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EU Policy. Bloc quits Energy Charter Treaty, leaving member states free to remain

Vuk Valcic / SOPA Images/LightRocket via Getty Images
Vuk Valcic / SOPA Images/LightRocket via Getty Images Copyright Vuk Valcic / SOPA Images/LightRocket via Getty Images
Copyright Vuk Valcic / SOPA Images/LightRocket via Getty Images
By Marta Pacheco
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Decision greeted as a major success for the climate but environmentalists keep urging all EU countries without exception to withdraw the treaty.

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Energy ministers meeting in Brussels voted unanimously today (May 30) for the EU to officially withdraw the Energy Charter Treaty (ECT) while leaving open the possibility for member states to remain in their own capacity.

Deciding on the bloc's future in the ECT was one of the commitments of the EU Belgian Presidency, the country’s energy minister Tinne Van Der Straeten told reporters today shortly before joining her counterparts at the Energy Council.

Today’s decision followed a European Parliament vote last month signalling an overwhelming intention to quit the treaty. The ECT is a post-Cold War international agreement designed to protect investments in unstable formerly communist states, but it has become a source of controversy since the treaty allows energy companies to sue countries taking measures that could harm their expected profits.

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For example, Germany has been sued by Swedish multinational power company Vattenfall under the ECT in relation to its phase-out of nuclear energy, which affected foreign investors in the nuclear sector. Spain, too, has faced numerous cases, primarily due to changes in its renewable energy policies, which investors claimed breached the ECT by undermining their funds.

Trying to find a solution to please EU countries who have notified their intention to leave, have already left, or want to remain part of the ECT, the Belgians proposed first for the EU, alongside the European Atomic Energy Community (Euratom), to officially withdraw from the treaty before the next ECT conference due in November, while simultaneously allowing EU countries who wish to remain within the treaty to do so.

“Today’s adoption represents the final milestone in the Belgian roadmap we crafted for the ECT. Building on the groundwork laid by our Swedish predecessors, the Belgian presidency has worked tirelessly to break this complex deadlock and found a balance acceptable and useful to all,” said Van der Straeten.

 

The EU will express its position during the next ECT conference, where member states wanting to remain are expected to take the floor and express their intentions, a Belgian official told reporters during a press briefing ahead of today’s vote.

Nine member states have announced their intention to withdraw from the ECT since October 2022 — Denmark, France, Germany, Luxembourg, Netherlands, Poland, Portugal, Slovenia and Spain. In the meantime France, Germany, Luxembourg and Poland have officially notified their withdrawal. The UK announced its intention in February while Italy was the first to quit the treaty in 2016.

“The solution brokered by Belgium was the best possible one at the moment. It is crucial that a decision for the EU to leave is taken in the current mandate, otherwise it would risk being delayed for a long time,” Paul de de Clerck, economic justice expert at Friends of the Earth Europe (FoEE) told Euronews.

“We expect that once the EU and all major member states have left the ECT, the rest of member states will also decide to leave. Not only is the ECT losing its relevance but having EU member states with different investment regimes is also difficult to match with EU competition rules as it will create an unequal playing field,” de Clerck added.

Amandine Van Den Berghe, lawyer at the environmental charity ClientEarth said the EU needs to work with other countries, such as the UK, to neutralise the 20-year sunset clause, which requires signatory states who wish to exit the treaty to comply with its provisions for 20 years.

"This is critical to minimise the risk of more costly damages claims being brought against them over the next two decades," Van Den Berghe said.

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