Iceland's withdrawal from the Energy Charter and investors' challenges
On 11 May 2026, the Ministry of the Environment, Energy and Climate announced that Iceland had formally withdrawn from the Energy Charter Treaty, referring to recent developments whereby the EU and its member states have withdrawn their membership of the Treaty.
The Ministry's announcement states that the decision is made because the agreement no longer coincides with Iceland's policy on energy sovereignty and climate goals.
The press release from the Ministry of the Environment, Energy and Climate can be found here:
This decision of the Icelandic government takes into account views that were first published in an article by Dr. Finnur Magnússon, Supreme Court Attorney and one of the partners of LEX Law Firms, on 10 January 2025, which is titled The Energy Charter Treaty and Re-Assessment of States. The article discussed the major changes that have taken place within the field of international trade and investment in recent years – changes that investors must consider when planning and maintaining their investments.
The article can be found here: https://www.timaritlogrettu.is/selecta/Z4GUBhAAACIAkBff
The article discusses what impact government withdrawals from the Energy Charter Treaty can have on investments that have already been implemented and the need for investors to respond to this policy change in order to secure their investments in the future.
