Status of the UK-EU Negotiations

Updated: 01 Oct 2020

The EU Commission and the UK Government continue to negotiate the terms of a free trade deal. There will be no extension to the transition period beyond 31st December 2020 as the deadline to agree such an extension passed on 30th June 2020.

There remain two potential scenarios for what may happen from 1st January 2021:

1. A free trade deal on the future relationship is reached
2. No agreement is reached, and trade takes place on WTO terms (the “No Free Trade Deal” option)

The UK has published its proposals for an energy agreement [1]. This proposes that efficient cross border trade in electricity sit at the heart of the agreement. It aims to preserve certain cross-border trading mechanisms for example Day Ahead Market Coupling in the new arrangements and would largely see continuity in the current trading arrangements.

The EU has issued two documents with their vision for energy trading after 1st January 2021. In February they produced their initial proposals for an energy agreement [2] and had proposed that the UK continue to follow a proportion of the EU’s legislative framework for cross-border trade, but that there is a further period of cooperative working between Transmission System Operators to determine future cross-border trading arrangements.

On 9th July, the EU Commission published a further document, it’s thinking on “changes to apply regardless of the outcome of the Trade Negotiations” [3] including a section on Energy. This stated that from 1st January 2021, the United Kingdom will no longer participate in the Union’s dedicated platforms.

[1]UK Gov 'Our Approach to the Future Relationship with the EU'

[2]EC Press Release

[3]EC 'Getting Ready for Changes'