A 360° look at Brexit and UK product policy

Oct 11, 2017

The UK government needs acknowledged experts to maintain focus on a low-carbon economy.

Innovation in response to European energy efficiency policy. It’s the reason many of today’s products—from domestic washing machines to industrial pumps and motors--use far less energy than their predecessors and cost half as much. A household fridge purchased recently will likely use half the energy of the 12-year-old one it replaces. But will this kind of improvement continue after Brexit?

How does it currently work?

European legislation (specifically the EU Ecodesign Directive 2009/125) sets minimum energy performance standard regulations for a wide range of products, backed up by test and verification standards, which are enforced by market surveillance authorities. Essentially, manufacturers and importers must ensure the products they sell are designed to reduce their life cycle environmental impact. The worst performers are legally excluded from the market. Over time, the minimum standards are tightened and performance improves even more.

Where does Brexit leave the UK?

Though still open to debate, it looks like the UK will lose its vote on EU product regulations. Product policy enforcement will change, and mutual benefits from cooperation between EU market surveillance and enforcement agencies are at risk.

What opportunities present themselves?

The UK would be free to set its own--potentially more demanding--energy performance standards to accelerate the transition to a low-carbon economy. For globally-traded products, such a move would need to consider standards in adjacent markets, but bilateral alignment with other trading blocs could facilitate trade agreements and consistent product standards/labelling.

What challenges are created?

Public and business confidence in product standards might be shaken. Brexit might heighten adverse media and consumer reactions to perceived EU control in other member states, which could then lead to lessening of Ecodesign requirements or scope. Household appliance regulations are particularly vulnerable to such media reaction.

Adjustments—such as balancing national incentives with trade tariffs—might be needed to ensure product policy meets UK energy efficiency priorities and supports trade.

Another area for caution is trade agreement arbitration. New arbitration arrangements will be needed to underpin new trade agreements, since there is a risk that the free market might invite unwelcome compromises. The European Court of Justice is highly likely to cease being the final arbiter for UK product policy compliance.

What next?

From every angle, it’s clear that effective management of Brexit’s implications for product policy will require cross-government co-operation, robust evidence to inform negotiations, rapid assessment of options, and industry engagement. The UK Government needs acknowledged experts to steer a progressive course and maintain focus on a low-carbon economy–for the benefit of all.

By Mark Allington
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