"EU to finally exit ‘climate-wrecking’ energy treaty"

Launched in the 1990s to safeguard energy investments of former Eastern Bloc countries, the Energy Charter Treaty has become a tool used by incumbent fossil energy companies to safeguard their business in the face of perceived EU climate action legislation overreach. 

Climate change advocates campaigned against the treaty for years, prompting several EU countries to announce their exit, before the European Commission proposed the bloc make a coordinated exit in July 2023. 

On Wednesday (6 March), ambassadors from EU countries agreed a proposal – paving the way for formal adoption at a ministers’ meeting on Thursday. There would be the “final adoption of the text on withdrawal tomorrow,” said a member state source familiar with the  negotiations.

The European Parliament is expected to vote in April backing the exit, which is mostly considered a formality...

US-based oil firm Klesch had made waves in late 2023 when it relied on the treaty to sue the EU, Germany and Denmark for €95m. Over a “windfall tax” targeting surplus profits of energy companies during the energy crisis in Europe.

The UK had also announced its exit from the investment treaty on 22 February, “after the failure of efforts to align it with net-zero,” said a British government spokesman.

The new momentum in Brussels, after the July push was stalled, came about due to an amended exit plan – countries that wish to stay in the treaty and continue work on modernising it, like Cyprus, can stay.