The EU prepares to exit the Energy Charter Treaty

The EU Commission has announced its proposal, which includes the coordinated withdrawal of member states, the EU and the European Atomic Energy Community (Euratom) from the Energy Charter Treaty.

Recalling that the deal has not changed since the time it was accepted, the statement says that the deal is not currently in line with the EU’s climate target under the European Green Deal and the Paris Agreement.

The statement underlined the importance of exiting in a coordinated and orderly manner to ensure equal treatment of investors across the EU.

THE AGREEMENT WAS SIGNED IN 1994

The Energy Charter Treaty, signed in 1994 to protect cross-border investment in the energy sector, entered into force in 1998.

The agreement provides extensive rights and legal clarity to foreign investors in the energy sector, including fossil fuels.

The agreement, which has already been ratified by 50 countries, the EU and Euratom, has been the subject of intense debate of late.

The agreement, which was originally designed to support investment in the sector, allows countries to sue energy companies for policies that harm their investments.

The use of the agreement, especially by fossil fuel companies to protect their investments, has been criticized in many countries.

Even if EU countries leave, the deal includes a break clause that will protect existing investments in fossil fuels for 20 years.

Countries including Germany, France, Spain, Denmark, Luxembourg, the Netherlands and Poland were planning to withdraw from the agreement, which Italy withdrew from in 2016.

Countries like Hungary and Slovakia are expected to oppose the EU proposal. These countries are of the opinion that it would be sufficient to update some of the terms of the agreement.

For the proposal to enter into force, the approval of the European Parliament (EP) with a qualified majority of the member states is required. (AA)