Experts at the inaugural fossil fuel phase-out summit have identified investor protection treaties as a legal obstacle blocking the global energy transition. These bilateral investment treaties, which safeguard foreign investors' assets, have deterred governments from eliminating coal, oil, and gas infrastructure. Companies routinely sue nations that ban fossil fuels, seeking damages for "lost profits" under treaty provisions. The result locks governments into supporting the fuels they commit to retiring.
The Santa Marta process, convened in Colombia in June 2026, brought together academics, policymakers, and climate specialists to discuss strategies for eliminating fossil fuels by mid-century. Participants argued that the process itself offers a platform to address how investment treaties undermine climate action. Several cases demonstrate the pattern. When Germany accelerated coal phase-out, energy companies threatened litigation. Similar threats followed Canada's decisions to restrict oil expansion and France's plan to close nuclear facilities.
The academics urged governments to recognize that investor protection treaties function as de facto subsidies for fossil fuels. They shield energy companies from the legal and financial consequences of operating in an increasingly carbon-constrained world. Renegotiating these treaties or withdrawing from them could accelerate phase-out timelines without triggering costly arbitration.
The Santa Marta process emerged from Colombia's leadership on transitioning away from coal exports. The country recognizes that remaining coal-dependent creates economic risk as global demand declines. The summit created a formal diplomatic venue where nations pursuing phase-outs can coordinate policy and share legal strategies.
Experts acknowledged that dismantling investor protection frameworks requires political will. Withdrawing from bilateral treaties exposes nations to criticism from trading partners. Yet the alternative perpetuates a system where fossil fuel corporations retain effective veto power over climate policy. Some academics proposed creating new investment treaties that exclude fossil fuel assets or that mandate climate risk disclosure, allowing governments to phase out fuels