The same official added that there was also “frustration that other talks are lagging behind” on the more contentious issue of youth mobility. Both officials were granted anonymity in order to speak freely about the ongoing talks.
Carbon tax hit
Adam Berman, director of policy and advocacy at Energy UK, said it was now “not realistic” that a linkage negotiation would be completed by the end of the year.
This will be “problematic” for British firms, Berman said, which will suddenly be subject to the new tax from Jan. 1, with the energy sector likely to be hit the hardest. But it could also harm the EU, which could see emissions increase as it seeks to replace relatively “cleaner” U.K. imports.
Meanwhile, the U.K.’s EU Relations Minister Nick Thomas-Symonds has said he wants a Sanitary and Phytosanitary deal — which would see the U.K. align with EU agri-food standards — up and running by 2027. | Stefan Rousseau/PA Images via Getty Images
Another headache for both sides is the fact the new regime will apply in Northern Ireland, which has no hard border with the EU, meaning the region could become a backdoor into the EU market for high-carbon goods.
Berman said there was speculation of a time-limited exemption from CBAM while the U.K. was in linkage negotiations with the EU. “The big question is — Can both sides have an honest conversation about what the implications might be if there isn’t an exemption from the beginning of next year?” he said.
Nevertheless, Berman is hopeful of an eventual agreement, pointing out that the issue of ETS was “not highly politicized” like other, more contentious aspects of the reset like youth mobility.