UK votes to leave the EU, Prime Minister Cameron to resign

By Erin Voegele | June 24, 2016

The U.K. has voted to leave the European Union and Prime Minister David Cameron has announced his intention to resign. The referendum, known as the Brexit, was held June 23, with 51.9 percent voting to leave the EU and 48.1 percent voting to stay in the political-economic union. Nina Skorupska of the U.K. Renewable Energy Association said the U.K.’s decision “raises serious questions for investor certainty, energy security and much needed investment in U.K. energy infrastructure.”

Cameron had advocated against leaving the EU. “I was absolutely clear about my belief that Britain is stronger, safer and better off inside the European Union, and I made clear the referendum was about this and this alone—not the future of any single politician, including myself,” he said in a statement issued following the vote. “But the British people have made a very clear decision to take a different path, and as such I think the country requires fresh leadership to take it in this direction. I will do everything I can as Prime Minister to steady the ship over the coming weeks and months, but I do not think it would be right for me to try to be the captain that steers our country to its next destination.”

While Cameron offered no specific timetable for his resignation, he did indicate he aims to have a new prime minister in place by October. He will, however, remain as prime minister for the next three months. Negotiations with the EU will begin under the new prime minister, he said, noting he or she will make the decision when to trigger Article 50 and start the formal and legal process of leaving the EU.

Reacting to news of the vote, Skorupska stressed energy policy must be a priority for the government now, with industry needing reassurance and ministerial clarity on priorities. “The first in this list must be confirmation of the 5th carbon budget, which will hopefully give some confidence in the long-term direction of U.K. energy policy,” she said. “The vast majority of our members had fears of Brexit, and we will be consulting with them and government in the coming weeks to set out a plan for continued low carbon energy investment, deployment and assurance of the 117,000 jobs in this sector."

Changes in U.K. energy policy could impact U.S. pellet producers. According to data recently released by Wood Resources International LLC in its North American Wood Fiver Review, North American pellet exports set a new record in 2015, reaching 1.7 million tons. Exports from the U.S. South industrial pellet sector all flow to Europe, primarily the U.K. 

Drax is a top consumer of U.S. pellet exports. In January, the European Commission announced the opening of an in-depth investigation to assess whether the U.K.’s plans to support the conversion of an additional unit to biomass are in line with EU state aid rules. No specific information has yet been released by Drax or the U.K. on how the Brexit vote could impact that investigation. However, Drax is expected to continue its biomass conversion initiatives.