EU Investigates Romanian €42 Million Arbitration Award to Renewable Energy Investors
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TL;DR
- The European Commission is investigating Romania's planned €42 million payout to renewable energy investors.
- The payment was ordered by an arbitral tribunal following changes to Romania's green energy policy.
- The Commission questions if the award's payment constitutes illegal state aid under EU rules.
- Similar EU-state aid reviews are occurring regarding renewable energy arbitration awards in other countries.
Overview
The European Commission has opened an investigation into Romania's plan to pay €42 million in compensation to renewable energy investors, following an arbitration ruling that Romania breached the Energy Charter Treaty by altering a 2011 green energy support scheme.
What Happened
The European Commission announced it has launched an investigation into Romania's intended €42 million compensation payout to renewable energy investors.
The payment is based on an arbitration decision finding Romania in breach of the Energy Charter Treaty after the country changed its 2011 renewable electricity support scheme, allegedly causing losses to ten investor companies engaged in solar photovoltaic projects.
The Commission's preliminary view holds that the arbitration award and its enforcement may constitute state aid incompatible with EU internal market rules.
A similar issue is currently under dispute in Spain, where investors are also seeking to enforce arbitration awards relating to changes in renewable energy support.
Context
In 2011, Romania implemented a scheme to support renewable energy investment but later altered the program, leading to complaints by solar energy investors.
The Energy Charter Treaty allows for investor-state arbitration to resolve allegations of unfair treatment by states regarding energy sector investments.
The European Commission frequently reviews such state payments to ensure compliance with EU internal market and competition rules.
Why It Matters
- The outcome could determine whether EU member states can implement international arbitration awards involving state payments without breaching EU state aid rules.
- This may impact the enforceability of investor-state arbitration awards across the European Union, especially in the energy sector.