The UK has announced that it will review its membership of the Energy Charter Treaty (the “ECT” or “Treaty”) if there is no agreement on modernisation by November 2023. This announcement comes after a second vote on modernisation, previously scheduled for April 2023, was postponed. The UK and EU had been key drivers in the modernisation of the ECT, which was agreed in principle (the Agreement in Principle, or “AIP”) in June 2022.
We reported on the modernisation of the ECT last year. The proposed amendments to the ECT included:
- a “flexibility” mechanism that would allow States to phase out existing and future fossil fuel investment protections after 10 years;
- an updated list of energy materials and products to be covered by the provisions of the Treaty (such as biogas and hydrogen); and
- amendments to certain definitions, including investor and investment and the introduction of a definition for ‘indirect expropriation’.
However, as previously reported, the modernisation of the Treaty became uncertain last year following announcements from a number of EU Member States of their intentions to withdraw.
EU Withdrawal Update
Previously, the European Commission (“EC”) had targeted a co-ordinated, EU-wide approach to the ECT, in an attempt to use the block’s bargaining power to achieve the modernisation. However, Read more
