MEPs back EU withdrawal from Energy Charter Treaty

If Parliament consents, Council will be able to adopt the decision by qualified majority.The Energy Charter Treaty (ECT), established in 1994 to govern trade and investment in the energy sector, has become a focal point for controversy. The European Parliament has also voiced the need for an exit in a resolution adopted in 2022.

Rapporteur for the Trade committee Anna Cavanzzini (Greens/EFA, DE) said: “Today’s vote is a major step in the right direction. The EU is finally withdrawing from the climate-hostile Energy Charter Treaty. In view of the climate crisis, the EU must become a climate-neutral continent as quickly as possible. Now the fossil dinosaur treaty finally no longer stands in the way of consistent climate protection, as we no longer have to fear of corporate lawsuits for billions of euros in compensation before private arbitration tribunals”.

Rapporteur for the Industry, Research and Energy committee Mar Botenga (The Left, BE), said: “The Energy Charter Treaty allows fossil fuel multinationals to sue states and the European Union if climate policies affect their profits. In the midst of a climate crisis, this is a contradiction, in addition to being very costly for taxpayers. With civil society, a significant movement has been built to exit this treaty. I am happy to see this mobilization bearing fruit today. It is now necessary to accelerate public investments in renewables.”

The Energy Charter Treaty (ECT), a multilateral agreement focused on the energy sector, was established in 1994 to facilitate international cooperation and provide a framework for investment protection, trade, and dispute resolution within the energy field. However, it has remained largely unchanged since the 1990s, becoming outdated and one of the most litigated investment treaties globally.

The Commission now proposes a coordinated withdrawal by the Union and its Member States, as it considers the Treaty to be no longer compatible with the EU’s climate goals under the European Green Deal and the Paris Agreement, predominantly due to concerns over continued fossil fuel investments.