A House of Commons Library Briefing Paper discussing key energy and climate change policy in relation to the negotiations on the future relationship between the EU and UK.

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The UK left the European Union (EU) on 31 January 2020. The UK is currently in the transition period as set out in the Withdrawal Agreement, which entered into force with the UK’s departure. Until the transition period ends (expected to be at the end of 2020), the UK will continue to have the same relationship with regards to rules, including on energy and climate change, as when the UK was a Member State of the EU.

This paper sets out the existing relationship between the UK and EU in relation to energy and climate change and the position of both parties regarding these areas in the negotiations for the future relationship.

Energy

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

Civil nuclear – Euratom

The European Atomic Energy Community (Euratom) provides the basis for the regulation of civilian nuclear activity in its members. Euratom’s roles include implementing a system of safeguards to monitor the use of civil nuclear materials, controlling the supply of nuclear materials, and funding research.

The UK left Euratom as part of its departure from the EU, though the arrangements between Euratom and the UK will continue through the transition period. Both the UK Government and EU negotiating directives for the future relationship refer to an intention for “cooperation” on civil nuclear.

The UK 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.

Energy trading

The UK has five electricity interconnectors with continental Europe and the island of Ireland and more are either under construction or planned. As part of the transition period, the UK remains a member of the EU internal energy market (IEM) which allows harmonised, tariff-free trading of gas and electricity across Europe through interconnectors. This harmonised market makes trading more efficient and can reduce costs to consumers.

The future of the UK relationship with the IEM is subject to the negotiations. Both parties have published draft texts detailing provisions on cooperation on trade in electricity and gas. While there are areas of overlap, there are also differences between the positions including on the details of energy trading, membership of bodies, and governance.  

Implications for the island of Ireland

The island of Ireland operates a Single Electricity Market (SEM) which allows free trade of power across the island. A new Integrated Single Electricity Market designed closely around the rules of the IEM, launched in 2018.

Provisions to allow the continued functioning of the SEM were set out in the Protocol on Ireland/Northern Ireland in the Withdrawal Agreement. The UK’s future relationship with the IEM may have an impact on the operation of the SEM as currently the only connections between the island of Ireland and mainland Europe are through interconnectors via Great Britain. The Withdrawal Agreement did not cover trading between the island of Ireland and GB; stakeholders have called for the future relationship negotiations to consider arrangements to facilitate this trading.

Climate change

The UK Government is committed to domestic and international efforts to tackle climate change, neither of which have been impacted by leaving the EU. However, the level of the UK’s involvement, future cooperation and alignment with EU climate change efforts remains subject to ongoing negotiation. As an example, on carbon pricing, the UK Government and devolved Administrations have designed a new UK emissions trading scheme for 2021 onwards, which may or may not be linked to the EU emissions trading scheme. The inclusion of enforceable climate change obligations, including those at an international level such as the Paris Agreement, within the UK-EU trade agreement also remains subject to ongoing negotiations.

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