Why is Britain quitting the Energy Charter Treaty?

(Context, 23 Feb 2024) Britain joins several EU countries quitting the Energy Charter Treaty that let energy firms sue when government carbon-cutting plans affect profits.

Britain announced this week that it would withdraw from the Energy Charter Treaty (ECT) over its failure to align with its net zero plans.

Since the late 1990s, the Energy Charter Treaty (ECT) has allowed firms and investors to sue governments whose plans to cut emissions from fossil fuels could hurt corporate profits.

Its critics say the threat of legal action under the ECT could deter governments from enacting clean energy policies that are vital to achieving international climate goals.

Britain said the treaty was in urgent need of reform and the failure of signatory parties to modernise it does not support its transition to clean energy.

The European Commission backtracked on its proposal to agree to reforms and instead recommended all member states jointly quit the treaty in July, after dissatisfaction with the modernisation talks prompted several EU governments to initiate withdrawal unilaterally.

Eleven countries have now announced their intention to quit the treaty.

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Context, 23 Feb 2024: Why is Britain quitting the Energy Charter Treaty?