Meeting Climate Change Requirements (UK from 1 Jan 2021)

On 7 July, the EU revised and updated its 1 Jan 2021 Readiness Notice on the EUETS (EU carbon trading) (previously dated 19 Dec 2018). This updated Notice is here.

Amongst the list of instructions are :

(1) Operators of stationary installations in the UK and aircraft operators where the UK is the administering EU member state – to continue holding emission allowances after 30 April 2021 – must open a trading account in the Union Registry administered by an EU Member State and move their assets to this account.

(2) They must also – ensure that their annual emission reports are verified by verifiers established in the EU and accredited by the national accreditation body of an EU Member State.

Please note the Notice also sets out specific restrictions that will apply in Northern Ireland from 1 Jan 2021.

As a result, the UK has updated (19th August) its pre-existing instructions on meeting climate change requirements (covering emissions trading, ecodesign and energy labelling) previously issued on 12 October 2018. Note: the EU does not have 1 Jan 2021 Readiness Notices on ecodesign or energy labelling (only on EMAS and the EU Ecolabel).

The UK instructions are here. I Blog posted about these instructions at the time in 2018.

Key points : (taking account of the EU Readiness Notice)

(1) UK stationary installation operators and aircraft operators will continue to have access to Operator Holding Accounts and Aircraft Operator Holding Accounts administered by the UK for 2020 compliance obligations, up to and including 30 April 2021. Access to accounts after this date may no longer be possible.

Where applicable, operators should confirm with their traders that delivery of allowances will be possible from 1 January 2021 to ensure sufficient allowances are available to enable compliance with surrender obligations for 2020 emissions.

(2) Holders of Trading Accounts, Person Holding Accounts, Person Accounts in National Kyoto Protocol Registry and Former Operator Holding Accounts in the UK section of the Union Registry should plan for a loss of registry access from 1 January 2021.

(3) Free allowances will need to be allocated by the National Administrator on or before 31 December 2020 (the end of the transition period) subject to any changes being agreed by the European Commission in a Commission decision meeting.

(4) The deadlines for UK operators participating in the EU ETS during the transition period are:

• 31 March 2021 – submit Verified Annual Emissions Report for 2020 emissions

• 30 April 2021 – surrender equivalent allowances to 2020 verified emissions

NOTE : The temporary suspension by the European Commission on the processes relating to the UK registry was lifted on 3 February 2020 and the UK commenced the process of issuing 2019 and 2020 free allocation, as well as resuming auctions. The lifting of the suspension also allowed UK stationary installation operators and aircraft operators to regain the ability to use their entitlement in the Union Registry to exchange international credits for EU ETS allowances.

(5) Account holders who use their accounts to hold and trade Certified Emission Reductions and Emission Reduction Units will continue to be able to access their accounts within the UK’s Kyoto Protocol National Registry until 1 January 2021. As of 1 January 2021 (the day following the end of the transition period), account holders will no longer have access to these accounts.

The UK government is procuring a new system to enable account holders to hold and trade Certified Emission Reductions and Emission Reduction Units, which we expect to be operational in Spring 2021. Businesses with accounts in the Kyoto Protocol National Registry should consider taking action to manage the risks created by a short gap in service before the new system is implemented. For example, affected business could consider opening an account in another country’s registry to hold and trade Certified Emission Reductions and Emission Reduction Units during this period.

EU PRODUCT DATABASE (this is not an EU Readiness Notice, so this UK information derives directly)

(1) In terms of the EU product database:

• all consumers will still have access to the ‘open’ section of the database

• however, the UK’s Market Surveillance Authorities will no longer have access to the ‘closed’ compliance section of the database.

There will be changes for UK and EU suppliers regarding the EU product database. UK and EU suppliers placing relevant energy-using products:

• on the EU market will have to enter relevant information into the database

• on the UK market will not be required, under domestic law, to enter relevant information into the database, including for those products placed on the market between 1 August 2017 and 1 January 2019 after 1 January 2021.

