Energy Charter Treaty

Jim Shannon Excerpts

Tuesday 21st March 2023 Westminster Hall

[Chris Skidmore (Kingswood) (Con)]

I beg to move,

That this house has considered the Energy Charter Treaty.

It is a pleasure to serve under your chairmanship, Mr Gray. I am grateful to the Minister responding today. I know he is currently very busy, preparing the finishing touches to the Government’s response to the net zero review, which I submitted as the review’s independent chair. I hope he will excuse me taking this chance to place on his ministerial desk another precious opportunity for the UK to demonstrate clear and decisive climate leadership.

I know that the Minister is all too aware of the opportunity that net zero and green growth present to the UK: new industries, new jobs and a wall of inward investment ready to be deployed into the UK if we are prepared to take the net zero pathway, rather than taking the risk of not zero and turning our backs on the economic opportunity of this decade, if not the century, that net zero provides.

The new economic narrative for net zero that the “Mission Zero” report outlines clearly demonstrates that the choices that the Minister and the Government will make this month—March 2023—over our future net zero investments and policy certainty will potentially define his place in climate and clean-energy history, if he acts now. The rest of the world is watching and waiting to see whether the UK will continue to show international leadership on climate policy.

I suggest that there is another opportunity to deliver international leadership on climate, which is achievable today, that the Minister and the Government can seize while the rest of the world watches and waits to see whether the UK will demonstrate international leadership. The UK Government can make a clear and public commitment to withdraw from the energy charter treaty. That treaty is an investment agreement dating back to the mid-1990s, when the focus was on access to oil and gas reserves in former Soviet countries, and when work to tackle climate change, and recognition of the opportunities of clean and renewable energy, was negligible. Today, the energy charter treaty acts as a millstone around the necks of all signatories who wish to take their climate obligations seriously.

[Jim Shannon (Strangford) (DUP)]

The right hon. Gentleman’s interest in Northern Ireland is always significant. When I ask a question, I am always aware he probably knows the answer, for which I thank him. The aim of the energy charter treaty is to promote energy security through open and competitive markets. Although that is great for the English mainland, in Northern Ireland it is restricted to providers, and the competition is diminished. Does the right hon. Gentleman agree that competitive markets must be available across all of the United Kingdom of Great Britain and Northern Ireland so that we can all get the benefit? I know he is saying we should withdraw, but Northern Ireland is already behind the eight ball, as it is.

[Chris Skidmore]

If the hon. Gentleman looks at the details of the treaty, which I will come to, he will see that it does not create a level playing field for competition. It is weighted in favour of fossil fuel interests. He knows full well, given his interest in clean energy, how Northern Ireland could become a future green energy powerhouse. It wants to ensure that it can continue to build onshore wind turbines, with a huge opportunity for providing green hydrogen. The challenge the energy charter treaty provides to the UK, and Northern Ireland as a proud member of the UK, is that it takes those potential clean and renewable investments and weights them disproportionately against existing fossil fuel commitments that no other country wishes to make. That is a challenge that we need to deal with.

The charter is a relic from a bygone age, which should have long been recognised as serving an obsolete purpose that still places its dead hand across all states that signed it three decades ago, preventing climate investments and, worse, prioritising inexcusable investments in oil and gas, even when the countries themselves do not wish to make them. The energy charter treaty has effectively become a Magna Carta for fossil fuels, and it is being weaponised by fossil fuel companies to sue Governments for introducing climate policies.

Recently, Italy was sued for its ban on offshore oil drilling. The Netherlands has been sued for its coal phase-out law. Several companies have taken the Dutch Government to court for their decision to phase out fossil fuels by 2030, claiming damages of €3.5 billion. Slovenia has also been sued for its fracking ban