Government declares intent to keep UK linked to EU ETS post Brexit

The UK would remain linked into the EU Emission Trading System (ETS) under the blueprint on future post-Brexit cooperation published last night.

The political declaration, laying out the proposed future relationship between the EU and the UK was published alongside the draft withdrawal agreement, which has already sparked the resignation of two cabinet ministers today.

The declaration states that the new framework will consider cooperation on carbon pricing by “linking a United Kingdom national greenhouse gas emission trading system” with the EU ETS.

And it says the framework for the EU-UK relationship will “facilitate” technical cooperation between electricity and gas networks operators as well as the organisations planning and using interconnectors in order to maintain secure supplies and efficient trade.

The framework also includes a “wide-ranging” nuclear cooperation agreement between the UK and the Euratom underpinned by a commitment to high standards of nuclear safety and “timely” reassessment of approvals of contracts for the supply of nuclear materials.

Anthony Froggatt, a senior research fellow in energy and environmental issues at the security thinktank Chatham House, said that the document looked set to deliver a similar emissions trading arrangement to that already existing between the EU and Switzerland.

Under this arrangement, Switzerland mirrors the price of carbon set by the EU ETS.

“If we assume there is a transition agreement, we would have a domestic system linked to the ETS,” he said.

The withdrawal agreement also contains a host of provisions designed to bind Northern Ireland into the EU’s broader regulatory framework in order to maintain the all-island single electricity market following Brexit.

Lawrence Slade, chief executive of Energy UK, welcomed the “significant progress” towards delivering a withdrawal agreement that would avoid the “cliff-edge scenario which would be so damaging for the energy sector and its customers.”

He said: “While there is clearly still much work to be done, it is a positive development to see energy included in the outline political declaration, and we recognise the hard work that has gone into ensuring energy is a key part of the future EU-UK relationship.

“It is critical we ensure the smooth functioning of markets and the continued free flow of energy and cooperation on tacking climate change, in order to benefit our environment and keep bills down for UK customers and businesses.  We therefore welcome the progress made and will continue to work with the government to ensure the best Brexit deal for the energy sector, our economy and the environment.”

However the prospects of the withdrawal agreement failing to secure majority support in the House of Commons increased this morning following the resignation of Dominic Raab and Esther McVey, respectively the secretaries of state for exiting the EU and work and pensions.

Yesterday, the House of Lords EU Environment and Energy Sub-Committee published a correspondence with energy minister Claire Perry concerning the risks of a no-deal Brexit.

The letter from the committee’s chair Lord Teverson, which follows its cross-examination of energy minister Claire Perry on no-deal preparations last month, flags up a series of concerns.

These include the rate mooted for the proposed carbon emissions tax in last month’s budget and the UK government’s “disregard” for objections to it by the Scottish and Welsh governments.

The Lib Dem peer also expressed concern that the government has not assessed the impact of withdrawal from the EU’s internal energy market on the price paid by consumers.