In a new paper the UK Government has announced its position on its envisaged future relationship with the EU in the energy sector.
The paper stipulates that the UK would only enter into an energy agreement “if it reflects its interests, and as long as it respects the fact that the UK will make independent decisions on its energy policies”. It goes on to add that any agreement would likely cover trading via interconnectors, carbon pricing and climate change.
In-line with the Government’s wider bargaining position that any agreement would have to be in the UK’s best interests, the report re-iterates that the UK already has a framework in place for electricity and gas interconnectors to continue to operate from 1st January 2021, even if there isn’t a deal in place.
Interestingly, the paper does specify that the UK would be open to aligning the UK’s own carbon trading scheme with the EU ETS, which would seemingly mitigate the risk of a proposed future ‘carbon tax’ on cross-border energy transactions. It also states that any agreement must recognise both parties right to regulate to meet any respective climate goals.
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