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Energy sector calls for 'comprehensive relationship' on energy trading and climate policy post-Brexit

Image: Getty.

Image: Getty.

Continued cooperation on energy trading and climate policy should be included in any final Brexit deal between the UK and the European Union, according to trade bodies from both sides of the channel.

Leading figures from across the UK and Europe’s main renewable and energy trade bodies have written to the EU’s chief negotiator Michel Barnier and the secretary of state for the Department for Exiting the EU, Dominic Raab, to press for an agreement.

The letter points to the long history of cooperation between European countries on energy which has “enabled available resources and capacity to be shared across borders to reduce costs, improve security of supply, better integrate renewable energy and achieve climate change targets”.

This, the signatories state, will need to be a significant feature in the UK’s future relationship with the EU. They are therefore calling for a comprehensive energy and climate chapter to be part of the future Free Trade Agreement to give certainty to business and citizens of both the UK and EU.

In the suggested text, energy trading and climate policy are placed front and centre as these have yet to be determined under public discussions.

In a previous letter signed by a group of energy investors, trade associations and private businesses, Energy UK – whose chief executive Lawrence Slade signed this week’s letter - called for a ‘comprehensive Climate and Energy Chapter’ to be included in talks to address this issue.

It cited concerns that a ‘conventional’ EU Free Trade Agreement would not be able to address climate issues such as cooperation on emission targets, clean energy projects of common interest, climate and energy diplomacy and carbon pricing.

An agreement that no tariffs on energy trading or efficient trading arrangements across interconnectors are introduced was also suggested, as to not do so would for example put Ireland’s recently launched integrated single electricity market (I-SEM) at risk.

If no such agreement were made, the UK’s future participation in shared balancing services, such as the TERRE initiative, would also be in question owing to the country’s potential exit from the EU’s Internal Energy Market.

A position paper released in July sought to allay many of these fears, saying “good progress” had been made towards “broad cooperation” on a range of issues.

Meanwhile, a climate policy agreement would also help to avoid what has previously been called a ‘race to the bottom’ in environmental standards, particularly relevant this week which has seen the EU confirm new regulations on renewable energy and energy efficiency.

Environmental and climate policy have been at the heart of the EU’s position since Article 50 was triggered in March 2017, kick starting the UK’s exit. A leaked draft motion released at the time stated: “Any future agreement between the European Union and the United Kingdom is conditional on the United Kingdom’s continued adherence to the standards provided by the Union’s legislation and policies, in among others the fields of environment, climate change…”

“It is vital that energy be part of the UK’s future relationship with the EU in order to continue to drive progress towards cost-effective decarbonisation through low carbon investment and deliver the best outcome for UK and EU energy customers,” Slade commented.

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