The UK’s new National Security and Investment Act (NSIA) entered into force on January 4, 2022. The NSIA marks a considerable change in the UK’s investment screening powers and adds to an increasingly complex European and global landscape of investment regulation (or FDI) filings necessary for the execution of M&A and other transactions.

The Act

The Background

In 1998, the UK and The Republic of Ireland signed the Good Friday Agreement (GFA) bringing to an end 30 years of conflict in N Ireland.  The GFA was possible at least in part because both the UK and Ireland were Member States of the EU, meaning there were no external borders to the EU or the UK in Ireland and enabling EU Law to provide a legal framework.

The GFA, strongly supported by the US and the EU, relied at its core, on mutual acceptance – S Ireland and Irish Nationalists accepted that N. Ireland was part of the UK and the UK agreed to remove physical security infrastructure on the N/S Ireland Border.

The issue of borders is at once problematic and emblematic, with the Unionist community feeling strongly that N. Ireland is part of the UK and the Nationalist community objecting to a N/S Ireland border as a physical barrier to their long-terms hopes of Irish reunification. The GFA accordingly struck a careful crafted and very delicate balance between the two communities.

Brexit…

Brexit upset that delicate balance.  The Nationalist community largely voted Remain, whilst the Unionist community largely voted Leave.  N. Ireland overall voted to remain in the EU.  The UK’s departure from the EU meant that the N/S Ireland border became not only the border between Ireland and the UK, but the only land border between the mainland UK and the EU.

To preserve the benefits of the GFA whilst protecting the EU’s Single Market, the UK and the EU agreed the Northern Ireland Protocol (NIP), which preserved the Common Travel Area between the UK and Ireland and left N. Ireland in the UK’s Customs Union, but the EU’s Single Market – effectively placing the UK/EU border for Customs Controls in the N Sea between GB and N. Ireland for goods ‘at risk’ of entering the EU via N. Ireland. This arrangement avoided a ‘hard border’ between N and S Ireland and meant that N. Ireland was the only part of the UK to benefit from being in both Unions at the same time.

What has happened since January 2020?

The immediate consequences both of Brexit itself and the NIP are an increase in trade between N. and S. Ireland and a reduction in trade between Ireland and the UK as EU produce (inbound and outbound) has increasingly been dispatched by sea direct from S. Ireland to the European Mainland, by-passing the UK which had been used as a land-bridge for Irish exports whilst the UK was in the EU.

These two changes have raised concerns amongst the Unionist community that the longer-term impact of Brexit and of the NIP is to increase the chances of a United Ireland (the GFA allowed for the possibility of a Border Poll should communities so wish). This concern, added to the number of checks on GB/N Ireland exports, has led to a deterioration in security in N Ireland.  It is against this complicated backdrop that the EU and the UK are seeking to tweak the NIP to facilitate trade between GB and N. Ireland and reduce the number of customs checks carried out on that border.

Article 16….

Buried in the midst of the NIP is the now infamous Article 16 which states at paragraph 1 “If the application of this Protocol leads to serious economic, societal or environmental difficulties that are liable to persist, or to diversion of trade… [one side]… may unilaterally take appropriate safeguard measures”.  Paragraph 2 notes “If a safeguard measure taken…. in accordance with paragraph 1 creates an imbalance between the rights and obligations under this Protocol, the [other side] may take such proportionate rebalancing measures as are strictly necessary to remedy the imbalance.”

UK Complaints

The UK is concerned that the application of the NIP has imposed significant new customs formalities on GB-N. Ireland exporters, resulting in extra costs and discouraging trade.  Under the NIP, after a series of grace periods, the UK was supposed to gradually bring in checks on a broadening range of goods and products exported from GB to N. Ireland.  However, as the impact of those checks became clear, the UK took the decision to unilaterally suspend them.

Of particular concern to the UK government are:
Continue Reading The EU, The UK and The Northern Ireland Protocol (again!)

I.  Introduction: the Scottish Government’s Draft Hydrogen Action Plan

On the 10th of November 2021, the Scottish Government published its Draft Hydrogen Action Plan (the “Plan”), as a companion document to its December 2020 Hydrogen Policy Statement.

The Plan sets out the Scottish Government’s detailed proposals for the Hydrogen industry in Scotland

On 19 October, alongside a number of other important strategy documents (over 2,000 pages in total), the UK Government published its ‘Net-Zero Strategy’ (NZS) which will help achieve the UK’s interim five yearly carbon targets leading up to net-zero by 2050.

The NZS focuses on eight key areas with priorities and policies set out under each area:

1) The Power Sector

The NZS sets out the UK Government’s ambition that the power sector will be fully decarbonised by 2035 (with the caveat that this will be subject to security of supply). The focus is on domestically-generated renewable electricity to create a power system based on a mix of renewables, new nuclear power stations, flexible storage, gas with CCS and hydrogen.

Specifically, the NZS undertakes to:

  • Secure FID on a large-scale nuclear plant by the end of this Parliament;
  • Launch a new £120 million Future Nuclear Enabling Fund.
  • Create 40GW of offshore wind by 2030.
  • Create up to one of floating offshore wind by 2030 .
  • Deploy new measures to help smooth out future price spikes.

2) Fuel Supply & Hydrogen

The NZS re-states the ambition that the UK will deliver 5 GW of hydrogen production capacity by 2030.  The UK will at the same time halve emissions from oil and gas and increase the production of biofuels.

