Markets & Policies

London Fog: The UK leaving Euratom and the Risks of Uncertainty

Following Brexit the UK has expressed the firm intention of leaving Euratom. The heated debate, the risks and the uncertainties that undermine the efficiency and stability of the British (not only) nuclear energy sector.

"UK leaving Euratom"

On 29 March the British Prime Minister Theresa May presented a six-page letter triggering Article 50 of the Treaty of Lisbon. This article gives any EU member state the right to leave the EU unilaterally, it sets out the procedure for doing so and it gives the leaving country two years to negotiate the exit terms.
One of the clauses contained in the Article 50 letter presented by the UK – and largely overlooked at the time – concerned the intention of leaving Euratom, the European Atomic Energy Community, established in 1957 by the Euratom Treaty, to govern the peaceful uses of nuclear technology.

The Role and the Rules of Nuclear Power in Europe

Currently there are 130 nuclear reactors in operation spread across 14 EU countries. Each EU member state is free to decide whether to include nuclear power in its energy mix.
In total, nuclear production accounts for more than a quarter of European electricity generation.

Net Electricity Generation (EU-28 2015)

UK Leaving Euratom
Source: European Commission

Euratom creates a single market for the trade of nuclear materials and technology and ensures the free movement of capital and workers engaged in nuclear facilities and research.
Although EURATOM is a separate entity from the EU, it is governed by European institutions.
The European Commission deals with nuclear activities from three different perspectives:
• Nuclear safety regards the safe operation of nuclear installation, including radiation protection and radioactive waste management.
• Nuclear safeguards are those measures aimed at ensuring that nuclear materials are exclusively used for the purposes declared by the users.
• Nuclear security relates to the physical protection of materials and installations against intentional and malicious acts.

Security of supply of nuclear fuel is guaranteed by the Euratom Supply Agency (ESA) and Euratom falls under the jurisdiction of the European Court of Justice (ECJ).

In this a necessary separation?

London expressing its will to leave Euratom sparked a heated debate on whether or not this is a necessary, or even desirable, outcome.
On the one hand there are those that want to abandon every single piece of legislation giving origin to some sort of EU influence over the UK. The treaties in place would be replaced by bilateral agreements tailored according to a very well thought out cherry picking.
On the other hand there are those that heavily criticize the decision of leaving Euratom. Among them there are even some MPs supportive of the Leave that consider such a development unnecessary and potentially harming.
The Commons Energy Committee urged the UK to delay leaving Euratom, fearful of shortage in power supplies.

Turning at the government for clarifications will easily cause disappointment.
In the explanatory notes of the European Union (Notification of Withdrawal) Act 2017 the UK expressed its intention to leave Euratom, but without clearly specifying the reasons behind this decision.
As previously said, Euratom is deeply embedded in the EU institutional context, it refers to EU member states and there is no membership in Euratom unless coupled with membership in the EU. However, since there are no precedents of a EU member state leaving the Union, there is no clear path to follow with regard to leaving Euratom.
Last October Theresa May in occasion of the Conservative Party conference ensured that “the authority of EU law in this country has ended forever”. As membership in Euratom entails being subject to the ECJ jurisdiction, it is technically not consistent with the intentions strongly voiced by the Prime Minister.
Another element of incompatibility between Euratom and Brexit is the fact that the former guarantees the free movement of individuals involved in nuclear technology and research. Given the Government’s purpose of cutting down immigration drastically, this Euratom requirement might not fit into Westminster’s plans.

What happens if the UK goes solo on nuclear?

It is hard to predict what the consequences of leaving Euratom will be for the UK. However, such decision is unlikely to come with advantages.
Leaving the nuclear regulation body is likely to affect the supply chain of isotopes used in nuclear medicine, on which the Euratom Supply Agency has a prominent controlling role.
Besides medical supply concerns, energy ones are at the forefront, given that in the UK the 21% of the energy supply in 2015 was generated by nuclear power and that the country does not own any domestic sources.
Two main energy-related problems might arise if the UK really leaves Euratom:

Reduced access to nuclear fuel

The United Kingdom ensures its nuclear fuel supply through Euratom itself. In fact, being a member of the Treaty made it also a partner in cooperation agreements with uranium-rich nations, such as Canada and Kazakhstan.
If not guaranteed by the agreements currently in place, it is not sure that the UK will be able to maintain current levels of nuclear fuel supply.
With the planned Hinkley Point C nuclear power station in Sommerset, worth £18bn and that will generate 3.200 MWe, the Government has made a long-term commitment to nuclear, but supply is only sure in the short term if Euratom is not there anymore and new relationships need to be forged.

Reduced Access to Innovation and Research

Euratom is particularly active in nuclear power research, especially in the field of nuclear fusion. Europe’s largest nuclear facility is in Sellafield, where plutonium is reprocessed and stored and where there is the largest stockpile of civil plutonium in the world. Euratom runs a laboratory there and invests enormous resources in safeguards checks. At the Culham Centre for Nuclear Energy, in the Oxfordshire, Euratom plays an equally significant role.
Leaving the Treaty and not allowing the free movement of professionals and capital could endanger access to research and funds and compromise the normal running of these facilities.

Leaving Euratom could be a significant danger, or it could conversely be completely manageable. It will be the former or the latter depending on what future plans the UK has regarding nuclear and non-nuclear energy.
As far as today, there seems to be very little clarity on the topic.

Play it by the ear will not be enough

Since the early days of Brexit, a feeling emerged that the British government was going to play a rather opportunistic and ambiguous role. And the feeling becomes stronger at every new topic that is addressed.
Last February the Government produced a six pages white paper* that again showed this attitude.
According to the document, the UK will no longer make a “vast” contribution to the EU but it will make appropriate contributions for the “European programmes in which (it) wants to participate” (p.49). While making clear that the UK is withdrawing from Euratom, the document stresses the aim of “maintaining close and effective arrangements for civil nuclear co-operation” (p.44). On energy, the UK was “considering all options for the future relationship with the EU” (p.43).

The document was very vague and what was clear was that the UK was moving from membership in EU institutions to a much more convenient cherry picking. The main problem with this strategy – or lack of – is that it provides no guidance to the market, to domestic and foreign investors, and to other countries’ governments, so leaving much uncertainty, potentially leading to a decrease in investments and a not efficiently supplied domestic market.

In the meantime things don’t seem to have changed much, with two reports published lately – the Commons Business, Energy, and Industrial Strategy (BEIS) Committee’s report on energy policy, and the Lords Science and Technology Committee’s report on nuclear research and technology.
What both reports highlight is the fact that the UK needs to invest in low-carbon energy infrastructure to keep the country running and meet its target of reducing emissions by at least 80% of 1990 levels by 2050.
The UK still has to decide whether it will support small modular reactors that have been designed for mass manufacture. Given the high development costs, there reactors need to be supported by the government, but both the industry and the investors are still kept in the dark.
Once again, what is hindering more investments is policy uncertainty and lack of clarity from institutions.

Euratom carries on a variety of functions that the UK will hardly perform by itself. As for many other fields, Westminster is maintaining an ambiguous stance, to buy itself more time and maybe in the hope of getting as much as it can from EU institutions.
This behaviour, besides frustrating the Commission and other institutions, keeps investors, the industry and research in a limbo of uncertainty that will with no doubt harm national nuclear energy production, research and technology if protracted for too long.
The UK would be the first country to leave Euratom, if it does, it better decide quickly how it will replace it in its functions and if new deals have to be arranged, the sooner the better.

* White papers are policy documents produced by the Government that set out their proposals for future legislation.

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