Our views on changing dynamics in energy, ESG, finance, globalization and US policy.
It has now been a year since the UK exited the EU and a matter of months since the transition period came to an end. For the most part, there have not been major changes to environmental regulation in the UK. Instead, the UK has made small tweaks to its rules so that they make sense in the post-Brexit reality. Such tweaks may appear minor, but they can have major consequences for business. On top of this, divergences between EU and UK environmental laws are starting to creep in and going forward we can anticipate more.
In this alert, we consider what the rules on the level playing field mean for environmental law, and look at three specific examples of current, or potential, divergences which may provide a model for the future: (1) the rules on export of plastic waste; (2) the approval of an insecticide for the treatment of English sugar beets; and (3) the regulation of gene-edited organisms as GMOs.
1. What does the "level playing field" mean for environmental law?
During the Brexit negotiations, environmental law and climate policy were two areas of considerable controversy. The EU had initially requested "dynamic alignment", which would have required the UK to keep in step with EU environmental standards post-Brexit. In the end, this idea was rejected and complex provisions to maintain a "level playing field" were agreed instead. So what does this mean for environmental law?
The "level playing field" provisions in the UK/EU Trade and Cooperation Agreement1 ("TCA") cover a number of areas of law, including environment and climate.2 The environment chapter applies to industrial emissions, air, nature and biodiversity, waste management, the aquatic and marine environments, chemicals and the management of impacts on the environment from agricultural or food production.
The TCA requires "non regression" in the level of environmental protection by the UK from the end of the transition period. "Non regression" means that the UK should not try to undo, either by legislation or by lack of enforcement, the harmonised standards on environmental protection that were in place at 31 December 2020.3 Where EU environmental laws contain targets (e.g., for ozone-depleting substances), they continue to be binding on the UK even where the attainment of the target is envisaged for a later date.4
Going forward, the TCA does not require harmonisation with EU standards, meaning that in principle the UK can now adopt its own, different, rules on environmental issues. In its official statement on the TCA, the UK government has stated that "the Government has embedded into this Agreement our manifesto commitment to high labour environment and climate standards without giving the EU any say over our rules."
That said, the freedom for the UK to deviate from EU environmental regulation is curtailed by the following restrictions in the TCA:
- Countermeasures: Either party can take "appropriate rebalancing measures" if there are significant divergences in environment or climate protection, and where these divergences materially impact trade or investment between the Parties.5 Rebalancing measures should be strictly necessary and proportionate and are subject to arbitration. The TCA states:
The Parties recognise the right of each Party to determine its future policies and priorities with respect to labour and social, environmental or climate protection, or with respect to subsidy control, in a manner consistent with each Party's international commitments, including those under this Agreement. At the same time, the Parties acknowledge that significant divergences in these areas can be capable of impacting trade or investment between the Parties in a manner that changes the circumstances that have formed the basis for the conclusion of this Agreement.6
- If rebalancing measures are used too frequently, either the UK or the EU can trigger a review of the level playing field provisions more broadly.7
- The TCA contains specific provisions on the import and export of chemicals.8 These provide for, amongst others, regulatory cooperation on assessment of hazards and risks of chemicals and transparent procedures for the classicization of substances.
- The UK has a commitment to continue to apply certain general principles of EU environmental law, such as the polluter pays principle and the precautionary principle.9
- Both the UK and the EU have made a general commitment to "strive to increase their respective environmental levels of protection".10
In theory, the level playing field framework represents an important constraint on the UK's freedom to enact environmental rules that significantly diverge from those enacted at EU level. However, it remains to be seen how the level playing field provisions will be applied and enforced under the TCA.
2. For the most part, there have not yet been major divergences in the environmental laws
Because of its commitment to the "level playing field", coupled with some serious time constraints, since Brexit the UK government has generally kept the same EU environmental rules for Great Britain (meaning Scotland, England and Wales), tweaking them as necessary to fit the new legal reality.11 Under the terms of the Withdrawal Act and the Northern Ireland Protocol, EU environmental rules in many areas continue to apply in Northern Ireland.12
Tweaks to the rules involve, for example, updating the national legislation to replace (or simply remove) references to the European Commission and the European agencies, the internal market and other Treaty provisions. Take for example the legislation on vehicle emissions, where manufacturers' CO2 emissions targets are now based on the GB-wide fleet rather than their EU-wide fleet.13 Under the chemicals framework (REACH14), existing EU substance registrations are "grandfathered", and continue to be recognised under the equivalent (UK REACH15), which applies to Great Britain. Whilst these are not major legislative changes, they can nevertheless have major consequences for businesses and their legal compliance.