Specifically, the NZS undertakes to:

  • Provide up to £140 million to establish the Industrial Decarbonisation and Hydrogen Revenue Support (IDHRS) scheme, with a target of creating up to 250MW of green hydrogen production capacity in 2023.
  • Introduce a climate compatibility checkpoint for future licensing on the UK Continental Shelf.
  • Regulate the oil and gas sector in a way that minimises greenhouse gases through the revised Oil and Gas Authority Strategy.

3) Industry

The NZS commits the UK to creating four carbon capture usage and storage (CCUS) clusters by 2030.  The UK will support a ‘deep decarbonisation of industry’ through carbon pricing and the creation of low carbon industry clusters, which would have access to Government support under the CCS Infrastructure Fund and revenue support mechanisms.

Specifically, the NZS undertakes to:

  • Accelerate the development of the Hynet and East Coast Clusters to capture 20-30 MtCO2 per year by 2030.
  • Create a ‘reserve cluster’ of Teesside and the Humber, Merseyside, North Wales and the North East of Scotland.
  • Use the Industrial Energy Transformation Fund to future-proof industrial sectors.
  • Consult on a net zero consistent UK ETS cap to incentivise cost-effective abatement in industry.

4) Heat and Buildings

The NZS creates a pathway to ensuring that from 2035 all new heating appliances in homes and workplaces are low carbon and sets 2026 as the date for a decision on the role of Hydrogen in heating. The Government will seek to reduce electricity costs and to rebalance energy levies (such as RO and FiTs) and obligations (such ECO) away from electricity to gas.

Specifically, the NZS undertakes to:

  • Prevent the sale of new gas boilers beyond 2035.
  • A Boiler Upgrade Scheme will incentivize the swap-out of domestic gas boilers.
  • Create a new Heat Pump Ready programme to provide funding for heat pump technologies with a target of 600,000 installations a year by 2028.
  • Rebalance policy costs from electricity bills to gas bills.
  • Fund the Social Housing Decarbonisation Scheme and Home Upgrade Grants and decarbonise public sector buildings by 75% by 2037.
  • Launch a Hydrogen Village trial to inform a decision on the role of hydrogen in the heating system by 2026.
  • Consider mandatory disclosure requirements for mortgage lenders on the energy performance of homes in their portfolios (UK housing stock generates a 20% of carbon dioxide emissions).
    Continue Reading The UK’s Net Zero Strategy

On 12 October the House of Commons Science & Technology and Health and Social Care Committees published their report into the UK Government’s handling of the Coronavirus Pandemic (the Report).

The Report focused on six main areas

  • the UK’s pandemic preparedness;
  • the use of border controls, social distancing and lockdowns to control the pandemic;
  • the

On 22 September 2021, the UK Government published its 10-year strategy on artificial intelligence (“AI”; the “UK AI Strategy”).

The UK AI Strategy has three main pillars: (1) investing and planning for the long-term requirements of the UK’s AI ecosystem; (2) supporting the transition to an AI-enabled economy across all sectors and regions

On 26 August 2021, the UK Government unveiled a package of announcements which effectively set out its post-Brexit data strategy.

This blog looks at the politics around the costs and benefits of a Brexit divergence dividend in this sector, which the UK Government views as a key area of competitive advantage.

High-Level Content of the

In December 2020, the UK PM set out an ambitious 10 Point Plan for a green industrial revolution, one of the key points of which was the production of 5 GW of low carbon hydrogen in the UK by 2030.  The Plan envisaged hydrogen playing a key role in decarbonising energy-intensive industries and heavy transport and replacing natural gas in domestic heating.

On 17 August the UK Government published its Hydrogen Strategy (together with a number of associated Consultations), which lays the foundations for the UK’s future hydrogen economy and sets out how the UK Government will support innovation and stimulate investment in low carbon hydrogen to meet its 5GW target.

The Hydrogen Strategy is one of a series of strategies the UK government is publishing ahead of the COP26. The UK government has already published its Industrial Decarbonisation Strategy, Transport Decarbonisation Strategy and North Sea Transition Deal and plans to publish its Heat and Buildings and Net Zero Strategies, as well as Number 10’s overarching Net Zero Strategy later this year.

The Hydrogen Strategy

The Strategy is honest about the scale of the challenge and acknowledges that producing 5 GW of hydrogen by 2030 will require rapid and significant scale-up in domestic low carbon hydrogen production. The Strategy also notes the urgent need for a public awareness campaign to overcome consumer concerns about safety.

The Strategy is divided into five main parts:

  • The case for low carbon hydrogen: how it is produced and used; its potential role in meeting net zero; and opportunities for UK firms.
  • A whole-systems approach to the UK hydrogen economy: the roadmap to 2030; the actions needed to develop each element of the hydrogen value chain to reach the 2030 target, Carbon Budget Six and net zero; the market and regulatory frameworks the UK will need to develop a hydrogen market by 2030.
  • The economic opportunities: how the UK will use hydrogen to create jobs in sustainable supply chains; improve research and innovation to accelerate cost reduction and technology deployment; and maximise future hydrogen export opportunities.
  • International collaboration with other countries to support the global transition to net zero.
  • Monitoring and evaluation: how the UK will monitor its progress to ensure it meets the objectives set out in the first two chapters.


Continue Reading Hydrogen in The UK

Lobbying.  The descriptor we use for seeking to influence key decision makers. It’s been a part of commercial life for centuries and many societal structures were and are built on it such as the medieval guilds, modern trade associations, and a myriad of other bodies who exist to influence, persuade and argue.  Law firms too. 

The 1998 Good Friday Agreement (also known as the Belfast Agreement), which brought to an end three decades of inter-communal violence, also heralded the advent of 23 years of increased cross-border trade and cooperation as well as an increase in Irish exports to the UK.  That ease of access and trade was facilitated by the