Cleared from scrutiny; further information requested; drawn to the attention of the Business, Energy and Industrial Strategy Committee and the Science and Technology Committee
(a) Report from the Commission: Interim evaluation of the Euratom Research and Training Programme 2014–2018; (b) Proposal for a Council Regulation on the Research and Training Programme of the European Atomic Energy Community (2019–2020)
(b) Article 7 of the Treaty establishing the European Atomic Energy Community; (a)—
Business, Energy and Industrial Strategy
(a) (39314), 15388/17 + ADDs 1–4, COM(17) 697; (b) (39315), 15387/17 + ADD 1, COM(17) 698
11.1The EU’s nuclear energy body, Euratom, funds a research programme into nuclear energy, both fission and fusion. The UK is a major beneficiary of the programme, because it is the host of the EU-owned Joint European Torus (JET) fusion energy project in Oxfordshire. Euratom also funds the EU’s contribution to ITER, an international research project to develop a commercially-viable source of fusion energy, via its Fusion for Energy Agency of which the UK is currently a member by virtue of its EU membership.
11.2The current Euratom research programme which funds these activities expires at the end of 2018, and the European Commission has proposed extending it by a further two years to give the Member States time to negotiate a comprehensive new programme for 2021 and beyond. The proposed Regulation for the 2019–2020 Euratom programme makes no substantive changes to the existing framework, and is therefore expected to be adopted by the Council in March 2018. In parallel, the Commission has also published an interim evaluation of the Euratom research programme with recommendations for its successor after 2020.
11.3The Parliamentary Under Secretary of State Department for Business, Energy and Industrial Strategy (Richard Harrington) submitted an Explanatory Memorandum on the proposal on 11 January 2018. He underlined the Government’s support for the extension of the research programme, and also emphasised the UK’s objective of securing additional funding for the JET project after the current grant agreement ends in December 2018.
11.4As regards the implications of Brexit for the UK’s cooperation with other EU countries on nuclear energy research, he notes that Euratom provides “a resource which we would not be able to be duplicate at the national level”. The Minister also references the provisional Brexit financial settlement, under which UK organisations would remain eligible for participation in the Euratom programme in 2019 and 2020 in return for continued UK contributions to the EU budget. He is silent about any contribution to Euratom after 2020 in return for continued UK participation.
11.5As in previous years, the extension proposed by the Commission does not make substantive changes to the Euratom research programme for the final two years of the current Multiannual Financial Framework. In view of the Government’s support for the extension of the Euratom research programme, we now clear the proposed Regulation and the interim evaluation from scrutiny. We also draw these developments to the attention of the Business, Energy and Industrial Strategy and the Science and Technology Committees.
11.6Given the value of the Euratom research programme to the UK, the Government has said that it will seek to remain closely associated with the programme after Brexit. However, the Government has refused to enter into detail about the proposed substance of the legal agreement with Euratom that would be necessary to make this a reality—both during and after any post-Brexit transitional period.
11.7The decision to leave Euratom raises a number of legal, technical, and financial questions about the UK’s cooperation with the EU on nuclear matters. We already referred to a number of these in our Report on Euratom of 10 January 2018. With respect to UK involvement in the EU’s nuclear research programme, the immediate implications of Brexit are:
11.8Moreover, in a “no deal” Brexit scenario, the UK would abruptly cease to be part of both Euratom, Fusion for Energy and the ITER project in March 2019. We assume that, in such an eventuality, any extension of funding for the JET in Oxfordshire beyond 2018 would also be terminated unilaterally by the EU. There would also be implications for the UK’s nuclear research sector more broadly, given that it would no longer be part of what the Minister described as a “resource which we would not be able to be duplicate at the national level”.
11.9The UK’s exit from Euratom therefore continues to raise important questions about the future of its nuclear research industry, and the political and financial mechanisms the Government would consider acceptable to keep the UK involved in Euratom and its research programme as a non-Member State. The Committee will continue to press the Government for clarity about the post-Brexit cooperation with the EU on research collaboration, including in the field of nuclear energy.
(a) Report from the Commission: Interim evaluation of the Euratom Research and Training Programme 2014–2018: (39314), + ADDs 1–4, COM(17) 697; (b) Proposal for a Council Regulation on the Research and Training Programme of the European Atomic Energy Community (2019–2020): (39315), + ADD 1, COM(17) 698.