3. Divergence 1: The rules on plastic waste
From 1 January 2021, new EU rules entered into force that generally ban the export of plastic waste to non-OECD countries, including unsorted plastic waste.16 There are only exceptions for some categories of "clean" plastic waste destined for recycling.
Since these rules entered into force after the transition period, the UK chose not transpose the new EU rules, instead opting to enact a new system of prior informed consent.17 This means that, unlike in the EU, unsorted plastic waste can still be sent to non-OECD countries from the UK. According to the prior informed consent system, the importer can agree to accept or refuse UK exports of non-hazardous plastic waste. This is one of the first divergences we have seen so far in the field of environmental regulations, with the UK choosing to enact only a narrow ban on shipping hazardous plastic waste to non-OECD countries.
4. Divergence 2: Insecticide approved for sugar beets
In the field of pesticides regulation, existing EU substance approvals, authorisations and restrictions continue to be valid in the UK after Brexit.18 The week after the transition agreement came to an end, on 8 January 2021, the UK government departed from an EU ban and issued an emergency authorisation for Syngenta's Cruiser SB, a product containing thiamethoxam. The Cruiser product has been authorised for the treatment of sugar beet seeds in England for a 120-day period. This is a response to a lower yield of sugar beets in the 2020 season due to the incidence of the yellows virus.19
In the EU, thiamethoxam has been banned for outdoor use since 2018 (a ban that the UK supported at the time).20 Thiamethoxam is a neonicotinoid, a type of insecticide used in plant protection products, chemically similar to nicotine. Neonicotinoids are controversial because, by their nature, insecticides can be harmful to honeybees and other pollinators.
Does the UK's authorisation really represent a divergence from EU environmental standards? Perhaps not; in the context of the EU's Plant Protection Products Regulation,21 EU Member States can (and often do) issue emergency authorisations, including for neonicotinoids.22 When granting the authorisation, the UK applied the same criteria as would have been required had it still been subject to EU law.
However, the big change after Brexit is that the legal procedure for reviewing emergency authorisations is now different. The UK no longer has the obligation under the plant protection rules to inform the other EU Member States and the European Commission of the measures. And the European Commission no longer has the power to adopt a decision requiring the UK to withdraw or amend its measure.23
Moreover, going forward, any new decisions taken under the EU regime will not apply in Great Britain.24 This includes active substance and maximum residue level decisions and any new EU legislation on plant protection products.
5. (Potential) divergence 3: regulation of gene-edited organisms as GMOs
In July 2018, the EU's Court of Justice adopted a controversial judgment finding that organisms obtained by new methods of mutagenesis, such as gene-editing, are in principle covered by the EU's GMO Directive.25 Mutagenesis is a set of techniques which make it possible to alter the genome of a living species without the insertion of any foreign DNA. Before the court judgment was issued, it had not been clear whether gene-edited organisms were considered to be GMOs or not.
In line with the EU court case, the retained UK legislation requires that gene edited ("GE") organisms be classified as GMOs.26 However, on 7 January 2021, the UK government's Department for Environment, Food and Rural Affairs ("Defra") launched a public consultation on "the regulation of genetic technologies".27 The consultation states that "Defra's view is that organisms produced by GE or by other genetic technologies should not be regulated as GMOs if they could have been produced by traditional breeding methods. Leaving the EU provides an opportunity to consult on the implications of addressing this issue."
The consultation principally focuses on the regulation of GE organisms that possess genetic changes that could have been introduced by traditional breeding. At the same time, it seeks to gather views on the wider regulatory framework governing GMOs. The UK government says that, depending on the outcome of the consultation, it may "change the legislation to amend the definition of a GMO as it applies in England". This would represent a departure from the EU rules on GMOs, since the GM legislation for the UK would not apply to organisms produced by gene editing and other technologies if they could have been developed using traditional breeding methods.
Changes so far in the UK's environmental rules might not be ground-breaking, but they are important and businesses need to know about them so they can adapt their operations accordingly. The trade agreement negotiated between the UK and EU requires non-regression in the existing levels of harmonisation as they existed on 31 December 2020, at the end of the transition period. But going forward, divergences can, and will, begin to creep in. The above are a few examples of such divergences, which we anticipate will broaden as time goes on.
1 Trade and Cooperation Agreement between the European Union and the European Atomic Energy Community, of the one part, and the United Kingdom of Great Britain and Northern Ireland, of the other part.
