Is any new EU legislation expected to come into force and effect before the end of the transition period?
The European Commission published a draft regulation on carbon dioxide (CO2) emissions for heavy duty vehicles on 17 May 2018. This will impose CO2 emission standards for new heavy-duty vehicles for the first time, with reduction targets set for 2025 and 2030. It is not clear when the proposed Regulation will be finalised and come into effect. The reduction targets are set for after the transition period and may be less relevant to the UK as a result.
The European Commission, Parliament and Council reached a political agreement to set a binding renewable energy target for the EU for 2030 of 32%, with a clause for an upwards revision by 2023. This is in conjunction with the Commission’s proposal for a revised Renewable Energy Directive which will replace the Renewable Energy Directive 2009 (Directive 2009/28/EC). It is not clear when this will come into force.
Is a new regulator needed, or do additional powers to be given to an existing regulator?
The European Union (Withdrawal) Act 2018 contains a provision (section 16) to secure environmental protections after Brexit and introduce an environmental watchdog.
The provision gives DEFRA until 26 December 2018 to publish an Environmental Principles and Governance Bill. This will include a set of environmental principles, a policy statement, and provisions to establish an independent environmental watchdog with legal enforcement powers to keep the government in check.
Is there an existing “equivalence” or “recognition” regime for recognising Third Country regulatory regimes?
There is no EU equivalence or recognition regime for environmental law.
Does current UK government policy mean that (subject to the terms of a future trade agreement between the UK and the EU) material changes to regulation or enforcement are likely post-Brexit?
There is speculation amongst some that existing EU legislation transposed into UK domestic law will not be properly updated or subject to proper governance once the UK leaves the EU. In particular, in areas where the UK has struggled to meet certain EU environmental standards, such as air quality, nature protection and treatment of urban waste water, there is a concern that the government may use Brexit as an opportunity to lower these standards.
However, some environmental regimes originated in the UK and it seems likely that the UK will keep the substance of these regimes, such as the regulation of emissions from industrial installations. The current UK government has also committed itself to a 25 Year Environment Plan which sets out detailed targets by which the government will monitor progress towards a better environment, with an emphasis on delivering a “green Brexit.”
Additionally, the EU and the UK are both signatories to areas of law governed by international treaties, which means the UK will remain subject to these international regimes, even it if is no longer bound by EU law (for example, transfrontier shipment of waste and use of HFC refrigerant gas).
What should businesses be doing now to prepare for Brexit?
- Review your compliance strategies to ensure that even if EU environmental standards are lowered in the UK, you continue to comply with certain standards for Europe-bound substances and products.
- If you are entering into contracts which have the potential to be affected by Brexit (that is, contracts that will continue after the transition period ends) you should evaluate the impact of Brexit on those contracts and consider adding provisions that expressly provide for situations in which your ability to perform the contract is affected by Brexit. This exercise should include an evaluation of the impact Brexit might have on your supply chains.
- Utility businesses in particular should keep track of the key EU environmental law which materially impacts their long-term strategy in the UK, including Emission Trading, Environmental Permitting, and Greenhouse Gas Emissions targets to ensure their business plans account for any significant changes going forward.