Britain has long advocated for the modernisation of the Energy Charter treaty, recognising the urgent need to address climate change and align the treaty with modern energy priorities, international treaty practice and climate commitments. In its unmodernised form, the treaty is focused on trade and investment in fossil fuels with some major renewable energy technologies outside its scope.
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. This modernised treaty was supposed to have been adopted in November last year.
It would have had a much stronger focus on promoting clean, affordable energy, such as carbon capture, utilisation, and storage as well as hydrogen and other renewables. It would also have strengthened the UK government’s sovereign right to change its energy system to reach net zero and protect UK investors abroad. However, several EU member states have decided to leave the treaty, leading to an impasse on modernisation.
Since the adoption of modernisation was postponed at the Energy Charter Conference in November 2022, my colleagues have been closely monitoring developments on treaty modernisation, including the positions of contracting parties such as the EU.
In a context that continues to develop near weekly, I would like to reassure you Ministers are continuing to carefully consider the views of stakeholders in business, civil society and Parliament to inform the UK’s approach as well as carefully assessing how to take forward their priorities in relation to the treaty.
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, including whether the country will leave.
I hope this update is helpful.