EU Parliament committee votes for co-ordinated EU withdrawal from the Energy Charter Treaty

The Energy Charter Treaty (commonly known as the “ECT”) came into force in April 1998. The signatories intended to provide a multilateral framework for energy cooperation while promoting energy security by supporting competitive energy markets.

In recent years, the European Commission has expressed concern that the ECT is “incompatible with the principle of autonomy of Union law”. Disputes between EU member states and investors (headquartered in Europe) are resolved by arbitration; the CJEU is excluded from its jurisdiction over intra-EU disputes in its areas of competence. Additionally, the EU has described the ECT as “outdated” because?“the protection granted to fossil fuels does not fit with EU objectives as defined in the European Green Deal, the REPowerEU plan or the Climate Law.”

In light of these growing legal and political concerns, the Council gave the EU Commission a mandate to negotiate an agreement in principle to modernise the ECT. Those negotiations commenced in July 2020, but the resulting proposal failed to gather the requisite majority. In 2023, several EU countries, including France, Germany, and Poland, unilaterally withdrew from the ECT. Other member states also announced their intention to withdraw.

On 7 July 2023, the Commission withdrew its proposal for modernisation and published a new proposal for a decision on the co-ordinated withdrawal of the EU from the ECT. This week (9 April 2024), the European Parliament’s Trade and Energy Committee voted in favour of the proposal by a majority vote. For the proposal to be implemented, the EU Parliament (as a whole) must consent to the withdrawal; that vote will take place during the 22-25 April session in Strasbourg.

The information provided in this article is of a general nature and does not constitute, nor should be relied on, as legal or professional advice.