Energy Charter Treaty is losing support. UK also considering withdrawal

UK Energy Minister Graham Stuart has said the country could withdraw from the international Energy Charter Treaty if its reform fails. The international treaty, which was created to protect energy investments, is now seen as an obstacle to faster decarbonisation. The Guardian and Euractiv report.

Criticism comes from many quarters

The ECT's critics include the European Union, which says that remaining in the treaty would "clearly undermine" climate goals. France, Germany, Spain and eight other countries have already announced that they will withdraw from the treaty, and the EU is also preparing to leave collectively. The UK and Japan are the only major economies that have not yet committed to withdrawing from the ECT.

The UK's Climate Change Committee advisers said in July that the UK should withdraw from the ECT because "continued membership poses a risk both to a timely climate transition and to taxpayers".

Chris Skidmore, a former UK energy minister who led a government review of policies to achieve net-zero emissions in 2022, said the ECT is "a weapon for fossil fuel companies to sue governments for introducing climate policies" and is "a threat to the UK's net-zero ambitions".

Skidmore proposed an amendment to the Energy Bill, which Parliament will debate next week, calling for the UK to withdraw from the ECT.

Supporter of reform

The UK has traditionally been a "strong supporter" of reforming the treaty. Minister Graham Stuart said that if reforms are not approved by November, the UK will consider withdrawing from the treaty.

"Rather than remain stuck indefinitely with an outdated treaty, the UK wants to reach agreement on a modernised treaty as quickly as possible. In its current form, the treaty will not support countries that want to move to cleaner and cheaper energy sources, and could even penalise our country for leading these efforts," Stuart said.

The Energy Charter Treaty allows companies to sue governments over policies that would reduce their future profits. Energy companies have previously brought lawsuits over the phase-out of coal-fired power plants, the end of offshore oil extraction and bans on fracking, with some receiving large sums funded by taxpayers.