EU-UK set course for deeper cooperation on maritime safety, CCS, hydrogen

The European Commission and the UK have reached a Common Understanding that outlines a renewed agenda for cooperation, with a focus on maritime security and safety, as well as new energy technologies such as hydrogen and carbon capture, utilization and storage (CCUS), among other things.

In view of the UK-European Union summit held on May 19, the European Commission and the UK held discussions to identify opportunities for enhancing bilateral cooperation. The Common Understanding reflects the outcomes, with both parties committed to moving forward promptly with the actions outlined in the document, in line with their respective legal systems and procedures, while also reaffirming their commitment to respecting each other’s independence in decision-making.

The parties underlined the importance of the main cornerstone agreements, namely the Withdrawal Agreement, including the Windsor Framework, and the Trade and Cooperation Agreement.

The parties have agreed to strengthen collaboration on maritime security and safety, with the areas identified for closer cooperation including ship and port facility security, particularly related to the International Ship and Port Facility Security (ISPS) Code, maritime cyber resilience, security aspects of maritime autonomous surface ships, International Maritime Organization (IMO) maritime security initiatives and other relevant related topics.

In the area of maritime safety, the UK and the Commission aim to expand cooperation in relation to accident reporting, including mutual sharing of accident investigation reports, with cooperation in the context of the IMO to be intensified.

Furthermore, the Common Understanding implies the exploration of the potential for UK participation in the EU’s internal electricity market, including involvement in EU trading platforms, with existing electricity trading arrangements remaining in effect in the meantime.

Any agreement on this matter will need to align with the Windsor Framework and ensure a fair balance of rights and obligations. It will also define the relationship between the UK and EU electricity market rules, covering areas like state aid, the promotion of renewable energy, and environmental protection.

The agreement will include ongoing alignment with EU regulations where appropriate, while respecting the UK’s constitutional and parliamentary processes. It will also maintain the role of the Court of Justice of the EU in dispute resolution and ensure the UK’s involvement in decision-making.

The parties have also agreed to work towards enhancing technical and regulatory cooperation on CCUS, hydrogen and biomethane, including joint standards to enable cross-border CO2 infrastructure.

The Commission and the UK have expressed their shared belief that connecting their carbon markets would help address trade issues and create a more level playing field. To that end, both parties aim to establish a link between carbon markets by way of a EU-UK agreement linking the UK Emission Trading Scheme (UK ETS) and the EU Emission Trading System (EU ETS).

The agreement will align with the Windsor Framework and include provisions for mutual exemptions from the respective carbon border adjustment mechanisms, provided that both parties comply with their own legislation.

The deal would cover key sectors such as electricity and industrial heat generation, industry, maritime transport, and aviation, with the possibility of expanding the scope in the future, also ensuring dynamic alignment with EU rules, while respecting the UK’s constitutional processes.

The UK cap and the UK reduction pathway will be guided by the UK’s Climate Change Act obligations and Nationally Determined Contributions, and they should match or exceed the EU’s targets. The UK will also contribute financially to the EU’s efforts in this area.

Carbon Catalyst, part of a joint venture (JV) that performed the UK’s first-ever CO2 injection test, has welcomed the outcomes of the EU-UK Reset Summit, saying that it is potentially a pivotal moment for industrial decarbonization and climate cooperation across Europe.

“The agreement sets in motion linking the UK and EU Emissions Trading Systems (ETS) and establishes a clear pathway to a Europe-wide CO2 storage market. This is a long-awaited milestone that should unlock cross-border CO2 transport, provide greater certainty for carbon pricing and undoubtedly accelerate investment in the CCUS sector,” the company stated.

“We’re encouraged by the political will shown here, including the UK Government’s recognition that North Sea CO2 networks are essential to achieving net zero and ensuring better value-for-money from CCUS projects.”

According to Carbon Catalyst, this has exciting implications for the Poseidon CCS project and represents a signal for the wider CCS sector that the UK and EU are ready to lead the way on climate and industrial strategy.