UK energised to exit Energy Charter Treaty?

The UK is contemplating a potential exit from the Energy Charter Treaty due to ongoing disagreements among member states regarding the adoption of updated rules

The UK Government is considering a review of its membership in the Energy Charter Treaty, with the possibility of withdrawal if a consensus on modernised terms cannot be reached by November.

A few months ago, the Chair of Net Zero Review and Former Energy Minister Chris Skidmore urged the government to withdraw from the Energy Charter Treaty (ECT).

The government said a prolonged deadlock regarding the acceptance of newly updated terms has left UK ministers pondering action to secure the country’s energy transition.

The Energy Charter Treaty, established in 1994, was designed to encourage international investment in the energy sector.

The modernised treaty was initially set for adoption in November 2022 and would have placed a stronger emphasis on supporting clean and cost-effective energy options, including carbon capture, utilisation and storage, along with hydrogen and other renewables.

It also aimed to reinforce the UK Government’s sovereign right to adapt its energy system to achieve net zero while safeguarding UK investors abroad.

Several EU member states have opted to withdraw from the treaty, leading to the current impasse in negotiations.

Minister of State for Energy Security and Net Zero, Graham Stuart, said: “Rather than being stuck indefinitely with an outdated treaty, the UK wants to see an agreement on a modernised treaty as quickly as possible.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.”

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