UK to Withdraw from Energy Charter Treaty

March 12, 2024

Reading Time : 1 min

On 22 February 2024, the UK announced it is withdrawing from the Energy Charter Treaty (ECT) on the basis that it is incompatible with the energy transition, being the 11th state to do so. However, ECT protections for existing renewable and fossil fuel investments will continue for another 20 years, and new investments may be structured to be protected under other investment treaties.

A feature of the energy transition is investor-state claims related to changes in government support for the transition (as seen with the raft of claims against Spain for its change of policy for solar projects in the 2010s) and the imposition of policies to restrict production and use of fossil fuels (such as the claims against the Netherlands for prohibiting coal-fired power generation and against Italy for banning oil and gas exploration). Such claims are typically brought under investment treaties which provide protections for cross-border investments, including in fossil fuels, and have been criticised as being negative to the transition. A key investment treaty in this area is the ECT, but efforts to reform it have so far been unsuccessful—and the UK has now announced it is withdrawing, following the course taken by 10 other states including Germany, Spain, France and the Netherlands. However, under the ECT’s “sunset clause”, qualifying investments made prior to the date of withdrawal will continue to be protected for the next 20 years. Further, new investments may still be protected if they are structured to fall under other investment treaties. Therefore, investor-state claims will continue to be brought.

Read more in our full client alert here

Share This Insight

Previous Entries

Speaking Energy

August 07, 2024

*Thank you to JaKell Larson, 2024 Akin Summer Associate, for her valuable collaboration on this article.

...

Read More

Speaking Energy

July 31, 2024

Interstate oil, liquid and refined products pipelines regulated by the Federal Energy Regulatory Commission (FERC) will soon be able to raise their transportation rates (provided they were set using FERC’s popular Index rate methodology) in the wake of a significant new decision by the District of Columbia Circuit (the D.C. Circuit) in Liquid Energy Pipeline Association v. FERC (LEPA).

...

Read More

Speaking Energy

July 29, 2024

On Wednesday, July 24, 2024, the U.S. House of Representative Committee on Energy and Commerce held a Subcommittee on Energy, Climate, and Grid Security hearing to review the Federal Energy Regulatory Commission (FERC or Commission) Fiscal Year 2025 Budget Request. Members of the Subcommittee had the opportunity to hear testimony from all five Commissioners, including FERC Chairman Willie Phillips and Commissioner Mark Christie, as well as the three recently confirmed commissioners, David Rosner, Lindsay See and Judy Chang. In addition to their prepared remarks, the five commissioners answered questions on FERC’s mandate to provide affordable and reliable electricity and natural gas services nationwide, while also ensuring it fulfills its primary mission of maintaining just and reasonable rates.

...

Read More

Speaking Energy

July 29, 2024

On July 9, 2024, the U.S. Court of the Appeals for the D.C. Circuit held that the Federal Energy Regulatory Commission (FERC or the Commission) erred in ordering refunds for certain bilateral spot market transactions in the Western Energy Coordinating Council (WECC) region that exceeded the $1,000/megawatt-hour (MWh) “soft” price cap for such sales.1 Finding FERC failed to conduct a “Mobile-Sierra public-interest analysis” before “altering” those contracts by ordering refunds, the court vacated FERC’s orders and remanded the case to FERC for further proceedings.2

...

Read More

Speaking Energy

July 8, 2024

On June 28, 2024, in Loper Bright Enterprises v. Raimondo, the U.S. Supreme Court overruled Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., which for 40 years required court deference to reasonable agency interpretations of federal statutes in certain circumstances, even when the reviewing court would read the statute differently. The Court ended “Chevron deference” and held that courts “must exercise their independent judgment in deciding whether an agency has acted within its statutory authority.” In doing so, the Court upended a longstanding principle of administrative law that is likely to make agency decisions more susceptible to challenge in the courts.

...

Read More

Speaking Energy

July 3, 2024

We are pleased to share a recording of Akin and ICF’s recently presented “Powering Progress: Decoding FERC Order No. 1920” webinar, along with the program materials.

...

Read More

Speaking Energy

June 12, 2024

Join projects & energy transition partner Ben Reiter at Infocast's Transmission & Interconnection Summit, where he will moderate the “Dealing with the Impacts of Increased Interconnection Request Requirements and Costs” panel.

...

Read More

Speaking Energy

June 4, 2024

Join projects & energy transition partners Hayden Harms and Vanessa Wilson at Infocast's RNG & SAF Capital Markets Summit, where Hayden will moderate the "Investor Perspectives: Private Equity, Infrastructure Funds, & Strategies" panel, and Vanessa will moderate the "Opportunities in Other Biogas/Fuels Markets" panel.

...

Read More

© 2024 Akin Gump Strauss Hauer & Feld LLP. All rights reserved. Attorney advertising. This document is distributed for informational use only; it does not constitute legal advice and should not be used as such. Prior results do not guarantee a similar outcome. Akin is the practicing name of Akin Gump LLP, a New York limited liability partnership authorized and regulated by the Solicitors Regulation Authority under number 267321. A list of the partners is available for inspection at Eighth Floor, Ten Bishops Square, London E1 6EG. For more information about Akin Gump LLP, Akin Gump Strauss Hauer & Feld LLP and other associated entities under which the Akin Gump network operates worldwide, please see our Legal Notices page.