11.10The Treaty establishing Euratom (the European Atomic Energy Community) enables the EU’s Member States to establish a “research and training” programme on civilian uses of nuclear power. The current Euratom programme was established in 2014 and, in line with the Euratom Treaty, runs for five years until the end of 2018. It complements Horizon 2020, the EU’s 8th Framework Programme for research and innovation for 2014–2020. The European Parliament is only consulted on the Euratom programme and does not have a binding say such, as it does for the general Framework Programme.
11.11The Euratom programme for 2014–2018 was given a budget of €1.6 billion (£1.4 billion), which is funded by the general EU budget. The programme finances nuclear research and training with an emphasis on fusion and fission energy, nuclear safety and security, radiation protection and radioactive waste management. This is done using two mechanisms:
11.12One of the main focus areas of the Euratom research programme has been research into developing a capability to generate electricity from fusion on a commercially viable basis. As the name suggests, fusion power is generated by fusing atoms together through a process of magnetic confinement, producing heat that can be converted into electricity. The Member States earmarked €728 million (45 per cent) of the Euratom programme budget between 2014 and 2018 for research in this area.
11.13EU-funded nuclear fusion research is undertaken by:
11.14In 2014, the EU and its Member States launched the Eurofusion Consortium. It is the umbrella organisation responsible for the EU’s collective scientific exploitation of the JET experiment.
11.15JET (the Joint European Torus) is a leading fusion energy project. It is run by the UK Atomic Energy Authority (UKAEA) at the Culham Centre for Fusion Energy near Oxford, but its facilities are owned by the European Commission, which provides them as an in-kind contribution to Eurofusion. Moreover, its research is largely funded by Euratom, which provided its latest non-competitive grant to the facility, worth €238 million (£209 million), in 2014. The research undertaken at JET contributes to the preparatory work for the launch of ITER in the middle of the next decade (see below).
11.16Euratom’s grant agreement with Eurofusion for the exploitation of JET expires in 2018. A decision on whether to extend the existing contract to 2020 under the next Euratom programme, which is the outcome sought by the Government, is pending. The Business Secretary (Greg Clark) has said that the Government wants to “ensure that the UK maintains its leading role in European nuclear research”, including “a close association with […] the Joint European Torus”. It has also confirmed that, should the Commission agree to extend the JET contract, the UK would “underwrite its fair share of JET’s running costs”. In any event, the Government has already agreed to contribute to the EU budget, and therefore to the Euratom research programme, in 2019 and 2020 as if it were still a Member State.
11.17The European Commission will decide on the possible extension of the grant agreement for the JET project at Culham for another two years after the draft Regulation extending the Euratom programme until 2020 is formally adopted. This is scheduled for the meeting of EU Science Ministers in Brussels on 12–13 March 2018.
11.18The International Thermonuclear Experimental Reactor (ITER) is an international programme exploring nuclear fusion-based energy. The UK currently participates in this programme via its membership of Euratom. ITER is different from the Eurofusion and JET projects, as it is an intergovernmental organisation with seven members (the EU, the USA, India, China, South Korea, Russia and Japan). Switzerland participates via its association agreement with Euratom.
11.19The aim of the project is to lay the groundwork for DEMO, a prototype fusion reactor that should demonstrate industrial-scale fusion electricity by the middle of the century. The signatories to the ITER Agreement share the cost of project construction, operation and decommissioning, and also share in the experimental results and any intellectual property generated by the project. The EU and Switzerland are responsible for the largest portion of construction costs (45.6 percent); the remainder is shared equally by the other parties (9.1 percent each). The participating countries mainly make their contributions to ITER in kind, in the form of completed components, systems or buildings.
11.20Each party to the ITER Agreement has had to create a Domestic Agency to fulfil its procurement responsibilities to ITER. These agencies employ their own staff, have their own budget, and contract directly with industry. For Euratom, the domestic agency is Fusion for Energy, funded primarily from the Euratom research programme. It manages the EU’s contribution to the ITER project, One of its main tasks is cooperating with industry, small and medium-sized businesses and research organisations to develop and provide a range of technology components, as well as engineering, maintenance and support services to underpin the project.
