European Union: Environmental And Climate Change Laws – Divergence Or More Of The Same?

Last Updated: 31 March 2017
Article by Matthew Townsend and Claudia Watkins

The United Kingdom's referendum vote to leave the European Union on 23 June 2016 has raised questions about the future direction of environmental and climate change policies in the UK. In the near term it is business as usual. The long-term picture looks far less clear.

Issue in focus

Businesses across Europe are subject to a wide range of environmental, climate change and product-related laws. These take the form of EU Directives (requiring implementation by each Member State), Regulations (which are directly applicable) and national-level rules. A significant amount of soft law also exists in the form of EU and/or national-level guidance. The precise form of the legislation very much depends on the policy area. The key point, however, is that over the last two decades, by far the majority of UK environmental and climate change policy law has been driven by the EU.

How the UK will disentangle itself from this picture raises both questions of substance (how far does the UK Government and Parliament wish to continue to follow EU policy initiatives in this area?) and form (what steps would need to be taken now even to maintain the status quo?). Similarly, the form of the UK's post-Brexit arrangements with Europe, including the type of trade deal(s) the UK is able to strike with the EU after a Brexit will affect the approach to adopting EU legislation on the environment and climate change. Those who thought that a Brexit would lead to significant de-regulation in these areas may be sorely disappointed; although there clearly will be voices calling for a lighter touch regulatory regime in the UK.

In this early post-Referendum period, it is not yet clear what the Government's position on the environment and climate change agenda will be. However, now is a good time to consider the impact of any potential changes so that strategic planning can begin.

This article is one of a series of specialist Allen & Overy papers on Brexit. To read these papers as they become available, please visit www.allenovery.com/brexit.

Key considerations and analysis

After Brexit what (if anything) would replace European-derived environmental, climate change and product regulatory laws?

Precisely how the UK would achieve an orderly exit from the EU partly depends upon the trade settlement (if any) agreed between the UK and the EU following a Brexit (see below for further discussion of the EEA/EFTA and free trade agreements) and also upon the basis of the domestic law currently in place. In certain areas, it may be possible for national laws implementing EU Directives to remain in place. In this regard, very little may need to change as a result of a Brexit.

An example of this is the UK's environmental permitting regime. Here, the UK Government has implemented national-level laws and brought a variety of industrial processes within the environmental permitting regime simply by referring to the Directives covering these processes (all dealt with under the Environmental Permitting Regulations). As a result, EU-derived technical standards (BREFs), which are a critical factor in permitting decisions, apply to a large number of processes in the UK.

At one level, the legal framework for the permitting of installations could remain largely intact. However, the UK will have to consider how to deal with the detailed European technical standards which underpin much of the regime Any divergence from EU standards would require a new set of national rules to be developed (potentially with certain rules covering a transitional period) to support regulators making permitting decisions. This issue comes into sharper focus given the UK's difficulties in implementing several key Directives on industrial emissions and cleaner air.

A significant number of the UK's environmental laws (producer responsibility, waste and environmental liability are just some examples) are derived from Directives and based upon European environmental policy. It remains an open question as to whether much of this will (or even can) be left in place. In a number of these areas, it is difficult to see any UK Government taking a radically different policy approach than that set out by the European Commission. This is the logical starting point with changes being implemented over time to adapt existing laws to any divergent UK policy which may emerge in the future.

The position as regards EU-level Regulations is more nuanced. In this case, we have directly applicable laws together with EU, and typically Member State level, guidance. The REACH regime on chemicals is a good example of some of the questions Brexit poses.

REACH is one of the most complex pieces of European product law adopted in the last decade. It is contained within a detailed and directly applicable EU Regulation. There is also a significant amount of soft law (in the form of guidance) issued by the European Chemicals Agency (ECHA). In general terms, the UK has a choice between implementing a mirror regime (a significant undertaking particularly for the designated UK regulators) or perhaps adopting an equivalent regime (the Norwegian model) or decide to drop the regime entirely. This will be directly influenced by the terms of any trade deal(s) agreed with the EU post-Brexit and it is difficult to predict, at this stage, what shape any such deal(s) may take.

