France join Poland, Spain and Netherlands to withdraw from ECT amidst modernisation discussions

President Emmanuel Macron announced France’s withdrawal from the Energy Charter Treaty (ECT) on Friday “in line with its climate objectives”.

The ECT has become “the most litigated investment agreement in the world” according to the European Commission. As the EU (and other states) move towards climate neutrality in line with the 2015 Paris Agreement, the modernisation of the ECT remains under discussion. Among other things, the modernised ECT would allow Contracting Parties to exclude new fossil fuel related investments from ECT protection after 9 months, and phase out existing protections after 10 years (reducing the existing period by 50%).

With France’s withdrawal from the controversial treaty, the 4th EU state to exit the agreement this year, the continued progress of modernisation plans remains unclear. The question does remain open as to whether or not withdrawing nations will be subject to the ECT’s 20-year sunset clause, but it is arguable that withdrawing countries will be able to reach a separate agreement on this issue.