The Energy Charter Treaty was designed to promote energy security through the operation of more open and competitive international energy markets, while respecting the principles of sustainable development and sovereignty over energy resources. It also established the Energy Charter Conference, an inter-governmental organisation which meets on a regular basis to discuss issues affecting energy cooperation.
EU withdrawal
In the absence of any substantial update of the Energy Charter Treaty since the 1990s, it became outdated compared to the climate ambition at EU and international level. The EU therefore decided to withdraw from the treaty. On 30 May 2024, having obtained the European Parliament’s consent, the Council agreed on the EU and Euratom’s withdrawal from the Energy Charter Treaty.
The withdrawal of the EU and Euratom from the Energy Charter Treaty was notified to the depositary of the treaty on 27 June 2024. At the same time, and in line with the political compromise reached by EU countries, those who remain contracting parties to the treaty were able to exercise their vote at the Energy Charter Conference on 3 December 2024, so as not to prevent the adoption of the amendments to the treaty.
The withdrawal has been a carefully crafted process including several legal and political steps. Almost a year prior, on 7 July 2023, the Commission put forward a proposal for a Council decision on the withdrawal of the EU from the Energy Charter Treaty, together with a parallel proposal for Euratom. In parallel, for the sake of coherence, the Commission withdrew its previous proposals on the modernisation of the treaty. Later on, on 1 March 2024, the Commission proposed 2 draft Council decisions on the position to be taken on behalf of the EU and Euratom respectively in the relevant meeting of the Energy Charter Conference, and for the remaining EU countries to approve or not to oppose the modernised Energy Charter Treaty.
Efforts to modernise the treaty
Prior to withdrawal, the Commission engaged in a process aimed at modernising the Energy Charter Treaty to align it with the principles of the Paris Agreement, the requirements of sustainable development and modern standards of investment protection.
In 2019, the treaty’s contracting parties started negotiations, which concluded with an ‘agreement in principle’ at the extraordinary Energy Charter Conference of 24 June 2022. The Commission considered the negotiated outcome to be in line with the mandate received from the Council in July 2019 and consequently put the necessary proposals before the Council suggesting that the EU and Euratom supported the adoption of the ‘modernisation package’. However, these proposals were not backed by the Council, due to a blocking minority of 4 EU countries.
In the absence of a common position in the Council, the EU and Euratom could not take part in a vote on the adoption of the modernisation package at the Energy Charter Conference on 22 November 2022.
Related links
- EU notifies exit from Energy Charter Treaty and puts an end to intra-EU arbitration proceedings (28 June 2024)
- Energy Charter Treaty: Council gives final green light to EU’s withdrawal (30 May 2024)
- The European Parliament gives its consent to the EU withdrawing from the Energy Charter Treaty (24 April 2024)
- European Commission proposes a coordinated EU withdrawal from the Energy Charter Treaty (7 July 2023)
- Agreement in principle reached on Modernised Energy Charter Treaty (24 June 2022)