Luxembourg withdraws from the Energy Charter Treaty

The decision to withdraw from the Treaty was made today, on November 18, 2022. The main reason was the Charter’s non-compliance with the terms of the Paris Agreement. The Charter’s main problem is its focus on fossil and nuclear energy sources. Even the modernization of the regulations will not be able to bring countries closer to meeting the climate targets.

Luxembourg is not the only country that has withdrawn from the Treaty. France, Germany, the Netherlands, Spain and Poland have already done the same. However, there is also a significant downside. That is, according to the Treaty, companies can sue states that act contrary to the interests of these companies.

A prime example: last year, RWE filed a complaint against the Netherlands, which decided to phase out coal-based electricity generation by 2030. RWE is now seeking compensation of 1.4 billion euros.