On 29 March 2017, the UK Government served formal notice under Article 50 of The Treaty on European Union to terminate the UK's membership of the EU (following the June 2016 UK referendum on EU membership). Based on Article 50, the EU Treaties shall cease to apply to the UK and the UK exit will take effect in March 2019 (subject to the unlikely possibility of the withdrawal agreement being concluded sooner and unless all Member States agree to extend the period). Negotiation of a new trade agreement with the EU could take several years beyond 2019 although the Prime Minister has declared the objective of achieving such an agreement within the two-year period.
This briefing note anticipates how Brexit may impact on the area of environmental law. The legal consequences are complicated, especially in this area as many principles and obligations in our national law stem from EU legislation. UK Government has indicated that it will freeze into UK law the EU legislation in force at the point of the UK's exit to ensure continuity, but may choose to amend such law in due course.
Practical steps to take right now
Even though notice has been given to terminate the UK's EU membership, we do not know the precise nature of the UK-EU relationship after a Brexit. However, it is possible to speculate a little about how a general Brexit might affect our national, environmental legal regime and consider what practical changes may result. We do not consider here the impact on other countries, in particular those remaining in the EU, but the International Environment Team here at Bird & Bird is ready to answer any such queries. We also address only those environmental laws that are most relevant to our clients generally, and so do not consider here the impact on (amongst others) air quality, agriculture, fisheries and habitats legislation. Certainly, a key recommendation is that clients assess what environmental laws they are currently obliged to comply with and then analyse whether those obligations encompass operators and markets outside of the UK (for example, the EU Emissions Trading System ("EU ETS") and producer responsibility regulation, such as RoHS and REACH. It will then be necessary to consider how the obligations are actually implemented into UK law and how European interplay may be affected as a result of a Brexit.
Climate change regulation
The UK government has its own legally-binding climate change (emission reduction) targets, through the Climate Change Act 2008, and its own carbon reduction schemes, such as the climate change levy and CRC Energy Efficiency Scheme – it is generally considered that these are unlikely to change after Brexit. Likewise, whilst the EU Emissions Trading System raises some questions, for example, on issues such as the validity of EU ETS allowances when the UK leaves the EU, given our own national implementation measures and associated compensation schemes, it seems more likely than not that the UK will continue with some form of emissions trading scheme after Brexit occurs, whether that be the EU ETS or a national scheme linked to the European one.
There are also questions over the UK’s international obligations, including the UK's commitment to the UN Framework Convention on Climate Change and recent Paris Agreement (as this is currently caught within the EU's commitment) – a particular concern here is the reduction in influence that the UK would have over international climate change negotiations and agreement.
Finally, whilst EU legislation, such as the Renewable Energy Directive, has undeniably driven an increase in renewable generation in the UK, other national and international obligations (see above) mean low carbon generation should form part of the UK government's future policy – it is just difficult to speculate what part renewables will play in that.
EU legislation is prominent in this sector. Recycling targets, the waste hierarchy and definition of waste are all derived from EU legislation and policy. The UK's waste management sector is strong (including significant exports of recyclate to other Member States). It might be assumed that the UK government wishes that to continue and so would not drastically alter waste management law following a Brexit. Questions have however, been raised about compliance with recycling and waste reduction targets in the medium to long-term and this could undermine long-term planning and investment in waste infrastructure. There are also concerns that the Brexit debate and of course a Brexit itself lessens the UK's influence in the EU now, and important policies such as the Circular Economy are being shaped without significant UK input.
Product compliance – REACH, CLP and RoHS
The REACH and Classification, Labelling and Packaging Regulations both have direct effect in the UK (although the Directive restricting hazardous substances has been implemented into national law). Withdrawal from the EU would potentially mean the UK is not legally obliged to adhere to the REACH and CLP Regulations. However, in order to:
- Ensure access for UK exports into the Single Market;
- Meet commercial requirements, such as supply chain obligations; and
- Maintain protection from hazards for end-users,
it is reasonable to speculate that the UK government or industry will ensure continued adherence to the standards and obligations within these regimes (albeit with no ability to input into the future direction of EU regulation on the chemical industry).
Domestic legislation – contaminated land regime
There is some UK environmental legislation that is purely domestic – such as the contaminated land regime in Part 2A of the Environmental Protection Act 1990. It is difficult to see why or how Brexit would lead to any direct change.
There are concerns that a complete Brexit may result in less environmental protection in the UK, in particular that it would allow other economic and competitive arguments to push for precedence over environmental protection and standards, especially in the event of any economic downturn, and it may be politically difficult to resist that pressure. A Brexit would also most likely mean that the UK has less influence in the direction of international agreements and laws. However, a Brexit may allow freedom to adjust environmental legislation to a more UK-specific regime. Even though notice to terminate the UK's EU membership has now been given, we can perhaps only be sure that a Brexit will have a far-reaching and complex effect on our environmental legislation, and that long-term uncertainty does not encourage green investment. We intend to update our guidance in this area as the environmental implications become clearer.
For any general enquiries regarding the issues raised in this briefing or any other environmental or energy management matter, please contact the authors below.
This article is part of our Brexit series.