UK quits outdated energy treaty

Minister Amanda Milling attends the Accelerating innovation: Collaboration for a net zero future at Cop 26 on the 9th November 2021 at the SEC,Glasgow.

The UK has left an ‘outdated’ treaty that could penalise shift to net zero.

Leaving this incredibly flawed treaty is a brilliant win for our environment and the climate.

The UK is pulling out of a treaty that lets fossil fuel giants sue governments over their climate policies. The UK Government said the country was withdrawing from the Energy Charter Treaty after efforts to modernise it ended in stalemate.

The controversial treaty was established in the 1990s when the world energy system was heavily dominated by fossil fuels and enables foreign companies to challenge energy policies that threaten their investments, using secretive arbitration courts.

It was originally designed to encourage international energy investment but a number of countries have faced costly legal challenges over reducing their reliance on fossil fuels and boosting renewables.


The Department for Energy Security and Net Zero said efforts to modernise the treaty to better support cleaner technologies had led to stalemate among European countries. The UK has joined France, Germany, Spain and the Netherlands in withdrawing from the agreement.

Graham Stuart, the minister of state for energy security and net zero, said: ”The Energy Charter Treaty is outdated and in urgent need of reform but talks have stalled and sensible renewal looks increasingly unlikely.

“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.

“With £30 billion invested in the energy sector just since September, we continue to lead the world in cutting emissions, attracting international investment and providing the strongest legal protections for those who invest here.”


Shaun Spiers, executive director of environmental think tank Green Alliance, said: “Civil society organisations and parliamentarians from all political parties have been clear that the Energy Charter Treaty is an out-of-date agreement and undermines our efforts to tackle climate change.

“We welcome the UK’s decision to leave, which will strengthen global efforts to roll out cheap, clean renewable energy.” 

Kierra Box, campaigner at Friends of the Earth, said: "Leaving this incredibly flawed treaty is a brilliant win for our environment and the climate, and a sensible move as European governments exit the agreement in ever greater numbers - citing risks to their sovereignty and climate progress. 

"Future UK governments will now have more freedom to take ambitious action to protect our planet, without the threat of being sued for millions of pounds by companies based overseas. 


"But the problem doesn't end there - similar mechanisms still exist within other treaties, enabling overseas investors to sue governments in tens of nations around the world, including the UK. To truly safeguard our planet, we need to rid ourselves all of agreements that prioritise the business interests of a few wealthy shareholders above our collective future."

Kerry McCarthy, the shadow climate minister, said: “We are in an urgent global fight against the climate emergency. We cannot allow fossil fuel companies to stop democratically elected governments from taking strong climate action. 

"Labour has long argued that the Energy Charter Treaty is clearly outdated and not fit for purpose – it is good that the government has finally taken the step to leave it.”

But she criticised the government for failing to deliver the clean power Britain needs, adding: “Labour can cut bills and make Britain a clean energy superpower, tackling the climate crisis with good jobs for our country.”

This Author

Emily Beament is the PA environment correspondent. Brendan Montague is editor of The Ecologist.

More from this author