The European Union and the United Kingdom are set to announce the conclusion of negotiations to link their carbon markets at their summit in Brussels on 20 November, according to a draft summit document seen by Euronews and reported on Friday. Linking the EU Emissions Trading System with its UK counterpart would let carbon allowances from each side be recognised in the other — and would pave the way for EU and UK goods to be exempted from each other's carbon border charges.

Source: Euronews, Nov 6

'We welcome the conclusion of the negotiations on linking the EU's and the UK's ETS agreement. This would allow mutual recognition of EU and UK allowances and exempt EU and UK goods from respective CBAM subject to respective laws and procedures that we plan to launch without delays,' the draft reads. Euronews notes the text could still change before publication.

Source: Draft summit document, quoted by Euronews, Nov 6

EUR 7.28 billionof CBAM-covered goods the EU imported from the UK in 2025 — yaani 7.28 billion euro, over 728 crore euro (Eurostat)
EUR 4.37 billionof that was iron and steel alone (Eurostat)
~GBP 800 million a yearUK government estimate of the cost of CBAM friction without a link — yaani about 80 crore pounds a year
EUR 82.32the EU CBAM certificate price per tonne of CO2 in Q3 2026

Why the link matters: the border carbon charges

The EU's Carbon Border Adjustment Mechanism (CBAM) has applied in full since 1 January 2026, charging importers for the carbon embedded in goods such as steel, while Britain plans to start its own CBAM in January 2027. Without a link, UK exporters stay inside the EU charge and EU exporters face the British one. A leaked draft reported by Carbon Herald on 3 November proposed going further: exempting UK-origin goods from the EU levy retroactively to 1 January 2026, provided the two carbon markets are formally linked and the UK runs an effective carbon price, as Article 2(6) of the CBAM Regulation requires.

Source: Carbon Herald via MainStreet, Nov 3; Euronews, Nov 6

The carbon link is one of three deals negotiators have been racing to finish as a package for the 20 November summit, alongside the food-trade (SPS) agreement and a youth experience scheme. EU Trade Commissioner Maros Sefcovic told the European Parliament in October that the aim was to complete all three for the summit, while talks on Britain joining the EU electricity market and on a British financial contribution would continue beyond it.

Source: EU Perspectives, Oct 20

What is solid

  • A draft summit declaration welcoming the conclusion of the ETS-link negotiations exists and was seen by Euronews (Nov 6)
  • The EU-UK summit takes place in Brussels on 20 November, with ETS linkage, the food deal and youth mobility as the target package
  • EU CBAM has applied in full since 1 January 2026; the UK's own CBAM is scheduled for January 2027
  • Negotiators were reported by POLITICO to have reached agreement in principle on ETS linkage on 7 October

What is only claimed

  • Nothing has been signed or published: the draft can still change, and neither side has released an agreement text
  • A CBAM exemption is not automatic — the EU needs a delegated act listing the UK, and the UK needs Treasury regulations approved by Parliament
  • On the Switzerland precedent, a signed link can take more than two years to take effect, so traders are advised to plan for CBAM applying until a link is in force

The legal path underlines the caution: on the EU side, exempting the UK requires a Commission delegated act adding it to the CBAM annex of exempt countries; on the UK side, Treasury regulations under the Finance Act 2026 must pass the House of Commons. HM Revenue and Customs confirmed in September that no jurisdiction is currently exempt from the UK charge. The draft declaration's promise to launch the procedures 'without delays' is therefore a political commitment, not yet relief at the border.

Source: Logistics Edge ETS linkage tracker, updated Nov 2026

What happens next

All eyes are on Brussels on 20 November: if leaders announce the ETS link alongside the food deal and youth scheme, the work moves to the EU delegated act and UK regulations, with the proposed CBAM exemption backdated to 1 January 2026 still to be confirmed in law. Until a link is signed, legislated and operating, exporters on both sides — including the steel trade worth EUR 4.37 billion a year — keep paying and reporting under CBAM as it stands.