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For Britain’s nuclear industry, Brexit changes everything – could be the death knell

Brexit Is a Game Changer for the British Nuclear Industry, Bloomberg, By, Jonathan Stearns and Nikos Chrysoloras, 

  • U.K. withdrawal from nuclear treaty mirrors EU-exit challenges
  • Going it alone signals higher costs for companies, taxpayers

To understand the implications of Brexit, it helps to go nuclear.

 Of all the international regulatory challenges created by the U.K.’s impending departure from the European Union, the atomic-energy industry may best encapsulate the decision’s bottom-line effect: more bureaucracy and costs for a country that has long fought to curb both within the EU.
 Untwining the U.K. from decades of centralized European supervision of nuclear material for civilian use mirrors the broader Brexit process. Each involves abandoning treaty-bound organizations, re-establishing links on less integrated terms and, in the meantime, creating uncertainty for everybody from executives to researchers.

“Brexit is a complete game changer for the nuclear industry in Britain, altering the regulatory environment, creating major complexity and leading the way to higher costs for businesses, the state and ultimately the British taxpayer,” said Simone Tagliapietra, a research fellow on energy at the Bruegel think tank in Brussels. “It’s a huge, self-inflicted problem.”

 Brexit Microcosm

The EU’s nuclear framework is a microcosm of the Brexit hurdles because, like Europe’s single market and free-trade deals, it offers the U.K. benefits that the British government is keen to retain after the country withdraws from the 28-nation bloc in March 2019. Yet the act of leaving makes preserving those advantages difficult or even impossible.

With negotiations on the divorce terms stalled, numerous industries in Europe are stepping up calls for transitional arrangements that would maintain the status quo between the time of Brexit and the entry into force of any permanent agreements on future U.K.-EU ties.

While the EU’s national governments retain many of the policy powers associated with nuclear energy, the Euratom treaty creates a federal structure for some key elements. The centralized features include non-proliferation inspections, supply agreements with non-EU nations and research funding, all of which will fall on Britain to arrange for the first time in four decades.

When notifying its plan to withdraw from the EU, the government of British Prime Minister Theresa May also announced its intention to quit Euratom, which is governed by the bloc’s institutions. The move disappointed the U.K. nuclear industry, which had argued that post-Brexit Britain should stay in Euratom.

Risk of Disruption

Britain is a leading European nuclear nation, with 15 reactors accounting for about a fifth of domestic electricity production. The British atomic-energy industry employs more than 65,000 people and features companies ranging from plant operator EDF Energy and developer Horizon Nuclear Power — a unit of Hitachi Ltd. — to fuel producer Westinghouse Electric Co. and uranium enricher Urenco Ltd…….

The U.K., Euratom and the International Atomic Energy Agency are united under a single non-proliferation agreement. Under the three-party accord, Euratom helps carry out IAEA-mandated inspections on civil nuclear facilities in Britain to ensure that no material is diverted for atomic weapons.

In leaving Euratom, the U.K. will have to negotiate an inspection agreement of its own with the Vienna-based IAEA and beef up the national nuclear authority. Britain held an initial discussion with the IAEA on a new accord in September, according to the agency. The country also published draft legislation on Oct. 11 to create a domestic nuclear-safeguards system to replace provisions under Euratom.

Nuclear Accords

Post-Brexit Britain will also no longer be covered by cooperation accords that Euratom has with a range of non-EU countries including Australia, Canada, Japan, Kazakhstan, South Africa and the U.S. As a result, the U.K. will have to negotiate its own such deals, known as Nuclear Cooperation Agreements, or NCAs, including with the EU itself…….

The outlook for nuclear research in the U.K. is also hazy. As a member of the EU and host of a nuclear-fusion project known as Joint European Torus, the country sees 56 million euros ($66 million) a year directed from the Euratom research budget to the JET site in Oxfordshire where around 500 people are employed and about 350 scientists from Europe visit annually.

The funds for JET, which is a prototype for the world’s largest nuclear-fusion project called ITER in France, are part of a 1.6 billion-euro Euratom research budget for 2014-2018. Britain will have to negotiate access as of 2019 to this scientific network with the EU, which requires non-member countries participating in its research programs to make a financial contribution. https://www.bloomberg.com/news/articles/2017-10-15/brexit-takes-bureaucracy-to-the-atomic-level-for-u-k-industry

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October 16, 2017 - Posted by | business and costs, politics international, UK

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