11.21As the current Euratom programme will expire in December 2018, the European Commission set out the details of a proposal to effectively extend the Programme by two years in December 2016. This will align it with the EU’s current budgetary cycle (2014–2021). This has also been the usual practice in previous years.
11.22A proposal for the Euratom research programme for 2021–2025 will be presented by the Commission later this year as part of the wider negotiations on the next Multiannual Financial Framework.
11.23The proposed Regulation for the 2019–2020 Euratom programme extension maintains the same scope as the current programme, and is based on the original impact assessment produced by the Commission in 2011. It is therefore expected to be adopted by the Council after a relatively short period of deliberation. The Bulgarian Presidency of the Council hopes to secure formal adoption of the Regulation at the meeting of EU Science Ministers on 12–13 March 2018.
11.24The Commission lists a small number of substantive changes to the R&T programme for 2019–2020 compared to the current programme, including:
11.25The Parliamentary Under Secretary of State Department for Business, Energy and Industrial Strategy (Richard Harrington) submitted an Explanatory Memorandum on the proposal on 11 January 2018. He underlines the importance of the Euratom programme for the UK nuclear research sector, noting that the UK Atomic Energy Authority receives around €65 million (£56 million) annually for the JET operating contract, on top of the €4.4 million (£3.8 million) in funding for fission research UK organisations receive on average per year. He adds:
“UK organisations also benefit from access to the unique JRC [Joint Research Centre] nuclear facilities of which the UK currently has no equivalent. As a consequence of this direct funding, UK organisations and researchers have access to all research programmes funded partially or in full by Euratom, providing a resource which we would not be able to be duplicate at the national level.”
11.26With respect to the implications of Brexit, the Minister notes that the provisional financial settlement for the UK’s withdrawal from the EU will allow the UK to continue participating in the Euratom research programme (and all other EU funding instruments) during a transitional period after March 2019, until the end of the current Multi-annual Financial Framework in December 2020. In return, the UK will make its contributions in 2019 and 2020 as if it were still a Member State (including the rebate). It will also assume liability for a share of the EU’s expenditure commitments made before 31 December 2020 which have not yet been paid by that date. However, as noted, this arrangement does not guarantee that the Commission will provide funding for the JET in Oxfordshire beyond the end of 2018.
11.27As regards the post-transition relationship between the UK and Euratom, the Minister reiterates the objective set out in the Government’s “future partnership paper” on science and innovation, namely that the UK “hopes to find a way to continue working with the EU on nuclear R&D”. He does not provide any further detail about the Government’s plans for the substance of such a partnership, or its financial implications.
11.28In parallel to its proposal to extend the Euratom research programme until the end of 2020, the European Commission also published an interim evaluation of the current programme to date.
11.29The evaluation assesses the “relevance, effectiveness, efficiency, coherence and EU added value” of the 2014–2018 Euratom research programme up until the end of 2016. It presents a generally positive view of the programme to date, noting that the research challenges addressed by the programme are “relevant for future economic development and the safety and wellbeing of European citizens”.
11.30The report also sets out a series of recommendations made by independent expert groups established by the Commission for the next Euratom programme, which will run from 2021 to 2025. These cover a range of issues, including recommendations to reinforce the training elements of the programme through specific objectives and to introduce greater synergy with other EU research activities and to address means of increasing the participation of new and emerging contributors. There is also a recommendation for the launch of a European Joint Programme in nuclear waste management research. The European Commission is studying these recommendations, and the result of its assessment will be incorporated into the upcoming proposal for the Euratom research programme after 2020.
11.31Of particular relevance to the UK is the expert groups’ recommendation that funding for the JET experiment should be continued until 2024. However, given the sensitivities around the Brexit negotiations, the Commission refused to accept this recommendation directly, repeating that “all decisions concerning the funding of concrete fusion activities, are to be taken by the Commission as part of the Euratom work programme 2019–2020, once the new Regulation is adopted”.
11.32In his Explanatory Memorandum on the interim evaluation of the Euratom research programme, the Minister reiterates the Government’s favourable view of the programme for the UK, and its support for the extension of the programme until the end of 2020.
11.33As in previous years, the extension proposed by the Commission does not make substantive changes to the Euratom research programme for the final two years of the current Multiannual Financial Framework. Our main concern therefore relates to the wider political context created by the UK’s withdrawal from the EU, and its implications for UK involvement in collaborative European nuclear research.
