Guidance

Gas markets 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 gas market

If the UK leaves the EU without a deal, the mechanisms of cross-border trade for gas are not expected to fundamentally change.

National Grid (Great Britain’s Transmission System Operator), Premier Transmission Limited (Northern Ireland’s Transmission System Operator) and the UK’s interconnector operators currently use the PRISMA gas capacity trading platform to allocate capacity at interconnection points. National Grid and Premier Transmission Limited are both PRISMA shareholders and currently hold commercial contracts for PRISMA’s services; their intention is to continue using the PRISMA platform. In the UK there are no planned changes to either trading arrangements or the approval processes or requirements for access rules.

Interconnector operators will need to work with the relevant EU national regulators (in Ireland, the Netherlands, or Belgium) to confirm whether those countries will continue to use the Capacity Allocation Mechanisms Code as the basis for their trading with the UK and understand any requirements for the reassessment of their access rules. Ofgem and the Utility Regulator for Northern Ireland will support the interconnectors in this process.

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.

The majority of the existing REMIT regime will be maintained domestically with minimal changes. Read the open letter from Ofgem for market participants and information on trading gas 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 ETS should 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.

In 2018, to make sure your compliance obligations will not be affected, the government brought forward the 2018 compliance year deadline. This has subsequently been subject to a further change. Operators must report their 2018 emissions and surrender allowances for those emissions on 11 March 2019 and 26 March 2019 respectively.

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

  1. 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.

  2. Decide if you want to hire an import-export agent, or make the declarations yourself.

  3. 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.

Preparing for changes to import tariffs

If the UK leaves the EU without a deal, the UK would implement a temporary tariff regime. This would apply for up to 12 months while a full consultation, and review on a permanent approach, is undertaken.

Under the temporary tariff regime the majority of UK imports would be tariff-free.

In certain sectors, tariffs would be maintained to support the most sensitive agricultural industries, the automotive sector, vulnerable industries exposed to unfair global competition, and to maintain the UK government’s commitment to developing countries.

Check the temporary rates of customs duty on imports after EU Exit.

Regulation and standards

Importing or using chemicals

If you use or import chemicals then you will need to check whether you have new obligations under UK REACH (the Registration, Evaluation, Authorisation and Restriction of Chemicals Regulation).

For example, if you currently purchase a chemical substance directly from an EU/EEA supplier, you must make sure any substances you purchase are covered by a valid UK REACH registration by someone within your supply chain. Otherwise, in order to remain compliant you will need to register as an ‘importer’. To do so, you must:

  • open an account on REACH IT once it is established and provide initial information on your registration within 180 days of the UK leaving the EU
  • provide full technical information on your registration within 2 years of the UK leaving the EU.

Read the guidance on regulating chemicals if the UK leaves the EU without a deal and the chemical regulation guidance from HSE.

Ensure you can continue to manufacture and export chemical products

There may also be new actions you need to take if you manufacture or export chemicals. Further information is provided on the HSE website.

Your employees

Employing EU workers

If the UK leaves the EU without a deal, EU citizens who are resident in the UK before 29 March 2019 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.

Personal data

Data protection

Your business will need to make sure it follows data protection law if the UK leaves the EU on 29 March 2019 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.

Trade associations

Oil and Gas UK
Energy UK

Published 12 February 2019