Overview
- The EU’s carbon border adjustment mechanism takes effect on 1 January, while the UK’s own measure is planned for 2027, creating a timing gap that threatens new costs for British exports.
- Both sides are working on technical mechanisms viewed as likely to limit the levy’s impact on UK businesses, as a formal exemption is not permitted under EU law.
- Industry groups warn UK exporters could face roughly £800m in payments and that consumer energy bills could rise without an interim arrangement.
- Northern Ireland presents particular complications given its alignment with the EU single market for goods and the risk of a new regulatory border on the island.
- The talks form part of a wider Brexit reset that also includes expected UK participation in an EU rearmament fund by mid‑November and ongoing negotiations over a youth mobility scheme.