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17 Oct 2022

Europe: EU poised to agree on joint exit from Energy Charter Treaty; UK also to exit

In October 2022, France became the fourth country this year to announce its exit from the Energy Charter Treaty (ECT), an international agreement that protects the investments of energy companies, over climate concerns. Spain and the Netherlands had previously confirmed their intention to withdraw, the Polish lower chamber of Parliament also voted to formally leave the treaty. Italy withdrew from the controversial treaty in 2016.

In November 2022, Germany announced its intention to leave the Treaty. Slovenia, Denmark, Ireland and Portugal have since also announced they intend to leave.

Climate campaigners are urging governments and the EU to reject the ECT, which investors in the bloc have been using to challenge decisions by EU countries to phase out fossil fuels. The EU has been negotiating on behalf on its member states to reform the ECT, with a preliminary deal announced in June, however this effort to "modernise" the treaty has been criticised as insufficient.

Following a deadlock in talks, the Belgian EU presidency reached a new deal with the Commission and member states in March 2024. MEPs voted to leave the treaty in April 2024. The compromise solution offers a coordinated withdrawal of the EU as a whole but allows member states who want to modernise the treaty freedom to stay.

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