The Danish government is working towards exiting the Energy Charter Treaty (ECT), the country’s energy ministry said on Thursday as growing dissatisfaction with the agreement in Europe casts doubt over its future.
“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.
While the treaty also covers green investments, other legal frameworks ensure investors can safely invest in green projects in Denmark and elsewhere, he added.
The 1998 treaty was designed to protect companies in the energy industry by allowing them to sue governments on policies affecting their investments, but has in recent years been used to challenge policies that require fossil fuel plants to shut.
France, Germany, the Netherlands, Poland and Spain have already announced plans to quit the treaty, increasing pressure on Brussels to coordinate an EU-wide withdrawal.