Friends of the Earth Europe | 1 March 2024

EU breaks deadlock on the ECT, announces exit

Today marks a significant turning point as the Belgian EU Presidency brokered a deal with the European Commission and member states on the withdrawal from the Energy Charter Treaty (ECT), an international trade agreement protecting fossil fuel investments. The Commission’s new proposal for the EU Council offers member states the option to approve the modernisation of the treaty at the upcoming ECT Conference while allowing the EU itself and Euratom to leave the treaty (the proposal for a position on behalf of Euratom available here).

Since the summer of 2023, EU talks around the Energy Charter Treaty had reached a deadlock. The Commission initially proposed a coordinated withdrawal of the EU and all member states, while a number of them advocated for modernisation and continued participation in the treaty. With neither proposal garnering a qualified majority, progress had been stagnant for several months.

Paul de Clerck, trade expert at Friends of the Earth Europe commented:

“We applaud the Belgian Presidency for brokering this deal.The decision of the EU to leave the treaty is historic. It is the first time that climate concerns prevail over trade interests. The Energy Charter Treaty is a wreck and we are convinced that other member states will follow the examples of Spain, France, Germany, the UK and many others, and also jump ship.”

Under the current compromise proposal, the European Union will exit the Energy Charter Treaty while also agreeing to its modernisation, provided other non-EU treaty members support modernisation as well. However, the compromise does not imply that EU member states can automatically remain part of the ECT. They would still require an authorisation from the EU to do so. Failure to obtain this authorisation would necessitate their withdrawal from the treaty.

Next steps

The time-line for the approval of this proposal is sensitive, as the decision for the EU to leave the ECT must be approved by the European Parliament. The EU Council is set to vote on the proposal on Thursday, March 7, with the Parliament’s vote planned for the week of March 11.
A short note on the ECT

The Energy Charter Treaty dates back from the 1990s and grants sweeping rights and protections to big energy investors – mainly fossil fuel companies. The fossil fuel industry is using it to sue governments over their climate policies, through secret tribunals and settlements by commercial arbiters who have an incentive to favour corporations. In Europe alone €350 billion euros worth of oil, gas and coal projects are protected under this treaty.