UK and EU suppliers must ensure that relevant energy-using products:

• placed on the UK market comply with minimum UK Ecodesign and Energy Labelling standards

• placed on the EU market comply with minimum EU Ecodesign and Energy Labelling standards

UK and EU retailers must ensure that relevant energy-using products:

• placed on the UK market comply with minimum UK Energy Labelling standards

• placed on the EU market comply with minimum EU Energy Labelling standards

RE standards – All EU ecodesign and energy labelling requirements which enter into force and apply before 31 December 2020 will have effect in the UK. Further legislation is being prepared to ensure that all of these requirements continue to function in the UK from 1 January 2021.

Please clarify any gaps e.g. verification of annual emission reports, and the specifics applying in Northern Ireland, with the UK government department BEIS.

DEFRA SPS standards (UK from 1st Jan 2021)

Lord Gardiner of Kimble made the following statements concerning the SPS standards regime that will operate from 1st Jan 2021 – (these statements made in the final reading of the Agriculture Bill at the House of Lords)

[note: goods placed on the NI market will need to comply with EU law where it’s listed in the Ireland/Northern Ireland Protocol]

(1) The Food Standards Agency and Food Standards Scotland will apply to imports under new free trade agreements. For example, regulated food products will need to pass the FSA’s risk analysis process before being placed on the local market. The FSA has doubled the number of risk assessors since 2017. It can draw on the expertise of 100 scientific experts and support staff and has recruited 35 additional members to its advisory committees. It has also taken wider consumer interest into account, such as the impact on the environment, animal welfare and food security, drawing on appropriate expertise and stakeholders to do so. The expertise of other government departments and agencies will be brought to bear in the risk assessment process, as required, including the Animal and Plant Health Agency and Defra officials.

(2) Equivalence will be considered by experts in the Animal and Plant Health Agency and the Food Standards Agency. The expert advice and evidence on regulated products will then be presented to Ministers and devolved Administrations for a decision on whether these products should be placed on the local market. Secondary legislation would need to be laid before Parliament to authorise new regulated products to be placed on the market.

(3) The functions of audit and inspection, currently carried out by the European Commission, will be repatriated to ensure that trading partners continue to meet local import conditions for food and feed safety, animal and plant health and animal welfare. This will include officials auditing the food production systems and rules of other countries and carrying out inspection visits to facilities in the countries themselves. Verification that requirements are being carried out as stipulated will be conducted through checks at the border. Audits will ensure that trading partners have the necessary infrastructure and regulation in place to export safe food and animal products, which either meet or exceed local import conditions, and will then ensure that these standards are maintained.

(4) The UK Government will take a science-based approach to SPS measures and take their own sovereign decisions on standards and regulations, in line with the principles of the WTO SPS agreement and other relevant internationally recognised guidance.

[Information on the WTO SPS agreement is here – note, it does not of itself set out SPS standards]

(5) Food labelling rules apply to all food intended for supply to final consumers or to caterers. Imported food needs to be fully compliant before it is placed on the local market. The name and address of the local food business, or the importer, will be required on the label from 1st Jan 2021. There are no exceptions to food labelling rules for imported food.

(6) Re Northern Ireland. The withdrawal agreement joint committee met again on 16 July and the Northern Ireland Executive representative again attended, in line with the New Decade, New Approach deal. They exchanged updates on implementation of the protocol and discussed preparatory work for future decisions.

(7) Re quotas that form part of the commitments within the UK goods schedule, which has been lodged at the WTO. The UK has already agreed a common approach with the EU to apportion EU 28 tariff-rate quotas between the UK and EU 27 in order to ensure existing trade flows are maintained. Legislation will be presented by the Treasury later this year under the Taxation (Cross-border Trade) Act 2018 to establish new tariff quotas in UK law.

(8) Re Use of gene editing. Until 2018, there was uncertainty within the EU as to whether the living products of gene editing technology should be subject to the same regulatory framework as genetically modified organisms (GMOs), because the legal definition of a GMO was open to interpretation.

