154.The nuclear power industry presents particular challenges in the context of Brexit. As EDF Energy told us: “Nuclear generation is a key component of the current and future energy mix in the UK. The UK’s eight nuclear power stations currently provide 20% of the UK’s electricity needs.” Not only do nuclear power stations supply a significant amount of low-carbon electricity, but the continuity of that supply helps balance less predictable renewable sources, providing further assistance to the UK in meeting its decarbonisation objectives.
155.The UK’s use of nuclear energy is currently governed by the European Atomic Energy Community, also known as Euratom. Centrica explained that Euratom “provides for the transportation of nuclear fuel, waste and people amongst signatory member states”. Angela Hepworth, Corporate Policy and Regulation Director at EDF, which is currently embarking on construction of the new Hinkley Point power station, underlined that “we very much rely on the provisions in the Euratom Treaty to enable us to operate our existing power stations and for the future construction and operation of Hinkley Point”.
The European Atomic Energy Community (Euratom) was established in 1957. The UK became a member in 1973. It was founded to contribute to the formation and development of Europe’s nuclear industries, to guarantee high safety standards and to prevent nuclear materials intended principally for civilian use from being diverted to military use. It has also signed a number of bilateral agreements with other countries on nuclear safety, safeguards and research.
Euratom is a distinct legal entity from the European Union, but the two bodies have a shared institutional framework. The Government accordingly decided, when introducing the European Union (Notification of Withdrawal) Bill in the House of Commons on 26 January 2017, that the Bill also would also provide for the UK to leave Euratom.
156.The Nuclear Industry Association (NIA) told us that “the safety of the UK’s sites would not be affected by the UK government’s decision to leave Euratom—this is and always has been determined by UK legislation, regulation and regulatory policy and overseen by the Office for Nuclear Regulation”. The Office for Nuclear Regulation (ONR) confirmed that their analysis “has not identified significant direct impact on nuclear safety as a result of UK withdrawal from Euratom”. Thus there is no reason to believe that leaving Euratom will directly affect nuclear safety.
157.However, Euratom also underpins trade in nuclear materials, and Georgina Wright, Research Assistant and Co-ordinator, Europe, at Chatham House, identified a risk to the continuing operation of the UK’s nuclear power stations: “If the UK were to leave the EU without an agreement, a new non-proliferation regime and new agreements with nuclear fuel suppliers, it would bring the UK’s civil nuclear industry to a halt, because it would not be able to import fresh nuclear fuel.” According to Centrica, “Of all of the potential issues impacting UK security of supply, this would be the most material.” Ms Hepworth agreed: “We are going to need to negotiate a replacement agreement with Euratom covering things such as the ownership of nuclear material and our future trading relations with Europe in relation to nuclear materials.”
158.For the Government, Katrina McLeay, Head of Safeguards and Delivery in the Euratom Exit Team at BEIS, told us that “the key issues we have been looking at there are around the ownership of materials and equipment, and providing legal certainty about contracts that are in place. Those negotiations have been positive, broadly speaking.”
159.The Euratom Treaty is currently vital to the functioning of nuclear energy generation in the UK. Failure to replace its provisions by the point of withdrawal could result in the UK being unable to import nuclear materials, and have severe consequences for the UK’s energy security.
160.The Institute of Physics told us:
“[Article III of the international Treaty on the Non-Proliferation of Nuclear Weapons] requires signatories to ensure countries with which they trade comply with international safeguards … Currently, the UK meets its safeguarding requirements through Euratom, as Euratom provides safeguarding inspections for more than 100 UK facilities (including non-power-producing nuclear facilities).”
In 2014 here were “some 220 inspections, involving 1,000 person-days of Euratom effort”. The Institution of Chemical Engineers et al told us that “Equivalent arrangements will need to be made through the UK’s Office of Nuclear Regulation [sic] (ONR) to report to the International Atomic Energy Authority (IAEA)”. According to Chatham House and the University of Exeter, “This is the most urgent task facing the UK in terms of nuclear policy.”
