The trade deal makes way for a joint framework for cooperation on renewable energy and other sustainable practices, as well as the creation of a new model for energy trading. The agreement also sets out how EU and UK air transport operators, road haulage and passenger bus operators will be able to perform services between the EU and the UK as of 1 January 2021.
Climate Change
The fight against climate change constitutes an “essential element” of the EU/UK Trade and Cooperation Agreement. It is the first time the EU has included it as an “essential element” in a bilateral agreement with a third country, meaning that, for example, if the either were to withdraw from the Paris Agreement – or take measures defeating its purpose – the other would have the right to suspend or even terminate part or all of the Agreement.
It also means that for the first time, the fight against climate change is on par with other essential elements, namely democracy, human rights, the rule of law and non-proliferation of weapons of mass destruction.
A strong principle of non-regression, including on carbon pricing, is included in the Agreement, ensuring that – at a minimum – the level of climate protection that had been in place at the end of the transition period will be guaranteed in the future, and will increase over time.
Both the UK and the EU also reaffirmed their ambition to achieve economy-wide climate neutrality by 2050, although the UK will now define its own climate change targets and policies. The UK will no longer be part of the EU's joint action against climate change, and will not receive the financial support enjoyed by EU Member States to develop and deploy low-carbon technologies, or for adaption measures. It will leave the EU’s Emissions Trading Scheme (EU ETS) – the EU’s tool for reducing greenhouse gas emissions – and it will be excluded from its effort-sharing arrangements which allow Member States to share the burden of meeting decarbonisation targets.
The EU and the UK, in recognising that their bilateral trade and investment must take place in a manner conducive to sustainable development, have also agreed to promote trade and investment in green goods, to cooperate bilaterally and at the international level on the sustainability agenda, and to encourage responsible business practices. They have agreed to promote the implementation of the United Nations 2030 Agenda and the United Nations’ Sustainable Development Goals, and to adhere to the implementation of relevant internationally agreed principles, rules and agreements. This includes the United Nations Framework Conventions on Climate Change, and the Paris Agreement.
Energy
While the UK will no longer participate in the EU’s internal energy market, the UK and EU have agreed to establish a new framework for future cooperation in the energy field, ensuring the efficiency of their cross-border trading.
The UK has left the EU’s internal energy market, which ensures the security of supply and free flow of electricity, gas and oil to Member States. The UK is a net importer of energy, with the EU currently providing some 5-10 percent of its electricity supply and 12 percent of its gas needs, which it receives over interconnectors (i.e. cables and pipelines). These are managed between Member States through existing Single Market tools. From 1 January 2021, only Northern Ireland maintains the Single Electricity Market with Ireland and the rest of the UK will have to trade with the EU on third-country terms.
Under the Agreement, the EU and the UK have agreed to establish a new framework for their future cooperation in energy, to ensure the efficiency of their cross-border trading, and to create ‘a robust level playing field’. The Agreement includes provisions guaranteeing non-discriminatory access to energy transport infrastructure and a predictable and efficient use of electricity and gas interconnectors, a new framework for cooperation between transmission system operators and energy regulators, provisions regulating subsidies to the energy sector; and provisions to ensure the security of supply. This is particularly relevant for Ireland, which will remain isolated from the EU internal energy market until new interconnections become operational.
The UK has also left the European Atomic Energy Community. Cooperation on nuclear safety and uses of nuclear energy will be provided for under a separate agreement between Euratom and the UK.
Transport
The UK will no longer benefit from the principle of free movement of goods and people.
The 210 million passengers and 230 million tonnes of cargo transported between the EU and the UK, by air, sea, road and rail can no longer operate freely between and within the Single Market, on the basis of a single licence or authorisation, and without being unduly hindered by border checks and controls.
This means that all transport businesses conducting operations between the EU and the UK now have to ensure compliance with EU and UK certification requirements respectively, and transport operators will be affected by changes in the formalities required when crossing the UK-EU border. The UK will also no longer be a member of the European Union Aviation Safety Agency (EASA), and will have to build up its own capacity for aviation safety purposes.
The Agreement covers the terms and conditions according to which EU and UK air transport operators, road haulage and passenger bus operators, and maritime transport operators will be able to perform services between the EU and the UK as of 1 January 2021. It also specifies the terms and conditions for EU-UK cooperation in the area of aviation safety. It includes provisions to ensure that competition between EU and UK operators takes place on a level playing field, ensuring high levels of transport safety, workers’ and passenger rights, and environmental protection.