On 30 May 2024, the Council adopted Decision (EU) 2024/1638 on the withdrawal of the Union from the Energy Charter Treaty (ECT).
The ECT, a multilateral agreement that came into force in 1998, contains provisions on investment protection and trade in the energy sector. The arbitration provisions of the ECT have allowed international investors to obtain compensation in the context of the state aid for renewables in Spain. In the Achmea case, the CJEU considered that investor-state arbitration provisions in intra-EU bilateral investment treaties were inconsistent with EU law and infringed upon the EU’s autonomy to determine matters of EU law.
The ECT had not only become obsolete but also incompatible with the climate objectives of the European Union, due in particular to concerns about investment in fossil fuels. The European Union and the European Atomic Energy Community (Euratom) will both officially leave the treaty.