161.The Institution of Mechanical Engineers highlighted the following key issues for establishing a UK Safeguards regime:
The Centre for Nuclear Engineering at Imperial College London also noted that “there is significant risk in the process of establishing and building a new bureaucracy to effectively manage this reporting and this risk is felt across industry”.
162.The Government’s intention is to transfer safeguarding duties to the ONR through the Nuclear Safeguards Bill, introduced in the House of Commons in October 2017. BEIS explained that the Bill “will allow the UK to maintain international standards for nuclear safeguards, applied to civil nuclear material, in line with our commitments to the International Atomic Energy Agency (IAEA) and under international nuclear non-proliferation treaties”. The Minister emphasised that “we are rushing this Bill through as quickly as we can … precisely so that there is no drop whatsoever in the standards of safeguards”. The joint report from the EU and UK Government on phase 1 of the Brexit negotiations also stated that the UK “is committed to a future regime that provides coverage and effectiveness equivalent to existing Euratom arrangements”.
163.Taking on these additional responsibilities will require a significant expansion of the resources available to the ONR. Dr Mina Golshan, Deputy Chief Inspector at the ONR, told us: “We currently have 10 staff in our safeguards function … We need another 12 to get to a level where we are able to provide the required reporting arrangements.” The ONR underlined that “depending on their previous experience we estimate it will take between 12 and 24 months to fully train a new safeguards inspector”. Dr Golshan concluded: “The biggest risk that I see [to establishing an IAEA-approved regime] is our ability to recruit.”
164.The Institution of Mechanical Engineers commented that the ONR “is a UK regulator governed by the department of Work and Pensions. In order for the IAEA to consider them a suitable Safeguards Office they will need to demonstrate independence.” The Minister told us: “the ONR is structured as an independent body—as many regulators are. It is not a wholly owned subsidiary of BEIS or any other department. It was set up specifically so that people would know that it was an independent regulator”. Ms McLeay confirmed this: “As far as we are aware, the International Atomic Energy Agency is happy for the ONR to fulfil the role of the SSAC.”
165.Ms McLeay emphasised that BEIS was “working very closely with the ONR to ensure that we meet our international obligations when we leave. We have made a commitment to reach Euratom standards.” The Minister confirmed that the Government was seeking “to go for the full safeguarding regime”, and was confident “that we can get that done in the time necessary”. Dr Golshan, however, was less confident: “To seek to replicate Euratom standards arrangements by the end of March 2019 will be highly challenging and, while we would work towards that, we want a starting point that allows the UK to meet its obligations.” Similarly, in its written evidence the ONR told us:
“Establishing a system that seeks to replicate all aspects of the current Euratom regime by March 2019 is unlikely to be achievable. A system that seeks to meet our international reporting obligations, and which can then be further developed over time is a more realistic starting point and is what we are aiming to achieve by March 2019.”
166.In order to maintain energy security it will be crucial to establish a domestic safeguarding regime that satisfies International Atomic Energy Agency (IAEA) requirements by the time the UK leaves Euratom. We are encouraged that both the Government and the Office for Nuclear Regulation (ONR) recognise the urgency of this and have taken steps to do so.
167.Euratom’s safeguarding standards are higher than those required by the UK’s international obligations. It will be difficult for the Government to deliver on its commitment to maintain Euratom’s standards at the point of withdrawal. The first priority should therefore be to ensure compliance with the UK’s IAEA obligations.
168.It will be challenging for the ONR to recruit and train sufficient safeguarding inspectors by the time the UK withdraws from the Euratom Treaty. We urge the Government to provide any support possible and to consider what contingency measures may be required.
169.The NIA explained that as part of Euratom, “the UK has access to a number of Nuclear Co-operation Agreements (NCAs) agreed on behalf of member states which has helped facilitate trade between the UK and a number of nuclear markets outside the EU”. As Ms Hepworth noted, “If there is not a Nuclear Cooperation Agreement in place between the US and another country, it is illegal for somebody in the US to export nuclear material or even share nuclear information with that country.”
