Recent Investment Cases Against EU Member States: Europe’s Green Energy Policies Under Threat?

Abstract

As a consequence of rising environmental concerns, a substantial number of EU member states undertook various programs aimed at subsidizing the renewable energy sector and promoting related foreign (and domestic) investment. During the 2010s, several renewable energy programs were replaced by less favourable legal regimes. These changes led to foreign investors suing the relevant countries, through the controversial investor-state dispute settlement (ISDS) mechanism reserved solely for foreign investors. The costly nature of ISDS proceedings (such as legal fees and large arbitral awards) could cause a discouraging effect among member states considering similar renewable energy programs. This research thus aimed to examine whether such concerns have potential merit, whether the cases result in a downturn for renewable promotion in the EU. The method for doing so was through investigating two ISDS cases, followed by an analysis of the two affected countries' stance towards renewable energy before, during and after the ISDS process, and briefly discussing what lessons for other states could be found in the rulings. The research's finding was that a clear discouraging effect could not be established in either cases, and that it is unlikely that ISDS will negatively affect renewable energy promotion.