Energy companies have called for the industry’s regulatory framework to stick closely to the EU’s.
In a new paper, launched at a seminar on Friday about future UK-Irish energy relationships, Energy UK sets out its wish list for the upcoming trade negotiations between the EU and the UK.
The Cabinet’s Brexit committee is due to meet this week to hammer out the UK government’s negotiating position in the talks, with heavy pressure from pro-leave ministers and MPs to veer away from alignment with EU regulations.
The Energy UK paper calls for:
*maintaining a close trade relationship through regulatory alignment with the Internal Energy Market (IEM)
*maintaining the Single Energy Market on the island of Ireland
*continued close work with the EU on tackling climate change
The paper says it is ‘crucial’ that any future agreement between the EU and the UK includes a ‘full and comprehensive energy and climate chapter’ which preserves existing ‘close cooperation and collaboration’.
In order to avoid disruption to energy trade arrangements, it urges the UK to continue to abide by EU IEM rules in any transition period following Brexit in March 2019.
It says: “To avoid a cliff-edge situation we should agree to IEM rules to energy interconnection and trade after exit day during the transition period and keep the current terms that allow for the UK participation in the EU Emissions Trading System (ETS).”
The paper also says the UK should seek to continue to input into EU energy policy and regulation by retaining its participation in European regulatory bodies, such as the European Network of Transmission System Operators for electricity (ENTSO-E).
And the paper warns that a UK exit from the EU’s emission trading system could lead to watering down of action to tackle greenhouse gas emissions.
“Without the UK at the table, pressure to strengthen the price of CO2 allowances might reduce to the detriment of global action on climate change.”
Energy UK proposes that the UK should seek to remain a part of the ETS until at least 2020, when the current phase ends, and preferably longer.
It recommends that the best option for the industry would be to remain part of the ETS following Brexit.
The next best option, it says, is for the UK to create its own regime mirroring the ETS, but warns that achieving this by 2020 will be a ‘challenge’.
“The UK’s participation in, or close links to, the IEM and the EU ETS will help both the EU and the UK stay on track to deliver their long term vision on energy and climate.”
And the paper proposes that the UK should aim to ensure that any future framework governing nuclear trade to replace the existing Euratom treaty, should be ‘more ambitious’ than the EU’s existing agreements with other third party countries.
Lawrence Slade, chief executive of Energy UK, said: “In order to keep costs down for UK customers and businesses, maintain security of supply and meet our climate targets, it will be essential for the future EU-UK agreement to have a comprehensive energy and climate chapter and that we have participation in the Internal Energy Market.
“We will continue to work with all stakeholders in the UK and the EU to help shape our future energy relationship with the EU to ensure a successful outcome.”