Milis Energy: CJEU confirms inapplicability of ECT in intra-EU relations, shields volatile energy subsidies from property rights, freedom of enterprise assault.

In Case C-306/19 Milis Energy the CJEU addresses on of the elephants in the energy transition room namely the support measures given by Member States to renewable energy installations, in particular photovoltaic energy, and the legality of reducing those support measures (a phenomenon which is to be expected seeing as the variety of energy transition measures gradually make renewable energy move from an infant industry to a mature industry).

As readers will know, reduced support and the sometimes capricious development of national energy subsidies has landed many an EU government in court, including in investor-State dispute settlement. Those latter cases often involve the controversial Energy Charter Treaty (ECT), and in current case the CJEU, not unexpectedly given its Komstroy case-law, holds that Milis, being incorporated in Italy, cannot call upon the ECT in its dispute with a Member State.

Articles 16 (freedom of enterprise) and 17 (property rights) of the EU Charter of Fundamental Rights were held not to protect Milis. With respect to Article 17, the CJEU emphasised that Member States enjoy a wide margin of discretion in the context of renewable energy subsidies and that both EU law and Italian law being subject to such volatility, an economic operator active in the sector necessarily must assume a regulatory and subsidy environment subject to frequent change, hence ruling out the qualification of enviseaged State subsidies in the sector as being a ‘good’ protected by Article 17 [41 ff]. With respect to Article 16, the Court emphasises the great discretion State enjoy to regulate economic enterprise [54 ff].

Geert.