170.Ms Hepworth noted that Euratom had nine NCAs at present: “Of those, the UK Government has identified four as top priority: the US, Canada, Japan and Australia.” The NIA identified China, Kazakhstan and South Korea as other key nuclear markets, while Centrica added South Africa, Ukraine and Uzbekistan. Dr Jenifer Baxter, Head of Energy and Environment at the Institution of Mechanical Engineers, informed us that “the UK and Euratom do not require an NCA to actually trade with each other.” She did, however, note that establishing an NCA with Euratom would provide “an opportunity to establish exactly how we are going to work with them in the future”.
171.As the Institute of Physics pointed out, before concluding its own NCAs, the UK will have to make “new arrangements to comply with the non-proliferation treaty”. Ms Hepworth agreed: “There is an interaction in the timescales for sorting out safeguards and being able to negotiate the Nuclear Cooperation Agreements.” She continued:
“Each of those countries will have its own ratification process. For example, if we look at the United States … the Nuclear Cooperation Agreement will have to be signed by the President. It will have to be laid before the House Committee on Foreign Affairs in the Senate and it will have to be laid before Congress. Each of those steps has a process and timescale associated with it.”
172.The UK will need to establish new Nuclear Cooperation Agreements (NCAs) in order to maintain its existing nuclear supply chains. The UK currently trades nuclear materials with many other countries: Government should prioritise developing new NCAs with those with which nuclear trade would otherwise be illegal, such as the US, Canada, Japan and Australia.
173.It is vital that the Government makes progress on developing new NCAs quickly. Given that these negotiations can only begin after the UK has satisfied the IAEA with regard to its safeguarding regime, it is essential for the Government to reach an agreement with the IAEA as soon as possible.
174.The NIA argued that the UK had benefited from “the common nuclear market created by the Euratom Treaty … [which] allows for the movement of nuclear information, services, skills and goods”. RWE agreed that “UK withdrawal from Euratom poses a severe risk to the free movement of goods and skills within the nuclear sector”.
175.Illustrating this point, Chatham House and the University of Exeter noted: “Outside of Euratom, the UK would no longer be a member of the Euratom Supply Agency”, without which, as the Institution of Mechanical Engineers explained, “the UK nuclear industry risks not being able to procure items from small PPE [personal protective equipment] kit to large complex parts in time and for reasonable cost”. They added: “Manufacturing of parts for nuclear facilities is conducted across Europe, and new tariffs and procurement procedures could make this more costly.” Ms Hepworth gave the example of Hinkley Point: “Components for the fuel-handling system are due to come from the US and components for the nuclear steam supply system are due to come from Japan. We need the ability to move these components into the country in a timely way in order to be able to deliver the project.” Dr Baxter agreed that: “having access to components that are manufactured in Europe is vital for the industry”.
177.As the NIA told us, “Euratom also oversees a framework for international collaboration in nuclear R&D”. Citing the 2017 Civil Nuclear R&D Landscape Survey, the Nuclear Innovation and Research Office (NIRO) informed us that “total funding for [civil] nuclear fusion and fission research [in 2015/16] was £217m, of which overseas funding contributed around £54m, or 25%. The majority of overseas funding originated from the EU (£47m).” They continued:
“EU research funding enables investments in both UK expertise and facilities. It also gives the UK nuclear community access to data generated from EU research facilities that are not available in the UK … The intangible benefits of the international collaboration include the nurturing and enhancement of the UK nuclear talent pipeline, the validation of UK research within the EU and International nuclear R&D community and UK influence on international R&D priorities and alignment with UK priorities.”
Chatham House and the University of Exeter believed, however, that “remaining part of Euratom’s research programme is possible, as demonstrated by Switzerland, which makes a financial contribution to take part in the EU and Euratom’s research programmes”.
178.Witnesses identified a number of specific programmes of nuclear research to which they wished to retain access post-Brexit, including the 7th Framework Programme and Horizon 2020-Euratom programme (which pay approximately £6.7m per year to UK participants), the Fusion 4 Energy programme (through which the UK supply chain has been awarded contracts worth €500m), the Generation IV reactor programme, and the EUROfusion consortium. The Institute of Physics noted: “The UK does not have any of its own civil research reactors … This makes UK access to European research reactors and the ability to access the results of the R&D that takes place there all the more important to nuclear fission research.”
