UK and European energy and climate change policy and politics has changed significantly over the past few years. In this paper, we present three scenarios for how UK policy, and its relationship with the European Union, might evolve between now and 2035. We do so whilst considering rapidly changing energy contexts at a time when urgent climate action is required.
The UK-EU Trade & Cooperation Agreement (TCA) was finally agreed in December 2020 and as far as the majority of the general public, and many working on policy, are concerned the relationship between the EU and the UK is now largely agreed. However, there are multiple areas of challenge remaining, some of which are highly contested and may have implications for other issues and sectors as the political dynamic continues to unfold.
Time will show the extent to which the EU and UK’s energy and climate actions diverge as they both seek to enhance their energy security, meet their decarbonisation objectives and ensure affordable energy to consumers and industry. Events, external to energy and climate, are as likely to be causes of divergence between the EU and UK as Brexit issues themselves.
Energy has risen up the political agenda and energy and climate, access and affordability are likely to be key topics for several years to come. Clear fault-lines between the EU and UK may develop, especially with Prime Minister Truss’s new pro-oil and gas development and shale gas proposals. Furthermore, the different approaches on windfall taxes for the energy industry, to help pay for government market interventions may affect cross border activities. Currently, energy security concerns, driven by the invasion of Ukraine, will affect relations and whatever unfolds this winter will be critical for future international co-operation.
Maintaining an entente cordiale with France and the wider EU on energy is not only essential for ensuring UK supply but offers an opportunity to demonstrate the mutually beneficial value of greater co-operation. In that respect, president Macron’s recent comments on Truss’s election may be encouraging. Political rapprochement from both sides will be essential in paving the way for solving issues such as optimising the gas and electricity infrastructure, which is largely owned by private companies. Realising this, to their mutual benefit, will require careful advanced planning.
In September 2022, members of the North Seas Energy Cooperation (NSEC), a group of eight EU countries and Norway, announced ambitious new aggregate targets of reaching at least 260 GW of offshore wind energy by 2050. Following the completion of the report, at the European Political Community in Prague, it was announced that the UK was to sign a memorandum of understanding with the NSEC, in effect rejoining, although it cannot be a formal member unless it signs up to internal market rules. North Sea cooperation was identified during our workshops as an important step in ensuring the maintenance of good EU-UK energy and climate relationships and a significant aid to meeting necessary offshore wind targets.
The war has also highlighted the importance of and reliance on global co-operation, with the EU looking to diversify its sources of LNG. However, the EU re-directing its supply has implications for other countries, with Bangladesh, Pakistan and India, for example, being forced to burn more coal to replace LNG supplies destined for Asian markets but instead sent to Europe as prices were higher there.
The EU and UK co-operated effectively during the joint (Italian and UK) presidency of COP26 and both raised their 2030 carbon reduction targets. Ambitious targets should, despite separate Emissions Trading Systems, maintain closely aligned climate change policies, as long as both parties keep to and then meet their targets. Although the direction of travel for the EU is clearer with the RePowerEU plan proposing an acceleration of renewable energy deployment and increased energy efficiency and saving, the UK is now relatively less committed to delivering in either of these energy security and decarbonisation policy areas.