The summit’s joint understanding placed strong emphasis on enhancing electricity market cooperation, including the potential for UK participation in the EU’s internal electricity market and associated trading platforms . This marks the most constructive UK–EU energy dialogue since Brexit and demonstrates a renewed political will to collaborate on climate and energy matters.

Although not explicitly addressed in the summit’s communiqué, the improved political climate and renewed focus on energy cooperation suggest that progress on GO-REGO recognition is more plausible than it has been until recently.

Market impact

Should there be political agreement on bilateral GO–REGO recognition, most of the technical foundations are already in place, owing to the UK’s historical integration with the EU energy market. A formal agreement on certificate recognition would represent a meaningful step forward.

However, structural barriers are likely to persist even if such an agreement materialises. Crucially, the UK was not a member of the Association of Issuing Bodies (AIB), even when it was part of the EU — and it is unlikely to become one post-recognition. As a result, bilateral recognition would likely face limitations and continued trade frictions.

Given the higher price of REGOs and the likelihood that many AIB countries will continue restricting imports from non-AIB registries, any recognition arrangement would likely result mostly in a one-way flow of certificates, with EU GOs entering the UK market. However, the UK is unlikely to reinstate levy exemptions for EU GOs under schemes like Contracts for Difference (CfD) and Feed-in Tariffs (FiT), which reduces the financial incentive for GO imports.

In the past, if imported EU GOs met certain criteria, the associated electricity supply was classified as green excluded electricity. This classification allowed UK suppliers to claim exemptions from the Contracts for Difference (CfD) and Feed-in Tariff (FiT) levies — charges that applied to all other electricity supplies.

Moreover, UK demand for green certificates has eased and adjusted down, since REGO prices surged following the end of EU GO imports. The price gap between REGOs and EU GOs has narrowed, further weakening the economic rationale for importing EU GOs. As a result, the scale of UK imports may remain limited compared to pre-Brexit levels.

That said, we still expect bilateral recognition to support some level of resumed trade — and while the market impact may be limited, it could help further narrow down the price differential between REGOs and EU GOs. We are currently factoring this scenario into our long-term GO and REGO price models and will share our analysis in due course.

A return to mutual recognition — even if limited — would be a welcome development. It could improve market liquidity, provide greater pricing certainty, and reduce the price volatility seen in the REGO market in recent years. Ultimately, it would represent a step towards more efficient and integrated certificate markets on both sides of the Channel.