A draft declaration prepared for the EU-UK summit in Brussels on November 20, 2026 says the two sides are nearing an agreement to link their emissions trading systems, which would exempt British goods from the EU Carbon Border Adjustment Mechanism.
The newsletter Rapporteur reported the draft on November 3, 2026, and Carbon Pulse and Carbon Herald relayed it.
Carbon Herald adds that the exemption would apply from January 1, 2026. Neither government nor the Commission has published or confirmed the text, and a draft can change before the summit. Today, UK-origin goods remain fully in scope of the EU CBAM.
What is reported
According to Carbon Pulse, citing Rapporteur, "the EU and UK are nearing an agreement to link their respective carbon markets, according to a draft declaration prepared ahead of a bilateral summit later this month".
Carbon Herald, also relying on Rapporteur's report, writes that the draft proposes exempting British goods from the EU CBAM retroactively from January 1, 2026, and that the exemption "has not yet become law". We could not read the Rapporteur article or the draft itself, so the back-dating rests on that one secondary account.
The report fits what was already public. POLITICO reported on October 7, 2026 that negotiators had agreed to link the two systems, citing people briefed on the talks.
On October 12, 2026 the Prime Minister told the House of Commons that "a deal on emissions trading" is on the table for the November 20 summit. Our summit preview of October 12 sets out that background.
What the law requires before UK goods are exempt
A political declaration does not exempt anything. Under Article 2(4) of Regulation (EU) 2023/956, goods leave the EU CBAM only when they originate in a country listed in point 1 of Annex III. The United Kingdom is not listed.
Article 2(6) allows a listing once an agreement has been concluded "fully linking the EU ETS and the emission trading system of that third country", with the carbon price effectively charged on the embedded emissions. The listing itself is a Commission delegated act under Article 2(11).
It enters into force only if neither the European Parliament nor the Council objects within two months, extendable by two more (Article 28(7)). So three steps stand between a declaration and an exemption: a concluded linking agreement, a delegated act, and the end of the objection period.
The back-dating question
No published legal mechanism lets an Annex III listing reach back to goods imported before it applies. Whether a delegated act can be written to cover all of 2026, and on what basis, depends on wording nobody has published.
In December 2025, Commissioner Wopke Hoekstra ruled out a waiver before the definitive period began and said an exemption was likely "the moment we will be fully linking those two", which points to the date of the link rather than a date in the past.
The calendar makes the question practical rather than theoretical. Imports made in 2026 are declared for the first time by September 30, 2027, and the certificates for them go on sale on February 1, 2027 (Articles 6(1) and 20(1)).
An exemption that took effect before those dates and covered 2026 would spare importers of UK goods both the purchase and the surrender. One that applies only from the date of the link would not.
The UK side
The UK CBAM, a tax that starts on January 1, 2027, also needs its own legal step. Section 156 of the Finance Act 2026 lets the Treasury make regulations excluding goods from a territory with a linked emissions trading scheme, and section 157 requires the House of Commons to approve a draft first.
We found no such draft on legislation.gov.uk on November 5, 2026, and HMRC's policy summary still stated on that day: "There are currently no jurisdictions exempt from CBAM." How the two regimes would interact under a link is covered in our UK-EU ETS linkage guide.
The trade at stake
The EU imported EUR 7.28 billion of CBAM-covered goods from the United Kingdom in 2025, 6.5 percent of extra-EU imports by value and the third-largest origin after China and Türkiye (Eurostat Comext DS-045409, 2025).
Iron and steel accounted for EUR 4.37 billion, aluminium for EUR 1.58 billion and electricity for EUR 1.16 billion. These are trade statistics, not CBAM declarations.
What importers should do now
Nothing in the law has changed, so the safe course is to treat UK-origin goods as in scope for 2026:
- Keep collecting embedded-emissions data from UK suppliers, or plan to declare on default values.
- Keep proof of non-preferential origin for each UK consignment, because any exemption will turn on origin, not on the shipping route.
- Count UK goods towards the 50-tonne threshold under Article 2a until an exemption is actually in force.
- Watch the summit on November 20. The question to read in the final text is not whether a link is agreed but when an exemption would apply and to which imports.
We will update this page after the summit. Importers who want help planning for either outcome can ask for a free introduction to a provider through our request page.
Sources
The draft is reported by Rapporteur (November 3, 2026), as relayed by Carbon Pulse and Carbon Herald. Commissioner Hoekstra's December 2025 remarks are reported by S&P Global. The Council authorised the linking negotiations on November 13, 2025. The Finance Act 2026 powers are in section 156, and HMRC's position is in its CBAM policy summary.
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