On Friday 1 March, the European Commission published a proposal for an EU Council decision to ensure that Member States do not reject proposed amendments to the Energy Charter Treaty (ECT), thereby enabling the agreement on modernising the Treaty to be approved.
The ECT has been contested for several years because it does not take sufficient account of changing energy and climate realities, by protecting investments in the energy sector, including fossil fuels.
“In the absence of any substantial update of the Agreement since the 1990s, the Agreement became increasingly outdated. It has also become one of the most litigated investment treaties in the world, with EU Member States being the principal target of claims by investors, most of them based in other EU countries“, detailed the European Commission.
With this new proposal, the Commission hopes that the process of updating the Treaty, which was initiated in 2018 but has now been blocked for several months due to the lack of a common EU position (see EUROPE 13296/31), can take place at the next Energy Charter Conference at the end of 2024.
Decisions relating to this modernisation of the ECT will then be subject to a unanimous vote.
According to the Commission, the proposed changes to the Treaty’s text consist of “substantial improvements” that will bring the ECT in line with modern standards of investment protection and with the EU’s approach to investment protection in recently concluded free trade and investment agreements.
At the same time, the Commission points out that it has tabled proposals for EU Council decisions on the coordinated withdrawal of the EU and Euratom from the Agreement, “that are to be adopted jointly with this proposal” (see EUROPE 13218/6).
It explains that since the areas covered by the Energy Charter Treaty fall largely within the competence of the Union, Member States cannot remain contracting parties to the Treaty after withdrawal from the Union, unless they are authorised by the Union to do so.
In the meantime, the proposal to approve the agreement to modernise the Treaty will be discussed by the Committee of Permanent Representatives of the Member States to the European Union (Coreper I) on Wednesday 6 March, and will then be submitted to the European ministers for a decision at the Competitiveness Council on Thursday 7 March.
To see the Commission’s proposal: https://aeur.eu/f/b46 (Original version in French by Pauline Denys)