Keir Starmer, Ursula von de Leyen, Antonio Costa and other UK/EU supremos recently met up in London for what they called the ‘Reset’ Summit, with the goal of getting the economy moving while also hitting those crucial climate targets and pushing towards net zero. Green aspirations aside, a huge part of this was about sorting out how to avoid a mess of taxes and red tape when it comes to carbon emissions. The gamechanger from this summit? They agreed to link up the UK and EU’s carbon pricing systems, specifically their Emissions Trading Schemes (ETS) and Carbon Border Adjustment Mechanisms (CBAM).
Game-changers
Think of ETS’s as a cap-and-trade system for big polluters. The EU has had one since 2005, and the UK set up its own after Brexit. The UK market has faced instability and was heading towards sending £800m in carbon taxes to the EU by 2030, paid for by UK exporters. The new agreement means a more stable, larger market, more investment in green tech, cost savings (all £800m of them), and making UK CO2 storage more competitive, not to mention a more streamlined path to net zero. Until now the two systems weren’t really playing by the same rules, so the fact that they have joined up is a massive win.
CBAMs are all about fairness. They make sure that if you're importing stuff, you're paying a similar carbon price as local manufacturers. This stops companies from just moving production to places with weaker environmental rules to save money. The EU’s CBAM is set to kick-off in January 2026 (though there's talk of a small delay), with the UK's following in January 2027.
Energy co-op
In more good news for the push for net zero, the ‘Reset’ agreed closer cooperation. This includes giving certainty to businesses with regards to clean energy investments, and exploring the UK’s participation in the EU’s electricity trading platforms. This should help to significantly streamline electricity trading, reduce the cost of electricity, and develop new renewables in the North Sea. The other agreement was to cooperate on clean energy tech, including hydrogen, CCUS, and decarbonised gases. It is anticipated that these agreed actions will support thousands of jobs, boost growth, and work towards a secure and sustainable future.
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The Reset" is a fantastic step towards a simpler, more unified way to manage carbon, benefiting both businesses and our planet. If you’d like to have a chat about how we can help you to achieve a similarly simple and unified way to manage your carbon data and keep your business flowing smoothly, give us a call.