Even though REACH is just one of numerous environmental regulations affecting industry, there will be many strong voices in the UK's chemical industry calling for this to be an area of de-regulation and the regime to be left behind. However, even if the UK decided not to replicate the regime, UK-based manufacturers and sellers of chemicals will find that they cannot market their products in the EU without, at the very least, obtaining a registration from ECHA which will essentially passport the product throughout the EU. Given that many manufacturers will already have the registrations, there is a question about the status of such registrations after Brexit. Will there be transitional arrangements so as to grandfather these registrations? If they are to be grandfathered, then surely the product must continue to comply with the technical standards and requirements of REACH?

The key point is that, if UK-based exporters wanted to see their products in the EU, they would have to comply with many of the product-related laws and standards that currently exist and will, in the future, be imposed. This is precisely the dilemma that countries such as South Korea and China found themselves in. Given that Europe is a key market for electronic products, Asian exporters have had to ensure that their products complied with national laws implementing the RoHS Directive which limited the content of certain hazardous substances in electronic equipment. This has led to countries adopting their own RoHS equivalent regimes so as to drive compatibility. The UK would likely have to take the same approach. Similar issues arise in the case of markets for exported waste products such as recyclables. After Brexit, these products would still have to meet certain common standards and trades would have to be regulated under WTO or other treaty arrangements.

What approach will the UK Government take to climate change policy?

There are no signs as yet that the current Government will take a different path from the EU on climate change policies. The UK has for many years seen itself as a leader in climate change initiatives and has introduced much of its own domestic legislation in addition to EU laws. For example, the UK has enshrined its own greenhouse gas reduction targets in the Climate Change Act and has shown its commitment to these targets through its' recently issued Fifth Carbon Budget, which aims to reduce carbon emissions by 57% against 1990 levels by 2032. It is understood that the Government has committed to publishing before the end of the year the plans to meet this target. The UK is also a separate signatory to key international climate change Conventions (including the most recent Paris Agreement).

The UK was one of the first EU countries to develop its own Emissions Trading Scheme, which heavily influenced the EU model. It has introduced a raft of climate change and energy efficiency-related legislation over the past decade, including introducing a Carbon Floor Price to incentivise a low carbon energy market. The Government has committed to setting the long-term direction of the Carbon Price Floor in the 2016 Autumn Statement.

However, there are questions on how the UK can continue to meet future climate change obligations: whether it will (or will be able to) do so alongside the EU bloc and possibly retain (or not) its share of the EU's reduction burden. Indeed, its future role within the EU Emissions Trading Scheme (EU ETS) is far from clear. Will the UK need, for instance, a bilateral agreement to link any UK specific scheme that may be put in place with the EU ETS or will it push to remain a participant in the European scheme (assuming the latter was even possible)? Participation in the EU ETS requires close co-operation with the EU and experience with alternative arrangements (such as that between Norway or Switzerland and the EU) suggest that compatibility issues drive convergence between the schemes.

Whatever the legal mechanics, climate policy is certainly an area where we can expect there to be calls from some sides for a retrenchment of policy and the adoption of a more tailored UK approach. It is, however, difficult to see any UK Government diverging significantly from the approach of the last decade.

Would international conventions provide an adequate basis for regulation of environmental and climate change issues in the UK ?

On their own, probably not. The EU and the UK are both separate signatories to a number of major international conventions, particularly on environmental issues such as air and water quality, biodiversity, marine protection, hazardous substances and on nuclear energy. Many EU environmental rules are, themselves, based on key obligations under international conventions.

However, to look exclusively to international conventions alone will likely be an insufficient basis for a UK approach. This is partly because there are significant areas of law which are largely untouched by conventions (e.g. waste management) and because certain key conventions (e.g. those on chemicals) are implemented in the UK via EU Regulations. These directly applicable Regulations will fall away (in the absence of any transitional provisions) once the UK leaves the EU.. So, even allowing for the UK's historically proactive stance on signing up to many of the key conventions, there are areas where fresh legislation would be required post-Brexit and in the event of any subsequent repeal of EU-derived laws.

