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Reports & Research

What Would Leaving The EU Single Market Mean For UK Product Energy Efficiency?

May 23, 2017

Many products that are on the market today, from domestic washing machines to industrial pumps and motors, use far less energy than their predecessors. For example, a household fridge purchased recently will use half the energy of the 12 year old one it replaces. It is also likely to be half the price.

The reason for the energy saving is manufacturer innovation in response to European product energy efficiency policy. So will this improvement continue after Brexit?

What currently happens?

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 resulting in further performance improvements.

Where does Brexit leave the UK?

Whilst much is open to debate, it is fairly certain that the UK will lose its vote on EU product regulations. Product policy enforcement will change. Mutual benefits from cooperation between EU market surveillance and enforcement agencies are also at risk.

What opportunities present themselves?

The UK would be free to set alternative, potentially more demanding energy performance standards to accelerate the transition to a low carbon economy. The feasibility of this for globally-traded products would need to take account of standards in adjacent markets.

Furthermore, bilateral alignment with product standards of other trading blocs might be sought to facilitate trade agreements and alignment on product standards and labelling.

What challenges lie in wait?

Public and business confidence in product standards might be shaken. Brexit might heighten adverse media and consumer reaction against perceived EU control in other Member States. This might lead to lessening of Ecodesign requirements or product scope. Household appliance regulations are particularly vulnerable to such media reaction.

Adjustments might be needed to ensure product policy continues to meet UK energy efficiency priorities, as well as supporting trade, for example by balancing national incentives with trade tariffs.

An 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 to be the final arbiter for UK product policy compliance.

What next?

Effective management of the implications of Brexit for product policy requires 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 a focus on a low carbon economy – for the benefit of us all.

By Mark Allington