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World risk · Trade, tariffs and sanctions

The UK carbon border tax starts in January 2027 with no UK-EU carbon market link signed

The test On 1 Jan 2027, when the UK carbon border adjustment mechanism starts, no agreement linking the UK and EU emissions trading systems has been signed.

Not under way · Confidence: medium · Reviewed 3 Nov 2026 · Scores from 1 to 10

This page answers: What could happen, how it is scored, and who is exposed?

Using this page
  1. Read the two scores: Likelihood and Impact are kept apart.
  2. Check what is happening, each fact with its source.
  3. Use the calendar for the dates to watch.

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Likelihood
5Elevated steady this month
Impact
4Elevated steady this month
Breadth4
Depth2
Duration5
Hard to substitute4
Canada pointNot added0

Impact is the average of the four parts, rounded, plus one point when Canada is directly hit on two or more channels, up to 10.

Two separate scales from 1 to 10. Strature never multiplies or merges them.

What changed

Dated, newest first

  1. Joint declaration expected at the 20 Nov summit [5]
  2. PM Burnham, 12 Oct 2026: summit in Brussels on 20 Nov; a deal on emissions trading on the table [4]

Why it matters

The UK and EU agreed in May 2025 to work towards linking their carbon markets, and talks began in January 2026. The UK's carbon border tax starts on 1 Jan 2027. Prime Minister Andy Burnham told Parliament on 12 Oct that a deal on emissions trading is on the table for the UK-EU summit in Brussels on 20 Nov. No signature had been reported by 3 Nov.

Why Likelihood 5 Pushes: no signature target; a summit deal may not mean a signature; scope open. Brakes: both sides committed; 20 Nov summit with the link on the table. Sources on each side: open contest, 5.

The other facts on file (4)
  • May 2025 summit: agreement to work towards linking the UK and EU ETS [1] (19 May 2025)
  • Talks to start the week after 15 Jan 2026; no target date; no temporary CBAM exemption until the link is complete [2] (15 Jan 2026)
  • UK CBAM comes into effect on 1 Jan 2027 [3] (9 Sep 2026)
  • UK firms could face up to £800m in EU CBAM charges by 2030; mutual exemption only once the agreement enters into force through legislation; summit postponed until after the summer [1] (20 Jul 2026)

Where it sits

UNITED KINGDOMIRELANDNETHERLANDSBELGIUM11. The UK carbon border tax starts in January 2027 with no UK-EU carbon market link signed: Elevated impact · possible (placed at the country)1 No UK-EU carbon linkby JanuaryElevated impact · possibleNO UK-EU CARBON LINK BY JANUARY0300 kmat 54°NMap data: Natural Earth (public domain).
UNITED KINGDOMIRELANDBELGIUM11. The UK carbon border tax starts in January 2027 with no UK-EU carbon market link signed: Elevated impact · possible (placed at the country)1 No UK-EU carbonlink by JanuaryNO UK-EU CARBON LINK BY JANUARY0300 kmat 54°NMap data: Natural Earth (public domain).

How it spreads

Sample, no data on file. No cited flows by country on file for this risk.

If

On 1 Jan 2027, when the UK carbon border adjustment mechanism starts, no agreement linking the UK and EU emissions trading systems has been signed.

Not under way

Channels 3 on the card

  1. CanadaNo Canadian loss sourced.
  2. TradeUK steel, aluminium, fertiliser and cement exporters keep paying EU carbon charges and paperwork [1][2].
  3. RegulationEU exporters to the UK start facing UK charges from January [1][3].

Goods 1

Sectors 2

  • Mining and metals
  • Energy and pipelines

Countries 2

Who is exposed

No figure on file: United Kingdom, European Union.

Sectors
Mining and metals, Energy and pipelines
Goods
Aluminium

Three scenarios and their signposts

  1. S1

    Signed in time

    The 20 Nov summit closes the talks and both sides sign before January.

  2. S2

    Gap

    The UK tax starts with no link, and charges run both ways.

  3. S3

    Signed, not in force

    Signed, but the exemption waits for legislation.

The signposts of each scenario
PathSignpost
S1a signed linking agreement before 1 Jan 2027
S2the summit declaration sets no signing date
S3a signature with no suspension of charges

No probability is given for the three paths.

Dates to watch

Calendar

The dates to watch

A dot is a day, a bar a month or a year; a hollow mark is tentative. The line marks today.

  1. 20 Nov 2026 UK-EU summit, Brussels [4] Declared · Outside event

    Remind me

  2. 1 Jan 2027 UK carbon border tax starts [3] Declared · Outside event

    Remind me

Sign in, with alerts on, for an email 7 days and 1 day before.

SourceStrature world-risk card; the dates cite the sources below.
Exhibit R-3 · UNITED KINGDOM · strature.net

The other side

Both sides want a link [1][2], and the Prime Minister has put it on the summit table [4]; a signature before 1 Jan would stop the event.

Connected in Strature

Sources

5 sources, numbered as the text cites them

  1. FAQ: The UK-EU ETS Agreement. Trade and Business Commission · 20 Jul 2026 · Think tank · confidence medium · retrieved 3 Nov 2026
  2. The EU and the UK begin negotiations on merging carbon markets. GMK Center · 15 Jan 2026 · Industry · confidence medium · retrieved 3 Nov 2026
  3. Carbon Border Adjustment Mechanism (CBAM). HM Revenue & Customs, GOV.UK · 9 Sep 2026 · Official · confidence high · retrieved 3 Nov 2026
  4. PM statement to the House of Commons: 12 October 2026. Prime Minister's Office, GOV.UK · 12 Oct 2026 · Official · confidence high · retrieved 3 Nov 2026
  5. EU-UK reset summit confirmed for November. Fruitnet (Fresh Produce Journal) · 13 Oct 2026 · News · confidence medium · retrieved 3 Nov 2026

Reviewed 3 Nov 2026 · version 1 · last change: first review · All risks