The UK may conclude an agreement with the EU on exemption from CBAM – The Guardian

The parties are currently considering a temporary agreement as a possibility

The EU and the UK may conclude an agreement that will exempt British businesses from the carbon tax at the border under CBAM. This was reported by The Guardian.

The UK is introducing its own version of the cross-border carbon adjustment mechanism, but not before 2027. The government is seeking a temporary exemption from the European tax until the parties agree on their schemes.

According to the publication, the European Union and the UK are working on mechanisms that will protect British exporters from the impact of carbon duties, and a temporary agreement is now considered likely by both sides. It could be concluded before the upcoming bilateral summit, which is scheduled for May or June 2026.

British businesses are concerned about the impact of CBAM and the prospect that cheap goods intended for the EU market, such as Chinese steel, will flood the UK market.

Naomi Smith, executive director of Best for Britain, which has been campaigning for this move since May 2023, noted that some of Britain’s largest international investors warn that differences between the parties on carbon taxes could cost jobs and investment.

“This sensible move will reduce costs and administration for businesses in the EU and the UK, while helping to stimulate British economic growth,” she explained.

Smith believes that the government should work with its European allies to fully harmonize its own carbon taxation regime and secure these benefits in the long term.

It should be recalled that at the end of April, the British government published draft primary legislation on the cross-border carbon adjustment mechanism for technical consultation, which ended on July 3. The country’s updated CBAM policy, which provides an overview of its scope and structure, has also been published.