Wopke Hoekstra, European commissioner for climate action, has confirmed that the European Union and the United Kingdom are set to begin negotiations next week on linking their respective emissions trading systems.
Speaking in an interview with Reuters, Hoekstra said the talks form part of a broader effort to reset relations following the UK’s 2016 exit from the EU. Both sides agreed in 2025 to pursue a linkage between their carbon markets, which would allow UK companies to avoid the EU’s Carbon Border Adjustment Mechanism.
Hoekstra described the prospect of an agreement as achievable, pointing to the UK’s long-standing climate policy efforts across different political administrations. He added that Brussels is ready for swift discussions, although no specific deadline has been set for concluding the negotiations.
CBAM pressure drives urgency for UK industry
UK industries have been pressing the government to accelerate talks, warning that CBAM could apply to around £7 billion worth of British exports to the EU if no linkage is in place. The UK government has reiterated its commitment to securing an agreement as soon as possible but has declined to comment on the precise timing of the negotiations.
Since the start of this month, the EU has begun applying CBAM-related carbon costs to imports of goods such as steel and cement. The mechanism is designed to equalize carbon costs between EU producers operating under the EU Emissions Trading System and foreign suppliers.
Limited exemptions without full linkage
While British electricity exports to the EU are expected to be exempt in principle, as UK power generators already face higher carbon costs than their EU counterparts, this exemption does not extend to other products. Steel, cement and other CBAM-covered goods will remain subject to the mechanism unless a full linkage between the EU and UK carbon markets is agreed.
As a result, the outcome of the forthcoming negotiations is seen as critical for UK exporters seeking to maintain competitiveness in the EU market under the new carbon pricing framework.
