Linking the EU-UK carbon market: what the ETS agreement means for your company

In summary

The EU and the UK are expected to announce at their Brussels summit on 20 November 2026 that they have closed negotiations to link the EU Emissions Trading System (EU ETS) and the UK ETS. According to a draft summit statement published by Euronews, the linkage would allow for mutual recognition of EU and UK emission allowances and exempt products from both sides from their respective carbon border adjustment (CBAM) mechanisms, subject to each party’s laws and procedures. The EU CBAM applies in its final scheme from 1 January 2026; the UK CBAM starts on 1 January 2027. The agreement is yet to be ratified and the date on which the linkage will be operational has not been published.

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