EurOil: UK follows EU member states in exiting Energy Charter Treaty

The UK has become the latest country to withdraw from the Energy Charter Treaty (ECT), an international agreement intended among other things to protect energy investments, that has faced criticism for enabling fossil fuel producers to take governments to court for blocking projects.

Nine EU members – Germany, Spain, France, Denmark the Netherlands and others – have already exited the treaty. In a statement, the UK said last week that it was leaving the ECT because the treaty was not aligned with “net-zero” emission targets.

“The decision will support the UK’s transition to net zero and strengthen its energy security,” the government said, adding that attempts to update the treaty to be in line with the energy transition had not been successful. “The Energy Charter Treaty is outdated and in urgent need of reform but talks have stalled and sensible renewal looks increasingly unlikely,” said the UK’s Minister for Energy Security and Net Zero, Graham Stuart.

The European Commission announced in February last year that it was intending to coordinate the entire bloc’s withdrawal from the treaty, originally established in 1994 to protect energy investments in the former Soviet Union. The owners of Russia’s once-largest oil company Yukos notably accused the country’s government of violating the ECT in the early 2000s when the Kremlin hit the producer with massive tax claims, ultimately leading to its bankruptcy and the nationalisation of its assets.

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