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UK wants to avoid CBAM

Anna Velyka

According to stakeholders, this mechanism threatens the kingdom's climate policy

The new UK Labor government is looking for ways to circumvent the CBAM. One of the possible options is to combine the British emissions trading system (ETS) with the European one.

This is reported by the Ministry of Industry and Trade with reference to the Argus.

Delegates at the recent Carbon Forward conference in London said that the inability to avoid applying CBAM, the EU's cross-border carbon adjustment mechanism, to the UK would mean abandoning the kingdom's climate policy, the publication reports.

Alistair McGuire, head of policy and advocacy at SSE, said that the application of CBAM would be “politically toxic” in the UK. Among the problems, he mentioned trade disputes, political problems regarding Ireland, and the need for British exporters to actually pay into the EU budget.

"If CBAM is applied to Great Britain, we will be defeated in climate policy," McGirr is sure.

In his opinion, the EU's cross-border carbon adjustment mechanism could be a "useful whip" to encourage the kingdom to join its ETS to the EU system, as such a move would exempt the country from CBAM action.

McGirr hopes that a merger agreement can be concluded before the introduction of the EU mechanism in 2026, and the merger itself will be operational by 2028.

He said that while the newly elected Labor government had not yet confirmed that it intended to merge the systems, it already felt more comfortable working with the EU than the previous Conservative leadership.

Earlier, EcoPolitic wrote that according to stakeholders, Ukraine should negotiate now with the EU on the postponement of CBAM. We also talked about how EU companies are preparing to full CBAM in 2026.

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Unfortunately, there was no constructive dialog

Ministry of Economy is preparing a request to the European Commission to postpone CBAM for Ukraine – Kachka
Ministry of Economy is preparing a request to the European Commission to postpone CBAM for Ukraine – Kachka

Last summer, Ukrainian industry groups called on the authorities to ask the EU to apply the CBAM approach only to reporting for Ukraine during martial law and early reconstruction

European Parliament supports the European Commission's proposal to simplify CBAM
European Parliament supports the European Commission's proposal to simplify CBAM

The next stage is negotiations with the EU Council

EU and UK agree to combine their own ETSs
EU and UK agree to combine their own ETSs

This is a key step in post-Brexit climate cooperation