Government Weighs Leaving Treaty Over Lack of Modernisation
- The UK is reviewing its membership of the Energy Charter Treaty if member states do not reach an agreement on modernized terms by November 2023
- warning comes after the UK played a leading role in negotiating an updated treaty, strengthening UK sovereignty in the transition to cheaper and cleaner energy
- but protracted stalemate over whether to proceed with new terms means UK ministers are considering taking action to safeguard the UK’s green transition
The UK is reviewing its membership of the Energy Charter Treaty, Energy Minister Graham Stuart announced today (Friday 1 September), including whether the country will leave.
The treaty has historically provided protections for investors in fossil fuels – the UK’s future membership will depend on whether proposals for the treaty’s modernization are adopted in November.
Landmark Agreement in 2022
Last year the UK reached a landmark agreement to modernise the terms of the Energy Charter Treaty, maintaining its current benefits while supporting the transition to cleaner energy.
The modernized treaty, for which the UK has been a strong advocate, was supposed to have been adopted in November last year. It would have a much stronger focus on promoting clean, affordable energy, such as carbon capture, utilization, and storage as well as hydrogen and other renewables. It would also strengthen the UK government’s sovereign right to change its energy system to reach net zero and protect UK investors abroad.
Lack of European Support
However, several EU member states have decided to leave the treaty, leading to an impasse on modernization. Ministers are therefore reviewing the UK’s membership of the Energy Charter Treaty to support the transition to cleaner, cheaper, and home-grown energy sources, in a mission to bolster energy security.
Minister of State for Energy Security and Net Zero, Graham Stuart, said:
Rather than being stuck indefinitely with an outdated treaty, the UK wants to see an agreement on a modernised treaty as quickly as possible.
In its current form, the Energy Charter Treaty will not support those countries looking to make the transition to cleaner, cheaper energy sources such as renewables – and could even penalise our country for being at the forefront of those efforts.
Countries around the world will be looking to boost their home-grown energy sources, including with new clean technologies – the Energy Charter Treaty therefore must be modernised. That’s why we will be reviewing our membership, and considering withdrawal if that vital modernisation is not agreed.
To Sum Up
The UK will continue to carefully consider the views of stakeholders in business, civil society, and Parliament to inform the UK’s approach. The UK’s strong rule of law means it remains an attractive destination for investment in the energy sector regardless of its Energy Charter Treaty membership.