The European Commission (EC) has announced that the European Union (EU) and Euratom have decided to exit the Energy Charter Treaty (ECT), as it is incompatible with the EU’s climate and energy goals under the European Green Deal and the Paris Agreement. The EC notified the Government of Portugal, the official depositary of the ECT, of their withdrawal, which will take effect in one year. This decision follows the Komstroy judgment by the Court of Justice of the European Union (CJEU), which deemed the ECT’s arbitration clause inapplicable to intra-EU disputes. The EU and its Member States have also reached an agreement to end such arbitration proceedings, ensuring they align with Union law. The ECT, in force since 1998, includes the EU, Euratom, 22 EU Member States, and other countries. Some Member States, including Italy, France, Germany, and Spain, have already exited, or begun withdrawing from the ECT. Efforts to modernise the ECT to align with EU climate goals have stalled due to lack of support, prompting the decision to withdraw. This move reinforces the EU’s commitment to resolving disputes within its legal framework and advancing its environmental policies.