Why the UK must not crash out of Euratom

ALTHOUGH THE UK’S GOVERNMENT ministers are reluctant to admit it, the legal advice is clear: that the Euratom Treaty, under which nuclear activities take place, is entirely separate from the EU foundation document, the Treaty of Rome. The UK could quit the latter and stay in the former.

If politicians had studied the consequences of ‘Brexatom’ before announcing it, almost casually, in the explanatory notes of the legislation last January – and without warning to either the industry or our European partners – it is possible they might have hesitated.

Unfortunately, the obsessive desire of Brexiters to rid the UK of the allegedly malign jurisdiction of the European Court of Justice (ECJ) swept all before it. As soon as the decision to leave Euratom was announced it was apparent that Whitehall was totally unprepared for its far-reaching implications.

These include a halt to the construction of new nuclear capacity in the UK, thereby weakening the country’s energy security and jeopardising its ability to continue cutting carbon emissions.

Secondly, it threatens the continuing operation of the UK’s existing nuclear plants on which today’s electricity consumers depend.

Thirdly it puts at risk the supply of medical isotopes used in scans and cancer treatment, on which thousands of patients rely. These cannot be stockpiled in advance because they decay quickly.

Crashing out of Euratom has even more devastating and immediate consequences than the general “no deal” exit from the EU (about which many Brexiters remain bewilderingly and irresponsibly sanguine). There are no World Trade Organisation (WTO) rules to fall back on in the nuclear industry. Trade in all nuclear fissile materials, on which the UK’s energy industry and its health service depend, simply becomes illegal on exit day.

The stakes could scarcely be higher. Unless nuclear cooperation agreements (NCAs) are signed with over 30 countries before exit day, dire problems will emerge. In the longer term the UK’s substantial and internationally respected role in nuclear research projects will also be in doubt. These include the Culham Centre for Fusion Energy, a laboratory largely funded by the EU that employs many EU nationals. It also includes work at UK universities in the lucrative area of nuclear decommissioning, which offers great commercial opportunities for UK business. Without the guarantee of continued free movement of nuclear workers – including scientists, academics and researchers – which is currently guaranteed by Euratom, the UK’s leadership in this field may soon fade.

Fortunately, Whitehall officials, with help from the nuclear industry, are gradually getting up to speed. One sign is the Nuclear Safeguards Bill now weaving its way through Parliament.

This will give power to the Office for Nuclear Regulation (ONR) to implement current, and introduce future, regulatory safeguards. But it is only a partial solution, because it does not outline what form the UK’s future relationship will take, with Euratom or other important nuclear partners outside the EU such as the USA, Canada, and South Korea.

Furthermore, the government has to urgently establish a new regime to replace all the regulatory and research functions that have been carried out by Euratom for the UK since it became a member state in 1973. These include handling relations with the International Atomic Energy Agency (IAEA).

None of this is quick or easy. The ONR is mounting its largest recruitment drive of the last fifty years to take on all the responsibilities currently managed at EU level. Although the UK undoubtedly has the necessary talent, attracting and training qualified inspectors takes time. There is no guarantee it will be mission-ready by deadline day, currently scheduled for 29 March 2019. 

Although both the EU and the UK recognise that an agreement on nuclear cooperation is a priority, little progress appears to have been made. The prescriptive conditions agreed at the start of Brexit negotiations focus on three issues: the so-called divorce bill; citizens’ rights; and the Northern Irish border. This restricts any progress on other critical areas, such as Brexatom.

The slow pace of negotiations has not helped. Side-bar talks on a future nuclear agreement are urgently needed, so a quick nuclear deal can be reached between the EU and UK in early 2018. This would reassure the industry and potential investors.

Four possibilities

There are four possible outcomes for the UK when negotiations finally begin.

One is full Euratom membership; another is associate membership much like Switzerland; a third is a bilateral NCA; and the last is a single free trade agreement bespoke to nuclear.

The first two of these are impossible if the UK maintains its absolute rejection of the ECJ. Of the others, an NCA could lead to a full free trade agreement (FTA) and a template exists in EU/US agreements, though the EU would probably push back on automatic reprocessing rights until the ONR was fully scaled up.

A bespoke nuclear FTA is therefore the most likely, but this will require a transitional period of two years or more and will probably not preserve the full Euratom benefits.

Brexatom, once implemented, will remove one of the most important countries from this treaty, silencing one of the strongest pro-nuclear voices in EU discussions. This is an additional unwelcome problem for all who believe nuclear is an essential part of the energy mix for many EU member states.

All this comes at a time when hostility to nuclear in the EU is worryingly widespread, although it is hard to see how the challenging carbon emissions reduction targets agreed at COP 21 in Paris in 2015 can be achieved without substantial new investment in nuclear.

The 2016 EU reference scenario, the model for meeting the 2030 decarbonisation target, indicates that aggregated nuclear capacity of 110GWe is needed. On current trends, one-third of the current European nuclear fleet will be lost by 2030, so this would require 34GWe of new nuclear capacity in just 13 years. As of now only 7.5GWe is under construction, with a further 26GWe planned with no guarantee of moving ahead.

An opportunity to expand cooperation

Nuclear depends on close international cooperation to be successful. For that reason, NNWE believes the creation
of a larger club of pro-nuclear countries, comprising EU member states and other countries bordering the EU, could now be timely.

In 1957 when the Euratom treaty was signed neither the threat of climate change nor the urgency of decarbonising the electricity generation industry were understood. Today the need for new investment in nuclear plant is clear and it is important to try and convert the challenge posed by Brexatom into an opportunity.

The Organisation for Nuclear Cooperation in Europe (ONCE) initiative would be based on a shared recognition that, alongside the maintenance of rigorous standards of openness, competition and safety, nuclear energy is an essential element in Europe’s response to climate change. It would seek ways of ensuring that nuclear energy helps to deliver secure, sustainable and affordable electricity for the benefit of humanity.

ONCE could include among its primary aims the safe delivery of nuclear energy at a price competitive with other low carbon technologies. In my view nuclear must be able to match the falling price of other low carbon energy sources if it is to achieve its full potential.

If successful ONCE could compensate for the problems which Brexit imposes on the nuclear industry and create new opportunities for the sector.

The announcement at COP23 of a new anti-coal group, led by the UK and Canada – both strong pro-nuclear nations – and supported by France, shows that where nuclear is adopted, unabated use of coal can quickly decline. The EU and its pro-nuclear neighbouring countries, which will soon include the UK, should help the growing economies of Eastern Europe undergo their clean energy transition, with nuclear at its heart.

The potential disruption of Brexatom affects both the EU and the UK. However, as in most areas, the damage resulting from no deal is far worse for the UK. At the same time, it does offer fertile ground for a workable agreement since there is little, if any, actual hostility to continued close cooperation.

Even the director of the UK’s triumphant Vote Leave campaign in the June 2016 referendum has criticised advocates of Brexatom, very few of whom now appear to exist. If concluded, an agreement on nuclear issues between the EU and its former member state might start to build the trust and sense of common purpose which is sorely lacking in the current climate and which is essential for successful trade relationships in all industries.