Another potential issue is whether the UK will wish to negotiate as an independent party to the conventions. The future relationship with the EU may be such that the UK is, in any event, required to follow the EU position in these negotiations (for instance, under the EEA model)

How would membership of the EEA/EFTA or a bilateral trade agreement affect environmental laws in the UK?

If the UK seeks to participate as an independent member of the EEA/EFTA (for which approval would be required from the other members of these groups), there may in practice be little change to the legal landscape.

As a member of the EEA, most of the EU rules on environment, climate change and product regulation which currently apply to the UK would continue to apply. However, as a non-EU member of the EEA, the UK would not be permitted to participate directly in any of the EU law and policy making institutions (such as the EU Commission and Parliament). Many would regard this as a more damaging position than the UK is in today.

There is clearly a much greater risk of divergence in the event that the UK does not follow the EEA route. This will also bring with it greater political risk as successive UK Government (and the devolved administrations of Scotland and Wales) seek to put their stamp on environmental and climate policy.

Would the UK continue to be bound by decisions of the Court of Justice of the EU (CJEU)?

There exists a significant body of environmental law which emanates from decisions of the CJEU. This has developed in three main ways: first, as a consequence of the mechanism by which national courts can refer questions of legal interpretation to the CJEU (with the result binding the referring court); second, the fact that the English courts must interpret English law in the light of EU law; and third, individuals can rely on directly effective rules to assert their rights in national courts.

An obvious example of the influence of the CJEU is in the area of waste law where the legal debate continues as

to how best to distinguish between waste and products. CJEU judgments often have immediate and direct implications for businesses across a wide range of sectors. In this regard, a Brexit raises two immediate questions. How would UK regulators respond to decisions of the CJEU and would the UK Courts be bound (in law or practice) to follow CJEU decisions? Again, the answer may depend on the form of the future relationship between the UK and the EU (for example, an EEA/EFTA arrangement requires CJEU judgments to be followed). In addition, it is difficult to perceive how the UK could follow many of the EU's environmental policy and legal developments without also following and applying the judgments of the European courts.

What about the devolved administrations?

Environmental law is one of the areas devolved to the regional administrations of Scotland, Wales and Northern Ireland. The push for greater devolution, particularly in Scotland, looks set to continue. Brexit raises some important questions within this context. It is conceivable that we will see some significant divergence in environmental policy and laws between the devolved administrations and England. For businesses operating in the UK, this will merely serve to add to their regulatory burden.

What does this mean for you?

At this stage, there are still more questions than answers and this will continue to be the case for some time.

Given the importance of the EU as an export market for UK-based businesses it's clear that , exporters will still need to comply with many of the European rules in order to gain access to the EU market. In this regard, even if Brexit leads to some de-regulation on environmental, product and climate-related policies, there may be sound commercial reasons for businesses to comply with certain EU standards and requirements. However, in many areas little may change aside from the legal architecture. Much will also depend on the terms of any trade deal(s) the UK negotiates with the EU and other countries. As we have witnessed in the context of the negotiations on the Transatlantic Trade and Investment Partnership, environmental and sustainability issues are likely to feature in any new deals and prove a challenging area to settle. It's difficult to imagine the EU accepting a watering down of key environmental principles as part of any such deal.

Given the level of uncertainty, now is the time to start assessing the impact of Brexit in its potential forms on your business and how you can mitigate the risks. These issues will be most acute for UK-based exporters into Europe where you have, to date, needed to comply with broadly consistent rules and standards which effectively passport your products throughout the EU. Divergent environmental rules and new terms of trade as between the UK and EU (amongst other trading blocs) clearly have the potential to disrupt your business. Now is also a good time to engage with your trade associations to bring key issues to the attention of those charged with negotiating the new relationship between the UK and EU.

As the picture becomes clearer, we will update the issues in this paper and we would welcome your comments and questions in the meantime.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.