Moldova withdraws from Energy Charter Treaty

CHISINAU. May 4 (Interfax) - Moldova is withdrawing from the Energy Charter Treaty (ECT), a 1994 multilateral agreement on the free movement of energy and cooperation in the energy sector, the press service of the country's parliament reported after the consideration of the relevant bill in both readings at a session on April 30.

"The initiative to withdraw from the ECT comes from the Energy Ministry, which stressed that the treaty is incompatible with the Republic of Moldova's new priorities in regard to ensuring energy security, including by diversifying energy sources and transitioning to renewable energy sources," the press release said.

Chisinau believes that the ECT prioritizes investment in fossil fuels over clean energy solutions. Specifically, the mechanism for investor-state dispute settlement (ISDS) promotes the protection of investors in the fossil fuel sector, the parliament said.

"In the current conditions of the transition to a green and sustainable economy, such mechanisms can hinder investment in renewable energy sources, which could postpone the adoption of measures to fight climate change needed to reduce greenhouse gas emissions and promote clean energy sources," the press release said.

The parliament also noted that the European Union decided to withdraw from the ECT in 2025 and a number of European countries have already completed the withdrawal process, including Romania, Poland, Italy and France.

The ECT is a legal foundation for international energy cooperation that, among other things, provides financial and legal guarantees for protection of foreign investment. Moldova joined the treaty in 1996.