UK considers withdrawing from ‘climate-wrecking’ Energy Charter Treaty

The UK government has said it will consider withdrawing from the Energy Charter Treaty if a modernised version that promotes greener energy is not agreed by November, following in the footsteps of several EU member states who have already signalled their intention to leave.

The Energy Charter Treaty, which holds more than 56 signatories including the European Union, has historically provided protections for investors in fossil fuels. It was signed in 1994 to promote international investment in the energy sector and little has changed since then. 

It is controversial as under the current treaty, fossil fuel users can claim compensation if they are forced to shut plants, which is likely to happen more frequently as the world shifts towards cleaner, more sustainable energy.

A modernised treaty that reflects new priorities such as climate change has been in the works since 2020, and was due to be adopted in November last year, however negotiations have reached a stalemate.

Last year, it was revealed that the European Commission was considering proposing that the EU and its 27 member states leave. Last year, Germany, France, Slovenia, the Netherlands and Spain put forward proposals to withdrawn from the treaty. Italy, the only EU state that is not a member, left the treaty in 2016.  

Despite the UK playing a leading role in negotiating the updated treaty, last week energy minister Graham Stuart issued an ultimatum and said the UK was “reviewing its membership” and will consider withdrawal if modernisation is not agreed by November 2023. 

Stuart said: “Rather than being stuck indefinitely with an outdated treaty, the UK wants to see an agreement on a modernised treaty as quickly as possible.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.”

Conservative MP Chris Skidmore, who led a review of the UK’s Net Zero Strategy last year, recently tabled an amendment to the Energy Bill for the UK to leave the Treaty within six months of the act being passed. 

He welcomed the signal that the UK may leave the Treaty and said on X, formerly known as Twitter: “I will continue to press my amendment to leave the Energy Charter Treaty in the Energy Bill next week, as this decision cannot come soon enough.”

Cleodie Rickard, trade campaign manager at Global Justice Now, welcomed the news, describing the treaty in its current form as “climate-wrecking”. 

However, he described the UK’s November ultimatum as “more dither and delay” and said the UK should be making a withdrawal now “to maximise the benefits of leaving this damaging deal”. 

He continued: “The reform process to this treaty has failed - 11 countries are voting with their feet and exiting, meaning there is not enough support to get the so-called modernisation through. 

“Leaving the Energy Charter Treaty is a necessary step to stop fossil fuel companies raising the costs of the green transition across Europe and beyond.”