11.34When the Government invoked Article 50 of the Treaty on European Union to notify its intention to withdraw from the EU, it gave parallel notice to withdraw from Euratom. As a result, the UK will cease to be a member of Euratom in March 2019 unless the Article 50 negotiating period is extended or the Withdrawal Agreement provides for a different date.
11.35As a consequence of the decision to leave Euratom, the relationship between the UK and the EU’s nuclear research programme will change in a number of ways when the UK ceases to be a Member State:
11.36We note in this respect that the exact rules for association of non-EU countries with the Euratom research programme after 2020 are yet to be determined. However, there is precedent for third-party involvement in fusion research via participation in the Euratom R&T Programme and the Joint Undertaking for ITER (known as Fusion for Energy), with Switzerland the only non-EU country to participate in both.
11.37If the UK negotiated an association agreement with the Euratom research programme similar to that of Switzerland after the post-Brexit transition, it would have to make a financial contribution each year. The contribution would be dependent on the EU’s annual budget for the programme, over which the UK would no longer have control. In return, UK-based organisations would be eligible for funding for indirect action (such as the Joint European Torus), and to participate in actions undertaken by the Commission’s Joint Research Centre.
11.38However, while non-EU countries who participate in the Euratom research programme are allowed to send observers to the Euratom Programme Committee (which has to approve funding decisions and work programmes put forward by the European Commission), only EU Member State representatives have a vote. At present, given the use of qualified majority voting on the Committee, the UK has a significant influence.
11.39The Government has not provided any detail about its desired substance for an agreement on the UK’s association with the Euratom research programme, or its view on the financial contribution it would be expected to make.
11.40The UK’s exit from EU also affects its status under international agreements concluded by Euratom on behalf of its Member States. In the field of nuclear research, this is principally the ITER Agreement (see paragraphs 11.18 to 11.20 above).
11.41Although the UK is not independently party to the ITER Agreement, it is the Government’s stated objective to remain involved in the ITER project after Brexit. During the transitional period, if one is negotiated, the UK would remain a contributor to the EU’s Fusion for Energy Agency. However, whether the other parties to the ITER Agreement will accept this as the legal basis for the UK’s continued involvement in ITER is unclear.
11.42In June 2017, the European Commission spelled out the two options open to the Government to remain involved in ITER after Brexit and any transitional phase:
11.43The Government has not indicated which of these options it would prefer as the long-term solution for continued participation in ITER. The Committee requested further information from the Minister for Science on this point in January 2018, but has not yet received a reply. Continued association with ITER through association with the Fusion for Energy Agency might be more straightforward to negotiate, considering that discussions with the EU on the future partnership on nuclear matters will take place in any event and no treaty change would be necessary. Under EU law, such association would require the UK to:
11.44If the UK were to join Fusion for Energy, it would sit on its Governing Board with voting rights. Whether it retains its seat for the duration of the transitional period (i.e. in between ceasing to be a member of the EU and concluding a new association agreement with Euratom) is yet to be negotiated.
11.45The Committee will continue to press the Government for more detail about its proposals for the post-Brexit partnership with Euratom, including the legal and financial implications of an “association agreement” with its nuclear research programme and the Fusion for Energy Agency.
130 The Committee looked at the EU’s contribution to the ITER project, which is facing an escalation in costs, in its .
131 Unlike the EU’s general Framework Programme for research (Horizon 2020), which can be adopted by qualified majority, the Euratom research & training programme must be endorsed unanimously by all Member States. The European Parliament is consulted but does not have a vote.
132 See Commission document .
133 submitted by the Department for Business, Energy & Industrial Strategy (11 January 2018).
134 See for more information our (10 January 2018).
135 The EU has taken an uncompromising stance on UK representation in its institutions and bodies during the transition, with UK representation only foreseen on an “exceptional” and “case-by-case” basis, at the invitation of the remaining Member States. See for more information the negotiating directives on transition as adopted by the General Affairs Council on 29 January 2018.
136 The , composed of Member State representatives, has to approve by qualified majority the European Commission’s proposals for work programmes and funding decisions for indirection actions under the Euratom research programme.
138 The notes that “the operation of JET will be funded via a separate bilateral operation contract between the Commission and [the Culham Centre]”.
