The European Commission has launched an in-depth investigation to determine whether a €42.2 million arbitration payout ordered against Romania violates EU State aid rules. The case centers on compensation awarded to ten energy companies after Romania retroactively modified its green certificate support scheme for solar photovoltaic power plants.
Romania established the renewable energy support framework in 2011 with the European Commission’s approval under State aid rules. However, subsequent legal revisions in 2013 and 2014 altered the promised compensation. In response, ten corporate investors—including LSG Building Solutions, Green Source Consulting, and Core Value Capital—initiated international arbitration under the Energy Charter Treaty. An arbitral tribunal ruled in February 2024 that Romania had breached the treaty and ordered the state to compensate the investors for financial losses, alongside interest and legal fees. Romania subsequently notified the award to the Commission and deposited funds into a dedicated account for the beneficiaries.
The European Commission’s preliminary position holds that enforcing the arbitral award constitutes illegal State aid under Article 107(1) of the Treaty on the Functioning of the EU. Under European legal standards, State aid measures that conflict with broader EU treaty principles cannot be declared compatible with the internal market.
Crucially, the regulator emphasizes that because the underlying dispute occurred between an EU member state and EU-based investors, international arbitration violates EU legal autonomy. Previous landmark rulings by the Court of Justice of the European Union, such as the Achmea and Komstroy decisions, established that intra-EU investor-State arbitration clauses in bilateral investment treaties and the Energy Charter Treaty are incompatible with EU law.
While the Commission prohibits intra-EU investment arbitration, it noted that clean energy investors retain access to traditional legal remedies through national courts and EU legal channels. The formal investigation gives Romania and interested third parties the opportunity to submit comments, without prejudging the final regulatory outcome.