EU Policy. UK blames Brussels as it pulls out of Energy Charter Treaty

The UK government has announced it is quitting a post-Cold War treaty that was intended to protect investments in petroleum-rich post-Soviet states, but has mainly been used by energy firms to sue western European governments, blaming bickering in Brussels for blocking reform.

“The Energy Charter Treaty is outdated and in urgent need of reform but talks have stalled and sensible renewal looks increasingly unlikely,” said minister for energy security and net zero, Graham Stuart, adding: “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.”

The UK government claimed partial credit for brokering draft agreement to modernise the ECT and extend its core investor-state dispute settlement provisions to clean tech such as carbon capture and hydrogen, a process in which the European Commission was instrumental.

But the provisional reform, which critics argued still gave too much protection to oil and gas firms, requires unanimous approval from some 50 parties to the treaty. It foundered in November 2022 when France, Germany, the Netherlands and Spain prevented the EU Council from approving the deal.

One after another, members of the bloc have decided to quit the treaty unilaterally. France, Germany and Poland are already out, with Luxembourg due to follow by the summer, while the Netherlands, Slovenia, Spain, Denmark, Ireland and Portugal have all announced their intention to quit. Italy withdrew in 2016. But the EU as a bloc remains a party to the treaty.

The UK’s move comes amid continued deadlock in Brussels. Belgium, as current EU Council presidency holder, urged government delegates at a Tuesday (20 February) meeting to