139 A torus is a geometrical three-dimensional shape, perhaps most easily compared to a doughnut or an inner tube. The JET has its name because it has a tokamak design, a magnetic confinement device that forces the plasma needed for fusion power into the shape of a torus.
140 The facilities are owned by the EU because the JET project was established by the then-European Economic Community/ established a five-year research programme into nuclear fusion. In 1975, released EEC funding for the design and preparation of JET, and established the JET Undertaking and fixed its location at Culham, Oxfordshire. See the , p. 31.
141 Written Ministerial Statement on Energy Policy (), January 2018.
142 BEIS, ““ (27 June 2017).
143 Any funding for the JET beyond 2020 will not be decided until after the UK’s projected date of exit from the EU in March 2019, as such a grant would require an additional funding decision under the post-2020 Euratom programme Regulation, which is yet to be put in place. In its interim evaluation of the Euratom R&T programme, the European Commission said: “Any future Euratom support to fusion research and Euratom support to all relevant research facilities beyond 2020 will be the subject of an impact assessment accompanying the Commission proposal for the future Euratom research programme.”
144 The ITER Organization has also concluded non-Member technical cooperation agreements with Australia (through the Australian Nuclear Science and Technology Organisation, ANSTO in 2016) and Kazakhstan (through Kazakhstan’s National Nuclear Center in 2017).
145 on the Establishment of the ITER International Fusion Energy Organization for the Joint Implementation of the ITER Project (December 2006).
146 Of this share, 80% is funded from the EU budget and 20% by France as the ITER host country.
147 Its full name is the “European Joint Undertaking for ITER and the Development of Fusion for Energy”. The agency was established by the Member States via .
148 See article 12 of .
149 , 22 December 2016.
150 See for example , which extended the until 2013.
151 See for example the .
152 Unlike the EU’s general Framework Programme for research (Horizon 2020), which can be adopted by qualified majority, the Euratom research & training programme must be endorsed unanimously by all Member States. The European Parliament is consulted but does not have a vote.
153 See European Commission document .
154 submitted by the Department for Business, Energy & Industrial Strategy (11 January 2018).
155 The is the European Commission’s in-house scientific research division.
156 The difference between the EU’s financial commitments and actual payments is known as the Reste a Liquider (RAL). By the end of 2020, RAL is to stand at approximately €254 billion (£223 billion). The UK’s share of this is expected to be roughly 13 per cent.
157 DExEU, ““ (6 September 2017).
158 See European Commission document [x/y]. The Commission also published an interim evaluation of Horizon 2020, which we have considered separately in a different chapter in this Report.
159 submitted by the Department for Business, Energy & Industrial Strategy (11 January 2018).
160 on the post-Brexit transition adopted by the General Affairs Council on 29 January 2018, para. 18: “In line with the European Council guidelines of 15 December 2017, the United Kingdom will however no longer participate in or nominate or elect members of the Union institutions, nor participate in the decision-making or the governance of the Union bodies, offices and agencies.”
161 The , composed of Member State representatives, has to approve by qualified majority the European Commission’s proposals for work programmes and funding decisions for indirection actions under the Euratom research programme.
163 Norway is fully associated with Horizon 2020 but does not participate in the Euratom R&T programme as it has no domestic nuclear industry. The only other non-EU country that participates in the Euratom programme is Ukraine.
164 To participate in the programme, Switzerland has to make an additional contribution which is added to the EU’s budget for the programme. This contribution is calculated as a fixed proportion of the budget set by the EU in relation to Switzerland’s GDP compared to that of the EU. For example, if the EU’s budget was €100 million, and Switzerland’s GDP was 3 per cent of the EU’s GDP, it would have to make a contribution of €3 million, bringing the total budget for the programme in that year to €103 million. This is also the same approach taken to financial contributions by non-EU countries to other EU programmes, for example under the EEA Agreement.
165 Any continued EU funding the JET project in Oxfordshire after 2020 could require an additional contribution by the UK, given that it would be the direct beneficiary of a disproportional tranche of Euratom’s annual funding for fusion energy research.
166 The UK’s participation under international agreements concluded by the EU and Euratom, including the ITER Agreement, will automatically lapse on the day it ceases to be a Member State.
167 European Commission document COM(2017) 319.
168 See .
23 February 2018