What’s in it for the EU?

04 April 2017

Article 50 has been triggered and Brexit really does mean Brexit. Now begins the arduous task of negotiating the UK's divorce from the European Union, and there is one simple test the European Commission will be applying to every one of the UK government's demands, writes Tom Greatrex.

That test is: "What's in it for us?" And for many issues, answering this question will be difficult.

Why would the EU want to allow passporting for the City of London? Why would they allow unfettered access to the single market? Why would they want to make it easy for UK citizens to travel to and from the EU?

Fortunately for the nuclear industry, replacing the benefits of the UK's membership of the European Atomic Community (Euratom) - which without an agreed implementation period will cease on 29 March 2019 - is in the interest of both the UK and European nuclear industries.

"For the UK, again, the benefits of having a close relationship with Euratom are obvious. For the EU less so but as with any divorce, money will ease the friction."

This is not to say the solutions to the challenges brought about by the UK's withdrawal from Euratom will be straightforward or quick to solve. The process will be difficult, time-consuming and there is always the concern politics could cloud the interests of business.

Away from Brussels, the first step in the negotiation must be agreeing a replacement Voluntary Offer Agreement with the International Atomic Energy Agency in Vienna for a new UK safeguards regime. Safeguarding is the critical process whereby inspectors check nuclear material is in the right place and being used for its intended purpose.

To be clear, this is not about the safety of the UK's nuclear reactors or the workers on site; all safety inspections and monitoring is carried out by the UK's independent Office for Nuclear Regulation and this will continue to be the case outside Euratom.

Once a new safeguards regime is in place, negotiations can move onto agreeing a Nuclear Co-operation Agreement with Euratom, and gaining third country status to help facilitate the trade of nuclear material, goods, people and services between the UK and the European Union.

For the UK, the benefits of having third country status are obvious. The UK is working on new build and decommissioning projects across Europe and as one of the early pioneers of nuclear energy, the industry has a wealth of exportable talent and expertise.

And for the EU, the benefits are equally obvious. The UK is one of the largest nuclear markets in the world with work covering all aspects of the fuel cycle, across new build, operations, decommissioning, R&D and waste management.

The UK's annual decommissioning budget is just over £3.0 billion ($3.7 billion), a new build program worth more than £60 billion is under way and multi-million pound refurbishments are being carried out across each of the UK's existing stations. Why shut the door or make access to these opportunities more difficult?

The next stage of the negotiation with the EU will be agreeing a contract for the UK to continue its involvement in the EU's various nuclear R&D programs. Euratom currently facilitates the UK's participation, through the Fusion for Energy (F4E) Joint Undertaking, on the JET and ITER nuclear fusion programs. It also allows the UK to gain from important research into the geological disposal of radioactive waste.

The UK has been a significant net beneficiary under the current relationship, but with the JET test reactor located in Oxfordshire, the Brexit decision has undoubtedly cast a shadow over the future. The contract with Euratom for JET runs out in 2018, but it was expected to be extended to at least 2020 and potentially further to 2024, and negotiations on this extension cannot wait until 2019.

For the UK, again, the benefits of having a close relationship with Euratom are obvious. For the EU less so but as with any divorce, money will ease the friction.

If Euratom were to cancel the contract, the EU would be cutting of its nose to spite its face. JET is an important program of work which is feeding critical information for the much larger ITER reactor program in the South of France. Shutting down the program now simply doesn't make sense and transporting the test reactor to the continent is simply not feasible.

Moving on to ITER, the program is largely funded by the Euratom Community but has many international partners: China, India, Japan, South Korea, Russia and the USA. If the UK government is keen to help fund the program outside of the EU, there will surely be no objection. The issue for industry is to convince the UK government why it makes sense to continue to be involved. Luckily a simple argument.

The UK's participation in the project allows UK companies to benefit financially, and so far the supply chain has won contracts worth €500 million ($532 million) and this number was expected to rise to at least €1 billion. More importantly, international collaboration on a project this important will keep the UK at the top table of nuclear nations, an ambition the government has reiterated several times.

And this is the key, if the UK is to continue to be a major player in the nuclear industry and many other international sectors, the government must maintain as close a relationship as possible with the European Union. To do so it must clearly explain why this is in the EU's interest.

Tom Greatrex

Comments? Please send them to editor@world-nuclear-news.org

Tom Greatrex has been chief executive of the UK's Nuclear Industry Association since February 2016. Previously, he was the Labour MP for Rutherglen and Hamilton West and shadow energy minister.