BRUSSELS, Dec 18 (Reuters) - The European Union will not exempt Britain from its CO2 emissions fee on imported goods, including steel and cement, until the two sides link their carbon markets, the bloc's climate chief said.’
British industries had hoped to get a temporary exemption from the EU's carbon border adjustment mechanism (CBAM) while the carbon market linkage negotiations were underway.
The UK government has said the EU levy would cost its industry 800 million pounds a year.
EU Climate Commissioner Wopke Hoekstra said on Wednesday that Britain would not be exempted from the carbon border levy until its carbon market was linked to the EU's.
We're not exempting anyone, but the moment we will be fully linking those two, it is likely that there will be an exemption at that point in time," he said.
Hoekstra said Brussels was aware the British government "would have ... liked a different order to this whole set of events".
"But that is something unfortunately we cannot change," Hoekstra said, adding that the EU would work constructively with Britain to link the carbon markets.
DIFFERENT RULES FOR ELECTRICITY
There looked, however, to be some respite for British electricity exports to Europe - which, alongside steel, cement, fertilisers, aluminium and hydrogen, will be covered by the EU carbon border levy.
The European Commission said that, in principle, British power exports should not face CBAM costs, because British power plants already paid CO2 costs higher than those in the EU, a move welcomed by the British government.
"Our priority remains securing a carbon-linking agreement as soon as possible, which would save UK industry from paying the charge on 7 billion pounds worth of UK exports," a government spokesperson said late on Wednesday.
The EU CBAM will start imposing fees on the bloc's imports of goods from January. Companies have until a September 2027 deadline to buy CBAM certificates to cover their 2026 emissions and submit them to the EU.
“The EU CBAM creates a barrier to UK steel exports to Europe and piles additional costs and admin onto our steelmakers at a time when global trade is increasingly turbulent," said Frank Aaskov, Director for Energy and Climate Change Policy at industry group UK Steel.