2 See Chapter 7, Title XI of Heading One of Part Two, TCA.
3 The TCA states that the EU and UK "shall not weaken or reduce, in a manner affecting trade or investment between the Parties, its environmental levels of protection or its climate level of protection below the levels that are in place at the end of the transition period, including by failing to effectively enforce its environmental law or climate level of protection". "Environmental levels of protection" to mean "environmental levels of protection that are applicable to and in, and are common to, all Member States." See Article 7.2., Chapter 7, Title XI, TCA.
4 Article 7.4. of Chapter 7, Title XI of Heading One of Part Two, TCA.
5 Article 9.4. of Chapter 9, Title XI of Heading One of Part Two, TCA.
6 Article 9.4.1 of Chapter 9, Title XI of Heading One of Part Two, TCA.
7 Article 9.4.5 of Chapter 9, Title XI of Heading One of Part Two, TCA, which states: "Such a review shall commence at a Party's request, if that Party considers that measures under paragraphs 2 or 3 have been taken frequently by either or both Parties, or if a measure that has a material impact on the trade or investment between the Parties has been applied for a period of 12 months."
8 Annex TBT-3, TCA.
9 Article 7.4. of Chapter 7, Title XI of Heading One of Part Two, TCA.
10 Article 7.2. of Chapter 7, Title XI of Heading One of Part Two, TCA.
11 Within the UK, environment is a devolved legislative competence and Scotland and Wales may follow their own approaches, which could mean in some areas at least theoretically it would be possible to have 4 different environmental law systems.
12 See Article 5(4) and Annex 2 to the Northern Ireland Protocol (available here) which lists EU rules that continue to apply in Northern Ireland, including in the field of chemicals, pesticides and biocides, waste, environment, energy efficiency, GMOs, animal welfare and plant health.
13 See, for example, the Road Vehicle Carbon Dioxide Emission Performance Standards (Cars and Vans) (Amendment) (EU Exit) Regulations 2020 No. 1418.
14 Regulation (EC) No 1907/2006 of the European Parliament and of the Council of 18 December 2006 concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH), OJ L 396, 30.12.2006, p. 1.
15 The REACH etc. (Amendment etc.) (EU Exit) Regulations 2019 No. 758.
16 Commission Delegated Regulation (EU) 2020/2174 of 19 October 2020 amending Annexes IC, III, IIIA, IV, V, VII and VIII to Regulation (EC) No 1013/2006 of the European Parliament and of the Council on shipments of waste, OJ L 433, 22.12.2020, p. 11.
17 The International Waste Shipments (Amendment of Regulation (EC) No 1013/2006) Regulations 2020, No. 1455.
18 See Pesticides (Amendment) (EU Exit) Regulations 2020 No. 1376.
19 The UK Secretary of State assessed risks to bees as acceptable, based on the fact that sugar beet is a non-flowering crop and the applicant had proposed to make use of herbicide programmes to minimise the number of flowering weeds in treated crops. This was deemed acceptable to the UK Secretary of State.
20 Commission Implementing Regulation (EU) 2018/785 of 29 May 2018 amending Implementing Regulation (EU) No 540/2011 as regards the conditions of approval of the active substance thiamethoxam, OJ L 132, 30.5.2018, p. 40. In 2018, the UK government also voted in favour of those rules, see https://www.gov.uk/government/news/further-restrictions-on-neonicotinoids-agreed.
21 Regulation (EC) No 1107/2009 of the European Parliament and of the Council of 21 October 2009 concerning the placing of plant protection products on the market, OJ L 309, 24.11.2009, p. 1 ("PPP Regulation").
22 Emergency authorisations have been granted for the neonicotinoids in sugar beet cultivation by several EU Member States including Austria, Belgium, Croatia, Denmark, Finland, Lithuania, Poland, Romania, Slovakia and Spain. See: EFSA to examine emergency use of neonicotinoids at https://www.efsa.europa.eu/en/news/pesticides-efsa-examine-emergency-use-neonicotinoids.
23 Article 54, PPP Regulation.
24 Under the terms of the Withdrawal Agreement and the Northern Ireland Protocol, the EU's PPP legislation continues to apply in Northern Ireland.
25 Judgment in Case C-528/16 Confédération paysanne and Others v Premier ministre and Ministre de l'Agriculture, de l'Agroalimentaire et de la Forêt.
26 Currently, GMOs are defined in section 106 of the Environmental Protection Act 1990, as amended by regulation 4 of the Genetically Modified Organisms (Deliberate Release) Regulations 2002, SI 2002/2443.
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