Germany’s investment protection policy is particularly dangerous for partner countries and the energy transition — this is the conclusion of a ranking that examined 30 European countries. Only Great Britain and the Netherlands fare worse. The study was published on Wednesday by seven civil society organizations, including Powershift and CAN Europe.
Investment protection agreements allow investors to sue states through private arbitral tribunals, for example when government measures reduce their profits. It is often used to challenge social or climate policies by governments, for instance when companies sue over the coal phase-out.
“While companies in the renewable energy sector also sue countries, the share of lawsuits in the fossil fuels and mining sectors is increasing, and it reached a record level in 2025,” says Fabian Flues, trade expert at Powershift and author of the study.
For the ranking, the analysts developed 10 indicators, including how many lawsuits companies file against states and how much compensation they receive, but also how many investment protection treaties a country has concluded.
Ireland and Norway Lead the Way
“The analysis shows that there is a small group of countries — particularly the United Kingdom, the Netherlands, Germany and France — whose investment protection treaties and policies cause particularly a lot of damage,” says Flues.
Germany fares so badly because it has as many as 81 different investment treaties, and German companies are very litigation-prone abroad. In addition, investors can sue Germany long after the contract ends: the so-called sunset clause — the period during which the protection of the investment remains in force even after the contract ends — lasts on average 18 years.
Norwegen hat in den letzten Jahren systematisch Abkommen gekündigt
Fabian Flues, Powershift
Supporters of the special rights to sue for corporations argue that these protections should shield them in countries with weak rule of law from government arbitrariness. The ranking, however, shows that there are also countries where foreign investments play an important role and which have largely stayed out of this system. “Norway has systematically terminated agreements in recent years,” says Flues. “Ireland has not yet concluded a single bilateral investment protection agreement.”
On Friday, in Santa Marta, Colombia, the international conference on phasing out fossil fuels begins, which also makes investor-state dispute settlements a topic. In advance, more than 200 civil society organizations are calling on governments in an open letter to withdraw from the private arbitration system together. The letter will be published on Thursday and is available to . The arbitration system “threatens a just transition away from fossil fuels as well as the urgently needed social and ecological transformation,” it states.
At Least Four Lawsuits Against Germany
Besides the billions of dollars that states must pay after losing lawsuits, the signatories fear that countries, out of fear of lawsuits, “will delay or even abandon necessary measures regarding fossil fuels and other extractive industries.”
Four lawsuits against Germany are currently proceeding under the World Bank’s arbitration system. In response to a written request by Jörg Cezanne (Left), the Federal Government stated last week that there are two more lawsuits due to bilateral treaties. This reply is before . Earlier this year, the Russian aluminum company Rusal filed a lawsuit against Germany, apparently concerning sanctions imposed after the invasion of Ukraine.
Amid the current debate on a windfall tax for oil companies, the case of the Klesch Group against Germany is also of interest. The industrial raw materials company is suing over a windfall tax from 2022 that was intended to capture windfall gains from price increases resulting from Russia’s invasion of Ukraine.
