Commonalities and Differences Between the EU ETS 1 and the UK ETS: Considerations for Linking

Summary

The core challenge addressed is how to ensure effective climate mitigation and reduce trade barriers between the EU and UK post-Brexit, given the potential divergence of their respective Emissions Trading Systems (ETSs). The approach involves negotiating a legally binding international treaty to formally link the EU ETS and UK ETS, aiming to create a larger, more efficient carbon market, enhance cost-effectiveness of abatement, and address carbon leakage. Negotiations for this linking agreement commenced in early 2026, building upon a Common Understanding reached in May 2025.

Key Facts

Source Document

https://example-government.gov/policy-document-link