LONDON — The U.K. will leave an “outdated” international energy treaty after ministers concluded it could stymie efforts to achieve net zero carbon emissions by 2050.
Energy Minister Graham Stuart will confirm on Thursday that the U.K. is following several other countries — including France, Spain, and Germany — in quitting the controversial Energy Charter Treaty (ECT).
Environmental campaigners welcomed the news, saying that the treaty could undermine U.K. efforts to combat climate change.
The decision in Westminster comes as the EU itself also seeks a route to withdraw, although not all countries in the bloc want to follow suit.
First agreed in 1994, the ECT offers legal protections to energy investments and was designed to promote Western financial backing for projects in former Soviet states.
But critics say it has exposed governments to legal action from fossil fuel companies and their investors, who have used the treaty to sue governments over clean energy and climate policies that could hit their profits.
Stuart, the U.K. junior minister responsible for international climate policy, said that remaining a member of the treaty could “penalize” the U.K. for its pursuit of net zero.
“The Energy Charter Treaty is outdated and in urgent need of reform, but talks have stalled and sensible renewal looks increasingly unlikely,” Stuart said in a statement shared with POLITICO.
“Remaining a member would not support our transition to cleaner, cheaper energy, and could even penalize us for our world-leading efforts to deliver net zero.”
The U.K. is not the first country to decide to quit the treaty, with nine EU countries already announcing plans. But the decision will hearten green campaigners who have questioned the U.K. government’s commitment to net zero under Prime Minister Rishi Sunak.
Jonny Peters, chief of staff at climate change think tank E3G, which has campaigned against the ECT, said the international pact was “incompatible with our climate commitments.”
“Now the government has taken this welcome decision, the U.K. needs to develop a diplomatic strategy around this and make other investment agreements compatible with net zero,” Peters said.
Stuart, who is also the ministerial lead for U.K. oil and gas policy, sought to reassure investors that the country would still hold the “strongest legal protections for those who invest here.”
The U.K.’s withdrawal will take effect after one year, the Department for Energy Security and Net Zero said, at which point the ECT’s protections will no longer apply to any new energy investments, including those supporting fossil fuel developments.
However, a 20-year sunset clause means the government could still be exposed to legal action under the treaty from companies behind existing investments.
Negotiations between countries to modernize the treaty so that it protects climate-friendly investments have hit a stalemate. The U.K. said last year it would leave if no deal was reached, although it missed a self-imposed November deadline to confirm its stance.
Shaun Spiers, executive director at the Green Alliance think tank, said that the U.K.’s decision to quit the ECT would “strengthen global efforts to roll out cheap, clean renewable energy.”