “Assises Européenes de la Transition Energétique” on 31 May 2022.

[2] The Solar Impulse plane successfully circled the globe in 2015/2016 showing the effectiveness of existing renewable technologies. Bertrand Piccard set up The Solar Impulse Foundation to promote Sustainable Solutions.

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