The Rise and Fall of a Treaty: Is the EU's Withdrawal from the Energy Charter Treaty in Line or at Odds with its Ambitions to Achieve a Locally Driven Energy Transition?

In order to meet the EU’s climate goals, the Clean Energy Package envisages a fundamental transformation of the energy sector, a decentralisation away from fossils fuels towards renewable sources of energy with local energy communities playing a significant role in making the transformation publicly acceptable. But in a decentralised energy system – do we still need a multilateral energy treaty?
As of 28th June 2025, the EU is no longer a party to the Energy Charter Treaty (ECT). This chapter explores the impact of the EU’s withdrawal on the protection of energy investments. It addresses the main criticisms of the ECT and takes a fresh look at the extent to which investment protection provisions in a multilateral energy treaty might contribute to a just energy transition by supporting a flow of private finance towards local communities. By doing so it provides a new perspective from which to judge the strengths and weaknesses of the ECT and argues that there is still a valuable discussion to be had about what lessons we can learn from this treaty and how these lessons can feed into a new investment regime that is in line with the EU’s climate goals.