Aviva, E.ON, RWE, EDF and NPower are among a coalition of 21 energy giants and top investors who have called on Britain and the EU to maintain close links on energy and climate policy after the UK leaves the bloc.
The EU and UK should seek a “deep level of cooperation” on climate and energy policy, similar to what is being envisaged on defence and foreign policy after the UK leaves, said the signatories of a joint letter sent to Brexit negotiators David Davis and Michel Barnier.
“We welcome the intention for prioritisation of security and defence in the negotiations and also urge you to expand this commitment to combatting climate change,” the coalition said in the joint letter, dated 20 April.
Signatories include investment giant Aviva, which has a market capitalisation of £21 billion (€23.97bn). It also includes the Institutional Investors Group on Climate Change (IIGCC), a group of 150 activist investors with over €21 trillion in assets, as well as five of Europe’s largest energy companies: NPower, RWE, EDF, SSE and E.ON.
Britain’s decision to leave the EU has posed a daunting list of questions to the energy sector. These cover trade law and tariffs, as well as nuclear safety and the UK’s continued membership of the EU emissions trading system for greenhouse gases.
A report published last year by the Boston Consulting Group and two other advisory firms mapped out those challenges and stressed the need for a transitional arrangement to smooth the path to Brexit.
“The integration of energy markets and climate policies across Europe has enhanced energy and climate security and reduced energy bills in the UK and the EU 27,” write the signatories, calling on Brexit negotiators to “ensure that these benefits continue in the future”.
Maintaining work on climate and energy security, including safeguarding the Paris Agreement on climate change should be top of the agenda on both sides of the channel, they argue.
“To ensure this is achieved, we call on you, in the Brexit negotiations, to develop a comprehensive Climate and Energy Chapter, which covers both trade and non-trade issues,” they write.
Stephanie Pfeifer, CEO of the IIGCC, said a comprehensive Climate and Energy Chapter in the Brexit negotiations “would help to manage the considerable uncertainty within markets” that the Brexit referendum has brought.
“Such a signal would boost investor confidence that both the UK and the EU27 will continue to work in a collaborative and ambitious manner to combat the challenge of climate change,” Pfeiffer said.
Sir Philip Lowe, a former Director General at the European Commission’s energy directorate, warned that leaving the EU’s single energy market, will add pressure on Britain to invest more in new electricity generating capacity, pay higher prices – arguably with less security of supply – and accept a bigger role for the state in the energy sector.
Brexit coalition letter (FINAL)
> Read the full letter below or by clicking here