In 2018, the European Court of Justice ruled that gene edited products must be treated in the same way as GMOs, even if the changes to their genetic material could have been produced by traditional methods, such as crossing varieties of the same species and selecting only the improved individuals.

The UK Government is committed to taking a more scientific approach to regulation.

Gene-edited changes to genetic material that would not arise naturally or from traditional breeding methods will still need to be regulated as genetically modified organisms. The UK Government will consult on this issue. Defra is working on the details so that a consultation can be launched in the autumn.

Further details are set out in the Hansard record – here.

EU-UK Readiness post 1st Jan 2021 (EU)

On 14th July, the European Commission published a Guidance Note “Withdrawal of the United Kingdom and EU Rules in the field of Customs, including preferential origin”.

This document (35 pages) is here.

The Guidance Note summary advice to Stakeholders –

–  consider whether they need to obtain an EORI number from an EU Member State;

–  consult their competent customs authority for further advice on their individual situation; and

–  adapt input and supply chains to take account that UK input will be non-originating for the purposes of tariff preferences with third countries.

Some points (this is not a full list, please read the document) –

(1) From 1st Jan 2021, UK EORI numbers will cease to be valid in the EU and will be invalidated in the relevant IT system EOS/EORI, including those UK EORI numbers linked to the ongoing operations covered by the Withdrawal Agreement.

Customs authorities of EU Member States should accept requests before 1st Jan 2021 and assign to them EORI numbers with the 1st Jan 2021 or thereafter as the “start day of EORI number”, according to the requests of the persons concerned.

(2) Authorisations granted by UK customs authorities are not valid in the EU from 1st Jan 2021. From 1st Jan 2021, the UK customs authorities are not an EU competent customs authority.

The UK is a Contracting Party to the Convention on a Common Transit Procedure (CTC), so from 1st Jan 2021 authorisations granted by the UK for transit simplifications are not valid in the EU Customs Decisions system, but need to be treated in the UK’s national system as a Contracting Party to the CTC. Where then the UK communicates to the Member States which of those authorisations continue to be valid within the framework of the CTC, the Member States are to accept those authorisations as valid.

(3) Authorisations granted to economic operators with UK EORI numbers are not valid in the EU from 1st Jan 2021, unless the economic operator has an establishment in the EU, has the possibility to obtain an EU EORI and to apply for an amendment of the authorisation to include the new EU EORI instead of the UK EORI number. Where an authorisation cannot be amended by replacing the UK EORI by an EU EORI, the economic operator should apply for a new authorisation with his new EU EORI.

(4) UK content (material or processing operations) is “non-originating” under EU preferential trade arrangements for the determination of the preferential origin of goods incorporating that content.

Note the specific different arrangements that apply in Northern Ireland from 1st Jan 2021.

EU-UK Readiness post 1st Jan 2021 (EU 1st Jan 2021)

The European Commission published a Communication “Getting Ready for Changes. Communication on readiness at the end of the transition period between the European Union and the United Kingdom” today 9th July. This document is here.

The Communication is posted on the European Commission’s End of Transition Period Readiness Page here, where other notices, with various publication dates, are posted.

Key points in the 35 page Communication (this is not a full list):

(1) As of 1 January 2021, the European Union and the United Kingdom will be two separate regulatory and legal spaces.

(2) As of 1 January 2021, licences issued to railway undertakings by the United Kingdom will no longer be valid in the European Union, and certificates or licences issued in the United Kingdom to train drivers will no longer be valid for the operation of locomotives and trains on the EU’s railway system.

[I Blog posted recently specifically re Railways]

(3) As of 1 January 2021, air carriers holding operating licences granted by the UK licensing authority for the commercial carrying by air of passengers, mail and/or cargo, will no longer be able to provide air transport services within the European Union. EU air carriers and holders of aviation safety certificates will need to ensure, and uphold compliance with European Union requirements, including airlines’ requirements on principal place of business and EU majority ownership and control, as well as the European Union aviation safety acquis.

