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Upcoming Revisions to EU Carbon Pricing and UK Linkage

  • In May 2025, the UK and the EU reached an agreement to connect their respective Emissions Trading Schemes as part of a broader post-Brexit trade and regulatory arrangement.
  • This agreement arose from negotiations aiming to uphold UK manifesto commitments on market access, energy security, and avoiding EU tariffs on UK steel exports.
  • The linked ETS will cover sectors including electricity, industry, and waste, with plans to expand the UK ETS to the waste sector by 2028 amid calls for policy reviews.
  • Following the announcement, UK benchmark carbon prices surged by 8.4%, spurring concerns from industrial leaders like Sir Jim Ratcliffe about increased costs stifling green projects.
  • The linkage aims to create a larger carbon market that reduces emissions, protects UK exporters from EU carbon taxes, and signals a major post-Brexit shift in environmental policy cooperation.
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  • 40% of the sources lean Left, 40% of the sources are Center
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Bloomberg broke the news in United States on Monday, May 19, 2025.
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