Today, the European Commission has proposed that the EU, its Member States, and Euratom withdraw, in a coordinated manner, from the Energy Charter Treaty. This Treaty is largely unchanged since it was agreed in the 1990s, and is no longer compatible with the EU’s enhanced climate ambition under the European Green Deal and the Paris Agreement.
Therefore, the Commission is proposing that the EU, its Member States and Euratom withdraw from the unmodernised Energy Charter Treaty in a coordinated and orderly manner, to ensure the equal treatment of investors across the EU and beyond. To ensure legal clarity, the Commission is also withdrawing its previous proposal to ratify the modernised Treaty, which did not gather the required majority among Member States.
Executive Vice-President for the European Green Deal Frans Timmermans said:
“With the European Green Deal, we are reshaping our energy and investment policies for a sustainable future. The outdated Energy Charter Treaty is not aligned with our EU Climate Law and our commitments under the Paris Agreement. It’s time for Europe to withdraw from this Treaty, and to put all of our focus on building an efficient and competitive energy system that promotes and protects renewable energy investments.”
Commissioner for Energy, Kadri Simson, said:
“Keeping an unmodernised Energy Charter Treaty is not a viable option for the EU. The Treaty in its current form is not in line with the EU’s investment policy or our energy and climate goals. An unmodernised Treaty is simply not in line with EU’s sustainable vision of the future, and the investments that are needed for a clean energy transition. That is why we have proposed today to withdraw from the Treaty.”
The legal proposals will now be submitted to the Council of the EU, where a qualified majority vote is necessary for their approval. We expect a first informal discussion to take place among Energy Ministers in Valladolid, Spain next week at the Informal Meeting of the Transport, Telecommunications and Energy Council, under the Spanish Presidency.
There are currently 56 signatories and contracting parties to the Energy Charter Treaty (ECT), including both the European Union and Euratom. The treaty was signed in 1994 and entered into force in April 1998.The Treaty was designed to promote energy security through the operation of more open and competitive energy markets. It also established the Energy Charter Conference, an inter-governmental organisation which meets on a regular basis to discuss issues affecting energy cooperation.
The EU and its Member States called for a modernisation of the outdated Energy Charter Treaty in 2018 and successfully carried out negotiations between 2019 and 2022 in order to align the Treaty to European law, notably on investment policy and energy and climate goals. Despite fulfilling all the requirements of the negotiating mandate given by the Council, Member States did not find the necessary majority to ratify the modernised Treaty,as proposed by the European Commission in October 2022. Given this situation, a coordinated withdrawal by the EU, Euratom and all EU Member States is now the most consistent approach from a legal and policy perspective.
- Publication date
- 7 July 2023
- Directorate-General for Energy