Manufacturers want to see existing EU-led environmental legislation fully transposed when Britain exits the EU, according to a new report out today. Just a quarter of firms say that the UK shouldn’t adopt EU waste or chemicals directives, but industry also recognises that there is a longer-term opportunity for cutting environmental red tape and exploring a UK-specific approach:

• Environmental regulations and directives are already deeply embedded – industry flags concerns over cost and disruption of repealing and replacing
• Report warns of danger of undermining investments and says the sheer scale of EU-led environmental legislation means full transposition is the only practical short-term option
• With REACH registration pending in 2018, industry needs swift clarity on how the UK intends to proceed
• In the longer-term, manufacturers see a clear opportunity to cut red tape and explore an alternative UK-specific approach
• Report says supporting and protecting industry will be critical to ensuring post-Brexit Britain is a great success.

Post-Brexit Britain should fully transpose existing EU-led environmental legislation, at least in the short to mid-term, according to a new report out today from EEF, the manufacturers’ organisation and Squire Patton Boggs, the global law firm.

The report – Britain and the EU: manufacturing an orderly exit – points to strong support amongst manufacturers for the UK to continue complying with EU environmental regulation and directives. Less than a quarter (23%) say that the UK shouldn’t adopt EU waste directives and, even when it comes to EU chemicals legislation – potentially one of the most ambitious and burdensome for industry – still less than a quarter of firms want to see it dropped (23%)^[1].

The report says that substantial progress in environmental standards has been made and manufacturers are keen to see this continue.

Firms are taking a pragmatic view. With EU environmental regulations and directives already deeply embedded within UK businesses, they are concerned about the cost and disruption of repealing and replacing them with UK-owned legislation.

In calling for EU legislation to be ‘grandfathered’ across to the UK, the report also makes the case for protecting the significant investments businesses have made. In areas such as air quality, UK manufacturers have made considerable headway and substantial investments to ensure compliance with the EU’s Industrial Emissions Directive. If UK manufacturers are no longer aligned and obligated on similar terms to their EU counterparts, it will undermine investment and do little to promote future action to tackle industrial emissions on a global scale.

The report also calls for swift clarity on how the UK Government intends to proceed with REACH (Restriction, Evaluation and Authorisation of Chemicals) – a major piece of chemicals legislation that is already a considerable way through implementation.

With the registration deadline for businesses pending in 2018, not only are a number of UK companies, including SMEs, leading the complex and costly dossiers for their own use of chemicals or as representatives for their non-EU chemical suppliers, but some of the chemicals covered are critical to the sector. Sustained uncertainty about how this regulation will apply post-Brexit will be detrimental to long-term business planning.

While recognising the benefits of clarity, certainty and consistency, the report says that in the longer-term manufacturers see a clear opportunity to cut environmental red tape and explore an alternative UK-specific approach. This should aim to streamline environmental regulation, protect manufacturers from supply and price volatility, drive innovation and reduce harmful emissions.

Claire Jakobsson, Head of Energy and Environment Policy at EEF, the manufacturers’ organisation, says: “The dangers of a hasty Brexit are clear and nowhere is this more evident than when looking at the wealth of EU environmental regulations and directives, many of which have supported better behaviours and outcomes, but have also involved considerable investment. A mass repeal would be costly and disruptive, and would seriously undermine investment – all bad news for business. It’s also vital that we ensure Britain remains forward thinking and innovative and doesn’t see its environmental ambitions and responsibilities diminished because of leaving the EU.

“In the short-term we want Government to provide regulatory and policy certainty in this important arena. But in the longer-term there is clearly an opportunity to pull back from EU regulation where it does not work for the UK. This requires careful exploration to ensure there are no unintended consequences and we would want to see manufacturers fully consulted before any decisions are made.

“Our report makes it clear that supporting and protecting industry will be critical to ensuring post-Brexit Britain is a great success. The Government must adopt a rational approach to negotiations and deliver a carefully-engineered Brexit that supports investment, ensures business certainty and allows manufacturers to play a full and unfettered role in helping the UK achieve post-EU economic and global trading success.” 

Dave Gordon, Environment partner at Squire Patton Boggs, says: “Environmental regulation in the UK is heavily based and referenced to EU legislation and as such it is both likely and desirable that EU law would continue to apply during any transitional period both leading up to and immediately after exit.

“Complete departure from the EU would potentially exclude the UK from the decision making process on EU law and although this may be seen as allowing the UK to develop a competitive advantage it is unlikely to be sanctioned by UK government policy at the risk that environmental standards are lowered.

“Retaining a membership of the EEA would lessen such concerns and would, in consultation with industry, allow the development of a legislative framework that both supports business development/innovation and the continued protection of the environment.”

The full report – Britain and the EU: manufacturing an orderly exit – can be downloaded here.