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EU and UK near deal to link their carbon markets
A linked emissions market would let carbon permits trade across both systems and could spare manufacturers on both sides extra carbon border charges.
What happened
The European Union and the United Kingdom are in the final stages of a deal to link their emissions markets. Bloomberg The agreement would enable carbon permits to be traded across the two emissions systems. Bloomberg Negotiators have already settled details on emissions caps, supply controls and free permits, while the treatment of financial derivatives remains the only outstanding issue. Bloomberg The two sides are expected to announce the conclusion of negotiations to link their Emissions Trading Systems, allowing EU and British carbon allowances to be mutually recognized. Euronews The deal could also exempt goods originating in the EU and UK from their respective Carbon Border Adjustment Mechanisms. Euronews
Around it
The UK began its own cap-and-trade program after Brexit, almost six years before the agreement. Bloomberg Critics warn that closer alignment could drive up costs for British industry. Euronews The deal is expected to save companies millions of euros in carbon border taxes and boost market liquidity. Bloomberg
What comes next
The agreement is set to be announced at the EU-UK summit in Brussels on 20 November. Bloomberg+1
Sources
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- Photo: Politico Europe
Photo: Politico Europe
Photo: Politico Europe