Commission opens in-depth investigation into arbitration award ordering Romania to pay compensation to ten energy investors

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The European Commission has opened an in-depth investigation to assess whether an arbitration award ordering Romania to pay compensation to ten investors for changes to a renewable electricity support measure is in line with EU State aid rules.

The Commission’s investigation

Romania established a scheme to support the production of electricity from renewable sources through green certificates, which was approved under State aid rules in July 2011. Romania amended the scheme several times in 2013, 2014 and later. The Commission approved the amendments to the scheme under State aid rules in May 2015 and December 2016.

A group of ten companies that invested in five solar photovoltaic power plants that benefitted from the scheme started arbitration proceedings against Romania following the amendments: LSG Building Solutions GmbH, Green Source Consulting GmbH, Core Value Investments GmbH & Co. KG Gamma and Core Value Capital GmbH, Anina Pro Invest Ltd., Giust Ltd., Risen Energy Solar Project GmbH, Pressburg UK GmbH, Solluce Romania 1 B.V., and SC LJG Green Source Energy BETA S.R.L. The companies claimed compensation for the support they would have received if Romania had not modified the scheme.

An arbitral tribunal found that Romania infringed the Energy Charter Treaty (‘ECT’) and on 20 February 2024 ordered Romania to compensate the investors for losses allegedly suffered due to the modifications. The awarded compensation amounts to €42.2 million plus interest and additional costs. Romania notified this award to the Commission under State aid rules and informed the Commission it had made a payment under the award to an account opened in the name of the beneficiaries of the award.

At this stage, the Commission’s preliminary view is that the arbitration award and its implementation constitute State aid within the meaning of Article 107(1) of the Treaty on the Functioning of the EU (‘TFEU’), which is incompatible with the internal market. The Commission will further investigate the measure and its compatibility with the internal market, and in particular a possible breach of the EU Treaties by the aid measure.

State aid is prohibited unless it is approved by the Commission as compatible with the functioning of the internal market. A measure that breaches other provisions of EU law cannot be declared compatible under State aid rules.

The dispute leading to the arbitration award was an intra-EU dispute. Therefore, the Commission will assess further whether the award and its implementation could be in breach of Article 19(1) of the Treaty on European Union and Articles 267 and 344 TFEU regarding the ultimate jurisdiction of the Court of Justice of the European Union (‘CJEU’), as well as the general principle of autonomy of the EU legal order.

The opening of an in-depth investigation gives Romania and interested third parties the opportunity to submit comments. It does not prejudice the outcome of the investigation in any way.

Background

Case law from the CJEU sets out that intra-EU investor-State arbitration based on bilateral investment treaties are contrary to EU law (2018 Achmea judgment C-284/16). The Commission’s July 2018 Communication on the protection of investments explains that this also applies to the investor-State arbitration clause in the ECT. In 2019, 22 EU Member States signed a declaration on the consequences of the Achmea judgment and its application to the ECT.

In 2021, the CJEU in the Komstroy judgment ruled that the ECT is an integral part of EU law and that the ECT’s arbitration clause cannot apply intra-EU. In 2024, EU Member States signed a declaration on the legal consequences of the judgment of the Court of Justice in Komstroy and common understanding on the non-applicability of the ECT as a basis for intra-EU arbitration proceedings. This was followed by the EU’s withdrawal from the ECT, effective as of 27 June 2025. Several Member States have also withdrawn. Romania withdrew on 22 May 2026, with effect from 23 May 2027.

Reliable and transparent provisions for supporting production of electricity from renewable energies are important to ensure investor confidence and enable investments necessary for the Clean Industrial Deal and to reach the Union’s decarbonisation objectives. The fact that EU law precludes intra-EU investment arbitration under bilateral investment treaties or the ECT does not mean that investors do not enjoy investment protection in the EU. Actions by individual investors seeking the annulment of national measures or claiming financial compensation are in the competence of national courts. Investors from the EU enjoy the protection granted by EU law.

If an investor considers its investment is wrongly jeopardised by a Commission State aid decision, it may challenge the decision directly before the General Court. Finally, the Renewable Energy Directive (2018/2001) provides for an obligation of Member States to ensure that the support granted to renewable energy projects is not revised in a way that negatively affects the rights conferred to companies and undermines the economic viability of projects that already benefit from support. No such provision existed in 2013.

For more information

The non-confidential version of the decision will be made available under the case number SA.113263 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved. New publications of State aid decisions on the internet and in the Official Journal are listed in the Competition Weekly e-News.