{"id":1143229,"date":"2026-08-11T17:53:19","date_gmt":"2026-08-11T17:53:19","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/1143229\/"},"modified":"2026-08-11T17:53:19","modified_gmt":"2026-08-11T17:53:19","slug":"brexit-gives-exxon-loophole-to-attack-eu-carbon-capture","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/1143229\/","title":{"rendered":"Brexit gives Exxon loophole to attack EU carbon capture"},"content":{"rendered":"

The oil and gas producer has launched an international dispute, known as an ISDS, despite lobbying in favour of the technology<\/p>\n

ExxonMobil has sent an investor-state dispute settlement notice to the European Commission, challenging its obligations to develop carbon storage sites under the EU\u2019s Net Zero Industry Act<\/a> as too onerous, despite its lobbying for carbon capture schemes.<\/p>\n

A group of companies incorporated in Belgium, Luxembourg and the UK \u2014 which Sustainable Views understands to be Exxon affiliates \u2014 filed the dispute, a spokesperson for the Commission confirms.<\/p>\n

\u201cWe are confident that the measures adopted by the EU comply with the Energy Charter Treaty<\/a> and any other applicable rules of international law,\u201d says the spokesperson.<\/p>\n

The ECT is an international agreement to govern co-operation, dispute resolution and investment in the energy sector. Disputes can be brought in the form of an ISDS, which allows private companies to sue foreign governments through international arbitration when they believe governmental policy has harmed their investments or treaty rights.<\/p>\n

The EU left the ECT a year ago, suggesting that the agreement affected the advancement of climate policies, but the \u201csunset clause<\/a>\u201d allows companies that already had investments to continue to bring disputes.<\/p>\n

From reviewing publicly available ISDS<\/a> records, the notice appears to be the first time an Exxon UK affiliate has filed a dispute.<\/p>\n

\u201cThis is an extraordinary case because Exxon lobbies heavily for carbon capture schemes, and yet here they are suing the EU for introducing carbon capture requirements,\u201d says Nick Dearden, director of non-governmental organisation Global Justice Now. \u201cThe bottom line is Exxon doesn\u2019t think they should pay for it, and so they\u2019re using ISDS to shift the cost to the public.\u201d<\/p>\n

The reversal suggests that the fossil fuel industry\u2019s public support for carbon capture was intended to supplant more material policy moves, says Kyla Tienhaara, associate professor of environmental and global development studies at Queen\u2019s University.<\/p>\n

\u201cClearly it has been a tactic to delay real action,\u201d she tells Sustainable Views.<\/p>\n

This is an extraordinary case because Exxon lobbies heavily for carbon capture schemes, and yet here they are suing the EU for introducing carbon capture requirements<\/p>\n

Nick Dearden, Global Justice Now<\/p>\n

In a LinkedIn post from ExxonMobil Europe on July 14, just weeks before the news of the notice broke<\/a>, the oil and gas producer wrote that \u201ccarbon capture and storage is a critical technology in the reduction of greenhouse gas emissions\u201d. The post notes that Exxon has captured 120mn tonnes of carbon dioxide globally, which it says is more than any other company.<\/p>\n

However, it adds that the Net Zero Industry Act\u2019s goal of 50mn tonnes of CO\u2082 storage capacity by 2030 is \u201cnot achievable, given permitting timelines, project maturity and the current market environment\u201d, adding that it takes seven to 10 years to develop CCS sites.<\/p>\n

\u201cWe need policy change now,\u201d wrote Exxon, calling for a \u201crealistic approach\u201d to carbon capture.<\/p>\n

Official records show that in 2023, Exxon attended 24 of 44 external ministerial meetings in the UK on carbon capture, before the government in 2024 deployed nearly \u00a322bn in subsidies for the technology over a 25-year period. And last year, CCS development was officially registered as one of Exxon\u2019s lobbying activities in the EU.<\/p>\n

Brexit loophole<\/p>\n

Arbitration experts say the inclusion of Exxon\u2019s UK entity is likely a move to avoid EU complications that would have otherwise prevented an award or settlement in the case.<\/p>\n

\u201cThe inclusion of UK entities in the group of claimants may genuinely help to navigate the Commission\u2019s aggressive position on intra-EU arbitration in ECT disputes,\u201d says George Burn, arbitration partner at law firm CMS.<\/p>\n

That is because intra-EU disputes have been blocked from dispute resolution or awards, so a post-Brexit UK entity may be able to evade the issue.<\/p>\n

\u201cI imagine Exxon would use a UK subsidiary to avoid having the dispute designated as intra-EU, with the potential of being later invalidated by the courts,\u201d says Tienhaara. Ultimately, the point is to try to dictate climate policy, she adds.<\/p>\n

\u201cIt\u2019s a tactic to bully and scare governments out of doing these types of things,\u201d Tienhaara continues. \u201cNot just Europe \u2014 they want other countries to look at what they\u2019re doing and think twice about taking similar actions.\u201d<\/p>\n

Energy charter limits<\/p>\n

In 2013, a Paris tribunal issued an award to Ukrainian energy company Komstroy in its dispute with Moldova over electricity contracts. The award spurred a nearly 10-year legal saga culminating in the 2021 Court of Justice of the EU decision, which found that ECT-related, intra-EU arbitration disputes are not valid.<\/p>\n

It\u2019s a tactic to bully and scare governments out of doing these types of things. Not just Europe \u2014 they want other countries to look at what they\u2019re doing and think twice about taking similar actions<\/p>\n

Kyla Tienhaara, Queen\u2019s University<\/p>\n

Then last year, the issue was reconsidered by the Swedish Supreme Court in a case brought by a natural gas joint venture against Poland. In that dispute, four out of the five investors were within the EU, while one was in Switzerland.<\/p>\n

A tribunal rejected the investors\u2019 claims. Eventually, the Supreme Court\u2009ordered that the award in that case remained partially valid, due to the Swiss investor.<\/p>\n

Strategy complications<\/p>\n

\u201cIncluding an ExxonMobil entity from the UK could help to avoid some of the jurisdictional hurdles and complications created by the EU\u2019s approach,\u201d but the strategy carries \u201ccomplications\u201d, Burn tells Sustainable Views.<\/p>\n

\u201cThe UK company would still have to be a genuine claimant, with a real right of claim,\u201d he says, noting that he has heard examples of companies looking to use UK entities \u201cas much as possible\u201d in ECT cases and beyond.<\/p>\n

How the EU will handle the award issue remains to be seen, Burn adds.<\/p>\n

Tienhaara suggests the EU could work with the UK to revoke the sunset clause so as to avoid the arbitration disputes from energy producers.<\/p>\n

\u201cIf governments continue to allow themselves to be hamstrung by ISDS, then the climate transition will fail,\u201d says Dearden.<\/p>\n

Exxon did not reply to multiple requests for comment.<\/p>\n","protected":false},"excerpt":{"rendered":"The oil and gas producer has launched an international dispute, known as an ISDS, despite lobbying in favour…\n","protected":false},"author":2,"featured_media":1143230,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[5226],"tags":[802,748,35,2000,299,5187,1699,4884,28460,16,15],"class_list":["post-1143229","post","type-post","status-publish","format-standard","has-post-thumbnail","category-brexit","tag-brexit","tag-britain","tag-energy","tag-eu","tag-europe","tag-european","tag-european-union","tag-great-britain","tag-litigation","tag-uk","tag-united-kingdom"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/117078157170032527","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/1143229","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=1143229"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/1143229\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/1143230"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=1143229"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=1143229"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=1143229"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}