Santa Marta process can confront trade protection for fossil fuels, experts say

Just as Colombia – a coal-producing country that has halted new exploration licenses for hydrocarbons – was set to host the first fossil fuel phase-out summit in late April, the government received notice from a foreign energy firm operating on its soil. It was being sued for millions of dollars. One day before Colombia hosted representatives from around 60 countries for the first Global Conference on Transitioning Away from Fossil Fuels, Spain-based firm Termocandelaria Power, which operates two of the country’s diesel- and gas-fired power plants, sued the government for $198 million alleging a breach of investor protection rules under a bilateral agreement. Termocandelaria said government measures since 2024 have prevented its Colombian subsidiaries from receiving full payment for the power they supplied to a public utility, while the Colombian government justified its actions as needed to guarantee financial solvency and deliver electricity to rural communities. While Termocandelaria declined to comment for this article, the company said in a press release last month that investment protection treaties “are designed to provide a stable and predictable legal framework for long-term investments in strategic sectors”. The timing shows how trade agreements that offer investors protection when government decisions are seen as causing harm to their business – a system known as investor-state dispute settlement (ISDS) – can hamper the transition away from fossil fuels even when countries are pushing for it. Governments in the Global South are particularly exposed, experts told Climate Home News. May 29, 2026 Comment COP31 must persuade countries to make fossil fuel transition plans As the Iran war disrupts oil and gas supplies, the UN climate summit should tackle fossil fuel dependency, energy affordability and energy access – national roadmaps are a good start Read more May 27, 2026 Clean Energy Frontier Recycling could m