EU Parliament approves plan to quit energy charter treaty

By Thomson Reuters Apr 24, 2024 | 6:23 AM

By Kate Abnett

BRUSSELS (Reuters) – The European Parliament gave its consent on Wednesday for the EU to exit the energy charter treaty, an international agreement protecting energy investments, over concerns that it undermines efforts to fight climate change.


The 1998 Energy Charter Treaty allows energy companies to sue governments over policies that damage their investments. In recent years, companies have used it to seek compensation for measures that require shutting down fossil fuel plants.

The European Union wants to leave the treaty, which it says is an obstacle to fighting climate change and shifting to clean energy.

Brussels proposed a joint exit, after EU members including Denmark, France, Germany, Luxembourg, Poland, Spain and the Netherlands announced their own plans to quit, mostly over climate concerns.

Losing the EU would roughly halve the treaty’s current 50 signatories, which also include Azerbaijan, Japan and Turkey.


The Energy Charter Treaty secretariat did not respond to a request for comment.

Green EU lawmaker Anna Cavazzini, who led the Parliament’s work on the treaty exit, said: “This absurd treaty has slowed down climate protection and cost citizens billions in taxpayers’ money in the form of legal costs before private arbitration tribunals and compensation payments to multinational corporations.”


The Parliament’s approval means EU countries can take a final decision to exit the treaty, expected in May, EU officials said. Ministers gave their initial backing last month.

Cyprus and Hungary had wanted to stay in, while other countries were concerned that efforts to modernise the treaty would go to waste with their departure.

To soothe those concerns, EU countries are expected to agree that they will first allow reforms to modernise the treaty to pass, before quitting.

Signatories to the treaty agreed the reforms last year, but they had little chance of coming into force without EU support.

One of the reforms would halve the time non-EU energy firms would continue to enjoy the pact’s protections to their investments in the EU, after the bloc’s departure.

(Reporting by Kate Abnett; Editing by Mark Potter)