(4) As of 1 January 2021, road transport operators that are established in the United Kingdom will no longer hold a European Community licence. In the absence of a reciprocal access agreement, the limited quotas already available under the mechanism of the European Conference of Ministers of Transport (ECMT) will be available for EU operators to conduct journeys to the United Kingdom, and for UK operators to conduct journeys to the EU.

[I Blog posted in 2019 about this topic]

(5) As of 1 January 2021, EU REACH registrations held by manufacturers and producers established in the United Kingdom will no longer be valid in the European Union. These entities will have to ensure that their substances are registered with a manufacturer or importer in the European Union or appoint an ‘Only Representative’ in the European Union as registrant for the substance.

[A UK REACH will operate in the UK, I Blog posted about this in 2019]

(6) As of 1 January 2021, downstream users in the EU will have to check whether chemical substances they use are registered by a registrant established in the European Union. Where this is not the case, they should:

* check whether the UK registrant they deal with plans to appoint an ‘Only Representative’ in the European Union; or

* register the substance in the capacity of importer.

Re Northern Ireland specifics (this is not a full list)

(1) Checks and controls will take place on goods entering Northern Ireland from the rest of the United Kingdom, for example on food products and live animals to ensure adherence to sanitary and phytosanitary (‘SPS’) requirements. Goods leaving Northern Ireland to enter the EU must comply with EU standards and rules.

(2) EU customs duties will apply to goods entering Northern Ireland unless the Joint Committee (set up under the Ireland/Northern Ireland Protocol) sets out a framework of conditions under which these goods are considered not to be at risk of entering the EU’s Single Market. Based on such a framework, no customs duties will be payable if it can be demonstrated that goods entering Northern Ireland from the rest of the UK are not at risk of entering the EU’s Single Market.

UK implementation of Ireland/Northern Ireland Protocol (Northern Ireland)

The UK government has today published its approach to implementing the Ireland-Northern Ireland Protocol of the Withdrawal Agreement that was signed with the European Union.

The Protocol sets up special arrangements that stem from the Withdrawal Agreement and apply in Northern Ireland from 1st January 2021, until at least 2024, when the first four-year consent vote process contained in the Protocol is initiated.

The Protocol covers a range of areas: human rights, the Common Travel Area, customs and trade, regulation of manufactured goods, the Single Electricity Market, some limited state aid provisions, and VAT and excise. The paper published today sets out the UK’s thinking in all of these areas. But the core of the Protocol is the provisions on customs and trade. It is these areas which are covered in most detail in the document.

It is the responsibility of the UK Government and UK authorities to give effect to the Protocol in Northern Ireland. The Protocol has as Annex 2, a list of EU law that will continue to apply in Northern Ireland – at least 2021 to 2024.

The UK approach is set out in a Cabinet Office Command Paper – here.

The paper sets out four key commitments that will underpin the UK Government’s approach to implementing the Protocol:

• There will be unfettered access for Northern Ireland’s producers to the whole of the UK market and this will be delivered through legislation by the end of the year.

• No tariffs will be paid on goods that move and remain within the UK customs territory

• Implementation of the Protocol will not involve new customs infrastructure – with any processes on goods moving from Great Britain to Northern Ireland kept to an absolute minimum so that the integrity and smooth functioning of the UK internal market is protected.

• Northern Ireland’s businesses will benefit from the lower tariffs delivered through our new Free Trade Agreements with countries like the United States, Australia, New Zealand and Japan – ensuring Northern Ireland firms will be able to enjoy the full benefits of the unique access they have to the GB and EU markets.

Today’s publication also sets out plans to establish a new business engagement forum, which will meet regularly to allow Northern Ireland’s businesses to put forward proposals and provide feedback on how to maximise the free flow of trade. The Northern Ireland Executive will be invited to join the forum.

The Withdrawal Agreement is administered by a Joint EU-UK Committee set up under the Agreement, and both the Agreement and the Protocol have dispute mechanisms.

More detail is expected, and accordingly I will write more Blog posts.

