The Europe agenda: Energy and climate

When the EU-UK Trade and Cooperation Agreement (TCA) was signed in 2020, climate action had broad political consensus on both sides of the Channel. Since then, the transition has slipped down the agenda as governments respond to inflationary pressures and heightened geopolitical risk. But this shift in the political context is exactly why UK-EU cooperation matters more now, not less. 

Shared concerns about lost competitiveness and the cost of living mean that progress on energy cooperation now visibly about more than hitting net zero targets. It is required to build energy systems that are cheaper and more secure. The UK’s goals are concrete: lower energy costs for households and industry, reduced exposure to volatile markets, and a faster, cheaper route to Clean Power 2030. A redefined relationship with Europe is the most direct path to these. 

The 2025 UK-EU reset set out a clear agenda on energy, centred on linking the two jurisdictions’ emissions trading schemes and electricity markets to reduce costs. With energy prices painfully high, the case for moving fast is stronger than ever. But as both sides get into the details, the hard questions are emerging. Dynamic alignment is complicated, and sustained price shocks have emboldened transition-sceptics in the EU. 

Delivering on the reset is a clear priority, but there are greater benefits that could be won with additional ambition. We propose an additional strategic goal, focussed on delivering a coordinated approach to energy security and vital clean tech supply chains.