A House of Commons Library Briefing Paper discussing key energy and climate change policy in the UK, the status of related Brexit negotiations and the possible impact of Brexit on these policy areas, including in relation to a no deal scenario.

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Brexit and energy

Although Member States remain ultimately responsible for the energy supply to their citizens, and for deciding on the most appropriate energy mix, the UK and EU energy sectors are integrated through trade, legislation, and interconnection of energy supply, as well as sharing joint research and development aims. 

European Atomic Energy Community – Euratom

The Government has said that the UK will leave Euratom as part of its departure from the EU. Leaving Euratom has the potential to impact the UK’s current nuclear operations, including fuel supply, waste management, cooperation with other nuclear states, supply of medical radioisotopes, and nuclear research.

The Government has consistently said it wants a “close association” with Euratom and the November 2018 political declaration notes the parties’ intention to cooperate on issues such as research and radioisotope supply. The Government has already legislated to replicate Euratom’s nuclear safeguards regime and negotiated agreements for nuclear trade with certain countries. More information is available in the Library paper on Euratom.

EU internal energy market (IEM)

The UK has five electricity interconnectors with continental Europe and the island of Ireland and more are either under construction or planned. The UK is currently a member of the EU internal energy market (IEM) which allows harmonised, tariff-free trading of gas and electricity across Europe through interconnectors.

The UK Government has said it wants to “explore” options for the future relationship of the UK with the IEM but is not committed to trying to retain membership of the market. Leaving could impact the efficiency of trading over interconnectors, potentially leading to higher costs.  

Northern Ireland

The island of Ireland has operated a Single Electricity Market (SEM) for many years which allows free trade of power across the island. A new Integrated Single Electricity Market designed closely around the rules of the IEM, was launched in 2018. Leaving the IEM could result in the Irish market becoming less integrated with the EU market: making trading on the SEM less efficient. In the longer term, regulatory divergence could be problematic for the continued functioning of the SEM. The UK Government have said it is committed to the continuing functioning of the SEM.

Brexit and climate change

The UK Government has repeatedly confirmed its commitment to domestic and international efforts to tackle climate change, neither of which will be substantially impacted by Brexit. However, the level of the UK’s involvement or future cooperation with EU climate change efforts, in particular the EU emissions trading system, remains subject to ongoing negotiation. In a no deal scenario, the UK would not remain part of the EU ETS and the Government has put in place legislation for a carbon tax to continue carbon pricing in the short term. In the longer term, in a May 2019 consultation, the UK Government and the devolved Administrations stated that securing an agreement with the EU for a linked UK emissions trading scheme is their preferred option for the future of carbon pricing after Brexit. However, this requires agreement from the EU and therefore several alternative options are being consulted on and considered.  

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