Brussels, January 21, 2026 — The European Commission has opened an in-depth investigation to assess whether an arbitration award ordering Bulgaria to compensate ACF Renewable Energy Limited for changes to a renewable electricity support scheme complies with EU State aid rules.
The Commission said Bulgaria introduced a support scheme for renewable electricity production in 2011, then amended it in 2013, 2014, and 2015. Bulgaria notified the scheme in place in March 2016, and the Commission approved it on August 4, 2016.
ACF, a company established in Malta, invested in Bulgaria’s renewables sector in 2012 by purchasing a solar photovoltaic power plant that benefited from the 2011 support scheme. After Bulgaria introduced changes in 2013 and 2014, ACF continued receiving support under the modified framework but initiated arbitration proceedings seeking compensation for support it said it would have received if the scheme had not been amended.
An arbitral award dated January 5, 2024, found Bulgaria breached the Energy Charter Treaty and ordered the country to pay ACF €61.04 million (approximately $71.3 million) in compensation plus interest. Bulgaria notified the award to the Commission under State aid rules, but has not paid the compensation.
State Aid Concerns
The Commission said its preliminary view is that the arbitration award and its implementation would constitute State aid under Article 107(1) of the Treaty on the Functioning of the European Union and would be incompatible with the internal market.
The Commission added that State aid cannot be approved as compatible if the measure breaches other provisions of EU law.
Intra-EU Arbitration Issues
The Commission said the dispute was an intra-EU investor-State arbitration and it will assess whether the award and its implementation could breach EU treaty provisions governing the jurisdiction of the Court of Justice of the European Union, including Article 19(1) of the Treaty on European Union and Articles 267 and 344 TFEU.
The opening of the investigation allows Bulgaria and interested third parties to submit comments, without prejudging the outcome.
Background
The Commission pointed to CJEU case law including the 2018 Achmea judgment and the 2021 Komstroy ruling, which held that intra-EU investor-State arbitration under the Energy Charter Treaty cannot apply within the EU legal order. The EU withdrew from the Energy Charter Treaty effective June 27, 2025.
The Commission said reliable and transparent renewable support measures are important for investor confidence and for meeting the EU’s decarbonisation objectives, but stressed that investors remain protected through EU law and national courts. It also noted that the Renewable Energy Directive includes an obligation for member states to avoid revising support in ways that undermine the economic viability of projects already benefiting from it, although no such provision existed in 2013.
