What does leaving the EU mean for energy and climate change?

Published: 13th Jul 2016

This briefing is largely based on the briefing by the House of Commons Library ‘EU referendum: impact of an EU exit in key UK policy areas’. The opinions and judgements it contains are theirs. We expect to review and add to these articles periodically as events develop.

The EU’s plan for Energy Union sets a strategy for creating a single market in energy.

The UK has been a strong supporter of similar steps in the past, such as more consistent regulation, so the House of Commons Library suggests that future UK governments are unlikely to want to work against the approach set out by the EU.

The UK’s own targets for cutting carbon emissions are more stringent than EU targets, and will still be legally binding.

The EU has agreed a binding commitment to reduce its emission of greenhouse gases by at least 40% by 2030, compared to the level of emissions in 1990, as part of the United Nations Framework Convention on Climate Change.

The UK Climate Change Act 2008 then set national targets that contribute to meeting the EU’s overall obligation, and which form the basis for regular carbon budgets. These are stricter than required by the EU’s effort sharing decision, and will still be legally binding because they are part of UK law.

Outside the EU, the UK will not be compelled to report on its annual emissions to the EU, or submit plans to the EU for corrective action if it misses its 2020 target for reducing emissions.

The withdrawal process will need to establish the UK’s obligations under international law, separate from the EU.

The UK’s participation in the EU Emissions Trading Scheme, which means companies have to purchase permits to emit greenhouse gases, will be up for negotiation. EU membership isn’t required to be involved - Switzerland is in negotiations to join, as was Australia until it repealed its own carbon pricing system.

The UK may have less influence in international climate change negotiations outside the EU, according to a widely held opinion.

The UK will no longer have to meet EU targets for renewable energy.

The EU’s Renewables Directive requires the UK to get 15% of its energy from renewable sources by 2020.

Last year, the EU predicted that the UK wouldn’t achieve this. The UK has met all of its interim targets so far, but the targets progress faster up to the deadline.

It’s not clear how much will change when these targets disappear.

The UK will no longer face the potential ramifications of not meeting the EU’s targets. The Directive didn’t include a standalone mechanism for punishing countries that fail to follow it, but the EU can take legal action.

The House of Commons library point out that climate change and energy security will still be concerns, so the UK may replace the targets with national ones.

UK power plants won’t be legally bound by EU rules on air pollution.

An EU directive in 2010 lowered the amount of pollutants which can be emitted by new power plants. Older plants have to clean up or close down by 2023.

The UK government could choose to allow longer lifetimes for the UK’s power plants outside the EU, to help safeguard the UK’s energy supply.

EU funding will have to be replaced.

The UK gets £3.5 billion funding from the main EU budget for climate change adaption and a transition to a low carbon economy.

Since the UK is a net contributor to the EU budget, it would theoretically be able to replace this funding using savings on its membership fee.

The UK has also received almost £300 million investment in energy infrastructure projects under the European Energy Programme for Recovery.

The UK is one of the largest stakeholders in the European Investment Bank, which provides loans that go towards energy projects in the UK. The UK’s future relationship with the EIB is not clear.

The UK will have to establish a new relationship with the single market for energy.

How the UK is connected to the single market for energy will be up for negotiation, like other types of trade with the EU.

Energy markets have become more closely integrated under three successive bouts of EU legislation. The UK has been a leader in this process, and a report commissioned under the coalition government found that a large range of respondents within the UK energy sector support greater integration.

Chatham House suggested that since much of the integration involves infrastructure that has already been built, physically disconnecting the UK from European energy markets would be unrealistic.

Countries in the EU negotiate with major energy suppliers as a group, such Russia. Chatham House have suggested that this will provide another motive for the UK to align closely with the EU and to comply with EU regulations. The UK may have less influence over the negotiation process and over how those regulations are set.

The UK and Irish governments have both begun further inquiries.

The Irish energy minister, Denis Naughten, is set to brief EU ministers on the implications for the all-island energy grid later this week.

The House of Commons has begun an inquiry into the implications of leaving the EU for UK climate policy.


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