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1h ago

UK and EU Near Temporary Fix to Shield Exporters From EU Carbon Border Tax

Officials are preparing short-term administrative steps to blunt the EU levy’s impact pending a negotiated link between the two carbon markets.

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Keir Starmer with President of the European Commission Ursula von der Leyen. Both sides will hold a second Brexit reset summit in May or June next year (Photo: Thierry Monasse/Getty)
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Overview

  • The EU’s carbon border adjustment mechanism is due to start on 1 January, with UK industry groups warning of roughly £800m in charges and higher household energy bills without relief.
  • Brussels and London are working on lawful technical workarounds because EU legislation leaves little scope for formal exemptions at this stage.
  • Northern Ireland poses an urgent complication due to its participation in the EU goods market and the risk of a new regulatory border on the island of Ireland.
  • Linking the UK and EU emissions trading systems remains the agreed long-term solution, but negotiations are expected to take months after the pledge made at May’s summit.
  • The UK government declined to give details on the talks, and a second UK–EU summit pencilled for May or June next year is expected to advance broader agreements.