The Confederation of British Industry (CBI) has launched its ‘Smooth Operations’ document, which includes recommendations for the UK government to closely align with EU rules on energy and climate change during the Brexit transition period and beyond in the “clear interest” of both UK and European businesses.

Based on “thousands of conversations” with UK businesses and trade associations, CBI’s report sets out the key “rules that will matter after the transition period”, covering 23 sectors of the UK economy.  
The reports authors argue that UK and EU’s shared goal of securing an affordable and clean energy supply will be best served by continued close co-operation on energy and climate matters.

The reports sets out the key post-Brexit regulatory asks relating to the energy sector, including barrier-free trade access and appropriate regulatory convergence with the EU’s Internal Energy Market in a bid “to ensure the UK and the EU can continue to trade effectively”.

It added the UK would benefit from ongoing influence within key EU energy and environmental agencies and bodies in order to help both sides manage regulatory alignment. In particular it urged the government to ensure the UK maintained the benefits of Euratom membership – the nuclear safety body – either through continued membership or new arrangements.

Moreover, full participation in the EU’s Emissions Trading System (ETS) should be maintained until the end of 2020 “with at least equivalence thereafter” in order to help the UK’s efforts to decarbonise, the CBI said.

It also argued a bespoke solution to preserve the single electricity market across the island of Ireland would be “critical” to protect the interests of business and consumers in the Republic of Ireland, Northern Ireland, and the rest of Great Britain.

Neil Carberry, CBI managing director of infrastructure and people, said the report provided “unparalleled evidence” from businesses’ experience that will help inform decisions during Brexit negotiations.

“In a rapidly changing world, a close relationship between the UK and the EU on energy objectives is in the clear interests of both sides,” Carberry said. “Alignment with EU energy and climate change rules will help achieve secure, an affordable and low-carbon energy supply for customers, as well as help the sector, which supports one in forty-eight jobs across the UK.”

While the report also sets out opportunities for British business from potential regulatory rule changes after Brexit, it adds that overall opportunities for divergence are “vastly outweighed by the costs of deviating from rules necessary to ensure smooth access to the EU market”.

Moreover, it finds that changes to rules in one sector could have significant knock-on effects for companies in other sectors and throughout supply chains.

Lawrence Slade, chief executive of trade body Energy UK, said maintaining a close trading relationship with the EU on energy was “essential” for UK customers and businesses.