UK-EU Climate and Energy Relations

Joël Reland; Camilla Born

This report explores the evolving dynamics of climate and energy cooperation between the UK and EU under the Trade and Cooperation Agreement (TCA). It addresses both the opportunities and challenges facing this partnership as the UK navigates its post-Brexit relationship with the EU. Key areas examined include energy security, renewable energy development, emissions trading schemes, and regulatory divergence. The report discusses the current state of energy trading, highlighting inefficiencies that have emerged since the UK left the EU's Internal Energy Market and the potential for improving trade mechanisms to lower energy costs. It also explores the possibility of linking UK and EU emissions trading systems to reduce tariffs and trade frictions under their respective Carbon Border Adjustment Mechanisms (CBAMs). Additionally, the report identifies potential areas for deeper cooperation, such as aligning climate regulations, supply chain security for critical materials, and joint efforts in climate diplomacy. Political dynamics, including the UK’s desire to reset relations with the EU and the European Commission’s call for enhanced energy collaboration, are also considered. The report concludes by highlighting the significance of political commitment on both sides to further advance climate and energy cooperation, particularly as the 2026 expiration of the TCA’s energy chapter approaches.

brexit renewable energy climate policy energy security emissions trading european commission energy cooperation carbon pricing climate diplomacy trade and cooperation agreement uk-eu relations energy trading net zero transition international climate cooperation