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Sarah Vasani: The intra-EU bilateral investment treaties have been destroyed

21 June 2023

The intra-EU bilateral investment treaties have been ”completely destroyed” by the change of legislation by Brussels so that the investments carried out by companies in EU states fall directly under the incidence of European legislation.

”There is no protection anymore for intra-EU investment under bilateral investment treaties. It has been completely destroyed in the past three years. Most of those treaties have been terminated”, signaled Sarah Vasani, Partner, Co-Head of International Arbitration CMS, at the 9th edition of the Energy Strategy Summit, an event organized by Energynomics.

There are 3.000 bilateral agreements across the globe between companies and states which oblige the states to treat foreign investors with certain levels of standards, but there has been an increasing hostility towards investor-state dispute resolution especially from the EU.

In this new situation, to protect themselves companies have to ensure that if they have an intra-EU investment, they must restructure it as soon as possible and ensure that they do due diligence when investing in renewables in other EU countries (for example, keep documents and records of all the discussions with host country regulators, ministry of energy).

This raises the complexity of operations for companies when they are called to face the challenge to accelerate renewables to get to net zero as quickly as possible, and for that is needed ”an incredible amount of renewables and technology” to transition to net zero by 2050.

”To get there by 2050 or even 2070 we need fundamental economic changes and unprecedented investments from the private sector. This means a massive upscale in technologies and renewables”, according to Vasani.

The International Energy Agency stated that renewable power will account for 90% of the world’s generation with solar and wind comprising 70% of the total. Also, the investments needed are around 4 trillion dollars by 2030 and 100 trillion dollars for the next three decades. This could be done by increasing the investments of the private sector to meet those challenges.

Energy Strategy Summit 2023 was organised by Energynomics with the support of ABB, ASTRASUN Solar, BCR, CEZ Romania, Eaton Electric, Electrica Furnizare, Electro Service RB, Elektra Renewable Support, EnergoBit, Enevo Group, E.ON, Finder, Huawei, MET România Energy, OMV Petrom, OX2 România, Phoenix Contact, Photomate, ProCredit Bank, REI Grup, Renomia Gallagher, Romgaz, Schneider Electric, Signify, Transelectrica, Taw Energy, Volt, WIKA, Wiren, Alexandrion Group, Aqua Carpatica, Klarmedia and Mobexpert.

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