EU countries, under the lead of European Union ambassadors, unanimously approved a mandate to start negotiations with the United Kingdom on linking their respective carbon-market systems. The deal would allow the two parties to exempt each other from their carbon-border levies.

Despite the agreement, the linkage is unlikely to be ready in time for UK firms to avoid the EU’s levy on imports of steel, cement, and other goods from January. Technical complexity means the actual market linkage will take several years to implement. 

The UK government estimates the fee would cost its companies about 800 million pounds annually. Meanwhile, the UK will launch its own carbon-border levy starting in 2027, a year after the EU’s regime.