Recommendation 25

We support the Government’s intention to act on the commitment made by its predecessor within the Trade and Cooperation Agreement to “seriously consider” linking the UK and EU emissions trading systems. An agreement to that effect would be of benefit to both sides’ climate ambitions. An agreement on Emissions Trading Systems linkage would also allow for mutual exemption from carbon border taxes that might otherwise hinder 90 UK-EU trade when they are fully in effect. However, we are concerned by the lack of communication about the timing and detail of any temporary arrangement to exempt UK exports from EU Carbon Border Adjustment Mechanism in the meantime. (Conclusion, Paragraph 80)