The EU and the UK begin negotiations on merging carbon markets

The European Union and the United Kingdom will begin negotiations next week on integrating their carbon emissions trading systems. This was announced by EU Climate Commissioner Wopke Hoekstra in an interview with Reuters.

The parties agreed on this step last year as part of a “reset” of relations after Brexit. It will allow British companies to avoid the European carbon tax under the CBAM, which could affect British exports to the bloc worth £7 billion.

«The UK has done an excellent job on climate action for many years and across all political spheres. So, in my opinion, this is definitely possible,» Huxtra commented on the topic of carbon market integration.

According to him, Brussels is ready for “quick” negotiations, but the European Commissioner for Climate Action declined to say whether the bloc is seeking to reach an agreement by a certain date.

British industry had hoped to receive a temporary exemption from the CBAM while negotiations on carbon market integration are ongoing. However, Brussels has stated that it cannot offer this until the link is complete.

According to the EC, British electricity exports to the EU should not face these costs in principle, as the UK’s energy system is already sufficiently decarbonized. However, this does not apply to other goods, such as steel.

It should be noted that British manufacturers will face a lot of paperwork regarding exports to the EU from the beginning of 2026. Exporters will have to complete detailed paperwork, which will repeat Brexit, when businesses were burdened with documentation regarding customs and product standards.