The United Kingdom's government is currently undergoing a comprehensive review of its membership in the Energy Charter Treaty, citing concerns that the treaty's provisions may conflict with the nation's international climate commitments. Westminster has articulated its desire for the treaty to undergo a process of "modernization" and has not ruled out the possibility of withdrawal if the necessary reforms are not enacted. This move follows a similar decision by the European Union just a month ago.

The Energy Charter Treaty, historically focused on safeguarding investments in fossil fuels, has faced criticism for potentially providing a platform for significant legal claims by oil and gas companies. The UK government has expressed that its continued participation in the treaty will depend on the adoption of proposed modernization measures slated for discussion in November.

Notably, a substantial agreement aimed at updating the treaty was reached last year. These proposed changes, with a strong emphasis on carbon capture and storage (CCS), hydrogen, and other renewable energy sources, were scheduled for adoption in November of the previous year. However, complications arose as several European Union member states opted to withdraw from the treaty, resulting in an impasse regarding its modernization.

Graham Stuart, the UK's Minister for Energy Security and Net Zero, emphasized the urgency of modernizing the Energy Charter Treaty. He stated, "Rather than remaining indefinitely bound by an outdated treaty, the UK is committed to achieving an agreement on a modernized treaty as swiftly as possible. In its current form, the Energy Charter Treaty may not adequately support countries seeking to transition to cleaner and more cost-effective energy sources like renewables. It could even penalize our nation for being a leader in these efforts."

He added, "Countries worldwide are striving to enhance their domestic energy capabilities, including through the adoption of innovative clean technologies. Therefore, the modernization of the Energy Charter Treaty is imperative. That's why we are reevaluating our membership and considering withdrawal if essential modernization measures are not agreed upon."

Stuart also underscored the UK's commitment to soliciting input from various stakeholders, including business entities, civil society, and parliament, to shape the nation's stance on the matter. He emphasized that the UK's robust adherence to the rule of law continues to make it an attractive destination for energy sector investments, regardless of its status within the Energy Charter Treaty.