COVID-19 New State Guidance (Northern Ireland)

England yesterday issued new state guidance, and Ireland (the Republic) issued a Roadmap some days ago (see recent posts about these).

Northern Ireland has now issued new state guidance – here.

Unlike England and the Republic, Northern Ireland is not proposing specific target dates.

Apart from garden centres reopening, no changes to workplace restrictions are proposed. The next review is 28 May.

Withdrawal Agreement Ireland/Northern Ireland Protocol (Northern Ireland)

I posted earlier about the first meeting of the EU-UK Withdrawal Agreement Joint Committee. The first meeting of the Specialised Committee that deals with the Ireland/Northern Ireland Protocol has also been held. Note, this Specialised Committee will also have a specific advisory group report to it.

The Ireland/Northern Ireland Protocol is a particularly tricky aspect of the EU-UK Withdrawal Agreement that was signed late in 2019. It requires new arrangements to be set up for Northern Ireland. I have posted about this before.

The EU issued (and published) on 30 April a Technical Note on the implementation of the Protocol – here.

At various points, EU Technical Note reminds that from the end of the transition period, the UK has committed to apply in Northern Ireland the provisions of EU law listed in Annex 2 to the Protocol relating to sanitary and phytosanitary (SPS), products, and goods requirements.

The altered Cardinal Environment EHS Legislation Registers and Checklists for Northern Ireland will have these Annex 2 EU Law identified at the head of the Registers. We are working to the 31st December 2020 deadline for these alterations.

COVID-19 Roadmap (Ireland)

Per its COVID-19 law, the Irish state reviewed its COVID-19 lockdown (premises restrictions etc) last week and issued a Roadmap of dates of easing of the lockdown rules.

This Roadmap is here. The next stage applies from tomorrow. This next stage has no lifting of premises restrictions or allowance for outdoor work.

I posted some days ago with the EU Joint Roadmap for setting a unified approach to easing lockdown rules in EU member states.

The EU Joint Roadmap is here.

On the island of Ireland, the Northern Ireland jurisdiction of the UK has the capacity to issue separate instructions that differ from those on the neighbouring island of Britain (jurisdiction of the UK), but is unlikely to do this to a substantive extent. Both legal entities north and south of the border on the island of Ireland exchange information about their respective COVID-19 rules regularly.

The UK state will review its COVID-19 restrictions on Thursday, and is circulating privately (unpublished as yet) new Workplace Rules. I wrote a separate Blog post about this.

COVID-19 Workplace Social Distancing (Northern Ireland)

The Northern Irish government has issued Workplace Social Distancing guidance – here.

Note the careful listing of business activities that may remain open under the law, distinguishing between essential and non-essential.

Any business that does remain open must follow the hygiene and social distancing rules here.

I blog posted before about rules issued in Northern Ireland – see the Northern Ireland category in the Blog archive.

Withdrawal Agreement Joint Committee (Northern Ireland)

The UK left the EU at end of January 2020. The EU-UK Withdrawal Agreement (an international treaty) requires a Joint Committee staffed by the EU and the UK to operate the Withdrawal Agreement going forward.

The Withdrawal Agreement contains specific measures that will apply in Northern Ireland after the transition period expires, i.e. from 1st January 2021.

The Joint Committee (amongst other matters) will oversee and operate these Northern Ireland measures.

The first meeting of the Withdrawal Agreement Joint Committee will take place on Monday 30th March (by remote means).

The meeting will be co-chaired by the Chancellor of the Duchy of Lancaster, Rt Hon Michael Gove MP and Vice-President of the European Commission, Maroš Šefčovič.

The agenda will include four items:

1. Introduction and opening remarks from co-chairs

2. UK/EU Updates on implementation of the Withdrawal Agreement

3. Tasks and responsibilities of the Specialised Committees

4. AOB

The UK Delegation will include:

●   Chancellor of the Duchy of Lancaster, Rt Hon Michael Gove MP

●   The Paymaster General, Rt Hon Penny Mordaunt MP