What the UK’s Energy Charter Treaty exit means in practice

The true impact of the UK’s departure from the controversial Energy Charter Treaty will depend heavily on the potential suspension of a sunset clause that permits investors to bring cases up to 20 years after a country leaves

The UK government’s decision to exit the controversial Energy Charter Treaty on February 22 may be undermined by the existence of a 20-year sunset clause that leaves countries exposed for decades after withdrawing from the agreement. If the UK does not successfully neutralise the sunset clause, the government faces the risk of potential claims of up to £11.8bn from foreign investors in fossil fuel-generated power plants in the UK.