The electricity sector and preparing for EU Exit
If the UK leaves the EU without a deal, there may be changes that affect your business.
Your business may need to make changes before the UK leaves the EU. Please visit Prepare for EU Exit to find more detailed guidance on policy changes relevant to your sector and to sign up for updates.
Markets and trade
Cross-border trade in the electricity market
If the UK leaves the EU without a deal, cross-border flows across electricity interconnectors will no longer be governed by EU legislation.
Alternative trading arrangements will need to be developed. The government, Ofgem and where appropriate, the Northern Ireland Utility Regulator, are working with interconnectors to ensure new access rules are approved in Great Britain and are providing support to interconnectors engaging with EU member state authorities.
Market participants will need to make use of the alternative arrangements developed for purchase and sale of power cross-border.
UK market participants will need to register under the Regulation on Energy Market Integrity and Transparency (REMIT) with an EU regulatory authority for the purposes of market monitoring to avoid a disruption to cross-border trade or trade within EU wholesale energy markets, or trade within the Single Electricity Market that Northern Ireland shares with Ireland.
The government will take all possible measures to maintain the Single Electricity Market and continue to work with the Irish government and European Commission to seek agreement that the Single Electricity Market will continue. Northern Ireland electricity market participants should continue using the Single Electricity Market processes and arrangements. However, market participants should be aware of the risk that the Single Electricity Market may not be able to continue, in which case government and the Northern Ireland Utility Regulator will take action to seek to ensure continued security of supply and market stability.
The majority of the existing REMIT regime will be maintained domestically with minimal changes. Ofgem published an open letter with steps for market participants in Great Britain to take. Read further guidance on trading electricity if the UK leaves the EU without a deal.
Market participants should check the status of contracts and licences to operate in EU countries which may be impacted by EU member state domestic market access restrictions, to ensure that they are still eligible to undertake their committed activities.
Energy and climate
Participating in the EU Emissions Trading Scheme (EU ETS)
If the UK leaves the EU without a deal, then the EU rules governing the EU ETS would no longer apply to the UK.
Business emissions from 1 January 2019 onwards will no longer be covered by the EU ETS, so UK businesses would no longer need to surrender allowances for these emissions at the end of each year.
However, all stationary installations currently participating in the EU ETSshould continue to comply with the regulations for the monitoring, reporting and verification of greenhouse gases. These regulations will underlie the new UK Carbon Emissions Tax.
The UK Carbon Emissions Tax will be introduced on 1 April 2019 and the reporting period for stationary operators will be 1 April 2019 to 31 December 2019. The 2019 tax will be set at £16 per tonne. Subject to state aid approval, the scheme to compensate energy-intensive industries for the indirect costs of the EU ETS would remain in place to compensate for the indirect emission costs of the new Carbon Emissions Tax.
Accounts administered by the UK in the EU ETS allowance registry and Kyoto Protocol registry will be blocked from the point of the UK leaving the EU. Operators wishing to retain access to their allowances after the withdrawal date should consider opening an account in another member state’s registry for this purpose, and should consider the amount of time this is likely to take. Clean Development Mechanism project developers with a UK Letter of Authority will also need a letter of approval from a different Designated National Authority.
Until further notice, the UK government will not issue or auction any 2019 EU ETS allowances. It remains possible for allowances to be purchased through the European Energy Exchange (EEX) auction platform, and on the secondary market. Operators should consider this when planning to meet 2018 compliance obligations. To make sure your obligations will not be affected, the government brought forward the 2018 compliance year deadlines, published on 7 March 2018. This states that you need to report your 2018 emissions by 11 March 2019, and surrender allowances for those emissions by 15 March 2019.
Carbon Emissions Tax legislation is included in the Finance Bill 2018-19.
Read the guidance on meeting climate change requirements if the UK leaves the EU without a deal and the Carbon Emissions Tax policy paper.
Importing and exporting
Preparing for disruption to trade at the UK-EU border
- Get a UK Economic Operator Registration and Identification (EORI) number so you can continue to import or export goods and apply for authorisations that will make customs processes easier for you.
- Decide if you want to hire an import-export agent, or make the declarations yourself.
- Contact the organisation that moves your goods (for example, a haulage firm) to find out what information they need to make the declarations for your goods, or if you will need to make them yourself.
Read the guidance on simplified customs procedures for trading with the EU if we leave without a deal.
Further information is provided in HMRC’s advice for businesses trading with the EU.
Preparing for changes to existing trade agreements
Check the way you currently trade with non-EU countries. When the UK leaves the EU the way you access existing favourable arrangements with these countries may change. Changes may be different for each country.
Read the guidance on changes to trading with non-EU countries that have a free trade agreement with the EU.
Employing EU workers
If the UK leaves the EU without a deal, EU citizens who are resident in the UK before 29 March 2019 (may also apply to new exit date on 31 December 2020) will be able to apply to the EU Settlement Scheme to get settled or pre-settled status, which will mean they can continue to live, work and study in the UK.
The scheme will be open to applications from 30 March 2019 and EU workers must apply by 31 December 2020 if the UK leaves the EU without a deal.
You can use the EU Settlement Scheme guidance for employers to give further information to your employees.
Applying for skilled-work or unskilled-work visas
If the UK leaves the EU without a deal, there will be a new process for EU citizens arriving in the UK before 31 December 2020. From 1 January 2021, a new skills-based immigration system will launch.
For non-EU nationals, EU Exit will not affect the application process for work visas.
Travelling to the EU
If the UK leaves the EU without a deal, British passport holders travelling to the EU will need to have 6 months remaining validity on their passport, not including any extra months added to a 10 year passport if it was renewed early.
Read guidance about travelling to the EU with a UK passport if the UK leaves the EU without a deal and check your passport to see if you need to renew earlier than planned.
Your business will need to make sure it follows data protection law if the UK leaves the EU on 29 March 2019 (may also apply to new exit date on 31 December 2020) without a deal.
If you operate across the EU or exchange personal data with organisations in the EEA, there may be changes that you need to make before the UK leaves the EU.
Read the 6 step process and the data protection guidance from the Information Commissioner’s Office (ICO).
You can also check if you can use standard contractual clauses (SCCs) for transfers from the EEA to the UK.