179.The Institute of Physics also claimed that “The UK is a world leader in nuclear fusion research and its continued involvement in EU projects is vital for this to continue”. The key elements of this research, JET and ITER, are described in Box 9.
The Joint European Torus (JET), located at Culham, Oxfordshire, is Europe’s largest nuclear fusion device, enabling research into fusion power as an energy source. It is collectively used by more than 40 European laboratories. Its work is carried out within the framework of the EUROfusion Consortium, and it receives funding from the European Commission through the Euratom research and training programme.
JET’s successor will be ITER, the International Thermonuclear Experimental Reactor. It is currently under construction in France. Europe is funding nearly 46% of the construction costs, with the remaining costs being split between China, India, Japan, Korea, Russia and the US.
180.The Centre for Nuclear Engineering at Imperial College London was “especially concerned with the long-standing future of UK leadership with the Joint European Torus (JET) and the capitalisation on the cluster of expertise that has been built by our partners with the Culham Centre for Fusion Energy”. According to the NIA, “The UK Atomic Energy Authority receives £50m from Euratom each year to operate [JET] … and employs 500 skilled workers. The current contract runs until the end of 2018, but it was expected to be extended to 2020.” The Institute of Physics noted: “The UK has committed to funding its share of JET until 2020–21 but the EU still needs to agree to contribute its share of the funding for the project to continue beyond 2018.” Asked whether, in the absence of continuing EU funding, the Government would continue to fund JET, potentially beyond 2020, the Minister replied: “Yes. I think that it is fair to say that.”
181.The next stage of the fusion roadmap is ITER. As the Institute of Physics noted: “For the UK to continue to have involvement in ITER and remain a leader in nuclear fusion, a new multilateral cooperation agreement must be negotiated.” The Durham Energy Institute noted that membership of Euratom was not a pre-requisite for involvement with ITER, but argued that it would “take time to build nation state level institutes to continue British participation in the project and this will be to our disadvantage”.
182.The UK has benefited substantially from EU nuclear research programmes, contributing to its status as a world leader in nuclear research and development. It would be to the benefit of both the UK and the EU to maintain those research connections post-Brexit.
183.We welcome the Government’s commitment to continuing to fund nuclear research in the UK, whether or not EU funding is maintained. We recommend that the Government looks to maintain the post-Brexit viability of the Joint European Torus (JET), and ensures that the UK is able to participate in the International Thermonuclear Experimental Reactor (ITER) despite its withdrawal from Euratom.
184.A number of witnesses argued that “the best outcome for the nuclear industry in the UK and EU would be if the UK could remain within the Euratom Treaty”, while the CBI asserted that “the benefits of the UK’s membership of Euratom should be maintained, whether through continued membership or new arrangements”.
185.His Excellency Jean-Christophe Füeg, Head of International Energy Affairs at the Swiss Federal Office of Energy, noted that Switzerland was “an associate country for Euratom research and training, including ITER and fusion”. On that basis, the Institution of Mechanical Engineers suggested that becoming an associate member of Euratom could help to secure the continuation of the JET programme. Ms Hepworth, on the other hand, argued that while continued engagement on research and development would be “very beneficial”, it would “not address the key things we are concerned about around our ability to move fuel, components, information and personnel”.
186.The Institution of Mechanical Engineers told us that “there could be options to negotiate different associations for different purposes”. Energy UK concurred, stating “the Government should examine wider association possibilities”. It appeared from the Minister’s answer that the Government’s position is not yet settled: “It is not as if there is a pre-prepared associate membership option that we could elect to take. I cannot say directly that we would seek associate membership, because there is no definition of that.”
187.Given the challenges we have outlined, there is a strong case for putting in place contingency arrangements. However, as Dr Baxter pointed out, “There is not a shared Plan B from the Government at the moment about what will happen.”
188.The Institution of Mechanical Engineers told us: “It is essential that the UK develops a transitional framework that provides the same provision as Euratom before the deadline to leave both the EU and Euratom.” Ms Hepworth agreed: “If it appears to the UK Government that they cannot get all this done in time, absolutely they need to be thinking about whether there needs to be any kind of transitional arrangement, and we would look for clarity on that sooner rather than later.”
