Parliament’s approval is needed for the EU to exit from the Energy Charter Treaty.

The recommendation from the Industry, Research, Energy, and International Trade committees was adopted with 560 votes to 43, with 27 abstentions. Parliament’s consent is required so that the Council can now adopt the decision by qualified majority.

The Energy Charter Treaty (ECT), established in 1994 to govern trade and investment in the energy sector, has become controversial. The European Parliament has also voiced the need for the EU to exit in a resolution adopted in 2022.

Quotes

Rapporteur for the Trade Committee Anna Cavazzini (Greens/EFA, DE) said: “Today’s vote is a major step in the right direction. The EU is finally withdrawing from the climate-hostile Energy Charter Treaty. In view of the climate crisis, the EU must become a climate-neutral continent as quickly as possible. Finally the fossil dinosaur treaty is no longer standing in the way of consistent climate protection, as we no longer have to fear corporate lawsuits demanding billions of euro in compensation brought before private arbitration tribunals.”

Rapporteur for the Industry, Research and Energy Committee Marc Botenga (The Left, BE), said: “The Energy Charter Treaty allows fossil fuel multinationals to sue states and the European Union if climate policies affect their profits. In the midst of a climate crisis, this is a contradiction, in addition to being very costly for taxpayers. Alongside civil society, a significant movement has been built to exit from this treaty and I am happy to see this is bearing fruit today. It is now necessary to speed up the rate of public investments in renewables.”

Background

The Energy Charter Treaty (ECT), a multilateral agreement focused on the energy sector, was established in 1994 to facilitate international cooperation and provide a framework for investment protection, trade, and dispute resolution within the energy field. However, it has remained largely unchanged since the 1990s, becoming outdated and one of the most litigated investment treaties globally. The Commission proposed a coordinated withdrawal by the European Union and its member states, as it considers the Treaty to be no longer compatible with the EU’s climate goals under the European Green Deal and the Paris Agreement, predominantly due to concerns over continued fossil fuel investments.