Energy Charter Treaty

Thank you for contacting me about the Energy Charter Treaty (ECT). 

As you will be aware, for the last two years, those party to the ECT have been negotiating its modernisation to ensure that it is aligned with common climate objectives. An announcement was made on 24 June 2022 of an agreement to this end. 

The modernised treaty, which is due to be signed in November 2022, will protect the UK Government’s sovereign right to change its own energy systems to reach emissions reductions targets in line with the Paris Agreement. It has a stronger climate focus, clarifying that states can regulate to reach emissions reductions targets, and includes new protections for green and low-carbon technologies. 

The UK tabled terms which mean new investments in all types of fossil fuels lose protection under the ECT following entry into force. Existing investments in fossil fuels will lose protection under the ECT ten years after entry into force of the modernised treaty, except for existing investments in coal which would lose protection from 1 October 2024. This position includes some exceptions for abated gas, which will play a key role in the UK’s net zero transition.

Thank you again for taking the time to contact me.