COPENHAGEN/BRUSSELS (Reuters) -Denmark is working towards exiting the Energy Charter Treaty, its energy ministry said on Thursday, casting further doubt over an international agreement that critics say has become an obstacle to tackling climate change.
“As the Energy Charter Treaty looks now, it creates unnecessary uncertainty about the green transition,” Climate, Energy and Utilities Minister Lars Aagard said in a statement.
The 1998 Energy Charter Treaty (ECT) protects investments in both green energy and fossil fuels, allowing companies to sue governments over policies affecting their investments.
In recent years it has been used to challenge policies that require fossil fuel plants to shut – prompting a handful of European Union countries to announce plans to quit the ECT.
Aagard said other existing legal frameworks would ensure that, even without the ECT, investors can safely invest in green projects in Denmark and elsewhere.
The 27-country EU – whose members make up roughly half of the treaty’s signatories – is considering a joint EU exit, after France, Germany, the Netherlands, Poland and Spain already announced plans to quit.
Treaty members negotiated reforms to the ECT last year, but EU countries rejected them – meaning the reforms cannot yet apply.
The European Commission told EU countries in February that a joint EU exit from the treaty appeared “inevitable”.
But EU countries are still split over the plan, according to notes from their latest meeting to discuss it last month, seen by Reuters.
In that closed-door meeting, a large number of countries still did not take a position on whether to quit. Some raised legal questions about the options being considered by the EU. Those options include a clean exit of all EU countries, or an EU exit that would allow some EU countries to stay in the treaty.
Denmark said on Thursday it would work to find a solution that meant the reforms to modernise the treaty could be adopted, for the sake of countries that plan to stay part of it.
An EU exit would require support from at least 15 EU countries and the European Parliament, which has already backed a resolution calling for the idea. EU country diplomats are due to meet next week to discuss their next steps.
(Reporting by Louise Breusch Rasmussen, Nikolaj Skydsgaard Editing by Terje Solsvik and Mark Potter)
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