The UK has withdrawn from the Energy Charter Treaty, with the government putting the exit down to a failure to agree “vital modernisation”.
The purpose of the treaty, which has been in place since 1994, was to ensure international investment in the energy sector. Historically, it has provided protections for investors in fossil fuels, though the UK and others have been seeking to modernise it, driving proposals that would see it give better backing to cleaner technologies such as carbon capture, utilisation and storage, and hydrogen.
However, these talks – which have been ongoing for several months – have led to a stalemate, with the UK opting to leave alongside nine EU member states, including France, Spain and the Netherlands.
A modernised version of the treaty should have been adopted in November 2022 maintaining current benefits while extending protections to renewables. However, with discussions leading to an impasse and European Parliament elections forthcoming later in the year, the government suggested modernisation could now be delayed indefinitely.
Energy Security and Net Zero Minister, Graham Stuart, explained: “The Energy Charter Treaty is outdated and in urgent need of reform but talks have stalled and sensible renewal looks increasingly unlikely. Remaining a member would not support our transition to cleaner, cheaper energy, and could even penalise us for our world-leading efforts to deliver net zero.”
