I am aware that, following a review of its membership, the Government has announced that the UK, along with nine EU member states, will leave the ECT.
In 2022, the UK reached a landmark agreement to modernise the terms of the ECT, maintaining its current benefits while supporting the transition to cleaner energy. The modernised treaty, for which the UK has been a strong advocate, was supposed to have been adopted in 2022. I understand that it would have a much stronger focus on promoting clean, affordable energy, such as carbon capture, utilisation and storage as well as hydrogen and other renewables. It would also have strengthened the UK Government’s sovereign right to change its energy system to reach net zero and protect UK investors abroad. However, several EU member states decided to leave the treaty, leading to an impasse on modernisation.
I understand that after considering the views of businesses, industry and civil society, Ministers have decided to instigate the UK’s withdrawal, which will take effect one year after the ECT Depository is notified, removing protections for new investments after this period.
I am assured that with £30 billion invested in the energy sector since September 2023, the UK continues to lead the world in cutting emissions, attracting international investment and providing the strongest legal protection for those who invest here.
(May 2024)