Decision on the interpretation and application of the Energy Charter Treaty

Key Points

The EESC:

• endorses the adoption of the Agreement on the interpretation and application of the Energy Charter Treaty (ECT) between the EU, Euratom, and their Member States and notes the EU's formal withdrawal from the ECT on 27 June 2024;
• agrees with the Court of Justice of the European Union (CJEU) that Article 26(2) of the ECT is incompatible with EU law, and emphasizes that the ECT was never meant to apply to intra-EU relations;
• stresses that the ECT's investor-state dispute settlement (ISDS) mechanism can undermine rule of law, democracy, transparency, and coherence by allowing investors to bypass domestic courts and challenge national laws affecting profit expectations;
• highlights that the ECT's protection of fossil fuel investments conflicts with climate objectives like the European Green Deal and the Paris Agreement;
• encourages agreements with third countries like the United Kingdom to eliminate arbitration risks due to the ECT's 20-year survival clause;
• calls to explore legal mechanisms to neutralize the survival clause's effects, preventing prolonged arbitration risks that could hinder the EU's climate and energy transition objectives;

• urges remaining Member States to consider withdrawing from the ECT due to its persistent issues and advocates for developing a new multilateral energy cooperation framework that:

  - prioritizes sustainable and renewable energy sources;
  - fully aligns with the European Green Deal;
  - considers a just transition;
  - respects transparency, democracy, and the rule of law.