189.A form of associate membership of Euratom could be a means of maintaining nuclear research and development collaboration with the EU but, in the form currently held by Switzerland, it would not address the issues raised by the UK’s departure that are critical to energy security.
190.The risk posed to the UK’s energy security if the safeguarding measures currently provided by Euratom are not replaced in time means that there is a distinct need to avoid a cliff-edge in relation to Euratom. It is therefore crucial for the Government to ensure that contingency arrangements are in place and ready to be activated if required. The Government should engage with industry regarding such arrangements as early as possible, in order to reduce commercial uncertainty.
191.We also note that the United Kingdom’s membership of Euratom is legally distinct from its EU membership, and that in the Prime Minister’s Article 50 notification letter of 29 March 2017 a separate notification was made in respect of the United Kingdom’s withdrawal from Euratom. This suggests that separate transitional arrangements may also be possible, if they are needed in order to mitigate the risk of a cliff-edge. We therefore call on the Government to review and report to Parliament on the possibility of a Euratom-specific transition period separate from the wider Brexit process.
285 Written evidence from EDF Energy (), see also written evidence from BCC () and (Dr Jenifer Baxter).
286 Written evidence from Centrica ()
288 Written evidence from NIA ()
289 Supplementary written evidence from ONR ()
291 Written evidence from Centrica ()
294 Written evidence from IOP ()
295 Written evidence from IOP ()
296 Written evidence from Institution of Chemical Engineers et al (), see also NIA (), Energy UK (), EDF Energy () and (Angela Hepworth, Dr Mina Golshan).
297 Written evidence from Chatham House and University of Exeter ()
298 Written evidence from Institution of Mechanical Engineers ()
299 Written evidence from Centre for Nuclear Engineering at Imperial College London ()
300 Written evidence from BEIS ()
302 European Commission, ‘Joint report from the negotiators of the European Union and the United Kingdom Government on progress during phase 1 of negotiations under Article 50 TEU on the United Kingdom’s orderly withdrawal from the European Union’, 8 December 2017 para 89: [accessed 8 December 2017]
304 Supplementary written evidence from ONR ()
306 Written evidence from Institution of Mechanical Engineers ()
307 . The DWP/ONR Framework document is available from: Office for Nuclear Regulation, ‘DWP/ONR Framework document’ (2016): [accessed 9 January 2018]
308 . A State System of Accounting for and Control of nuclear material (SSAC) is required in order to comply with the IAEA’s safeguards system.
311 Supplementary written evidence from ONR ()
312 Written evidence from NIA ()
315 Written evidence from NIA ()
316 Written evidence from Centrica ()
319 Written evidence from IOP ()
322 Written evidence from NIA ()
323 Written evidence from RWE ()
324 Written evidence from Chatham House and University of Exeter ()
325 Written evidence from Institution of Mechanical Engineers ()
328 Written evidence from NIA ()
329 Written evidence from NIRO ()
330 Written evidence from NIRO (); see also written evidence from EDF Energy ().
331 Written evidence from Chatham House and University of Exeter ()
332 Written evidence from NIRO ()
333 Written evidence from NIA ()
334 Written evidence from Centre for Nuclear Engineering at Imperial College London ()
335 Supplementary written evidence from Institution of Mechanical Engineers ()
336 Written evidence from IOP ()
337 Written evidence from IOP (); see also (Angela Hepworth).
338 Written evidence from Centre for Nuclear Engineering at Imperial College London ()
339 Written evidence from NIA (); see also written evidence from NIRO (), (Georgina Wright), and (Dr Jenifer Baxter).
340 Written evidence from IOP ()
342 Written evidence from IOP ()
343 Written evidence from Durham Energy Institute ()
344 Written evidence from Energy UK (), see also written evidence from RWE (), EDF Energy ().
345 Written evidence from CBI ()
347 Written evidence from Institution of Mechanical Engineers ()
349 Supplementary written evidence from Institution of Mechanical Engineers ()
350 Written evidence from Energy UK ()
353 Written evidence from Institution of Mechanical Engineers ()
354 ; see also written evidence from Institution of Chemical Engineers et al (), Energy UK(), RWE (), and Centrica ().