An agreement in principle was reached to explore the potential for linking the two Emission Trading Systems, and an informal agreement was made on a common area for sanitary and phytosanitary cooperation, which holds the promise of easing trade frictions and strengthening the partnership.

UK-EU Common Sanitary and Phytosanitary Area

At the UK-EU Summit, it was agreed in principle that a common area for SPS goods would alleviate some of the issues facing traders on both sides when moving agricultural and food goods. This common area would enable products covered by the regulation to move freely from the United Kingdom to the European Union and vice versa, as if they were moving within the Union. There would need to be an identical set of rules regarding this with simultaneous supplication for it to be successful.

HMRC has indicated it would include the following

• Removal of export health certificates
• Removal of plant health certificates
• Removal of certificates of inspection for organic products
• Routine border checks on agri-food goods removed

UK-EU Emission Trading System Linkage

The EU CBAM has been in force since October 2023, requiring EU importers of CBAM goods to report on these. This level of reporting has affected many UK Businesses, not only traders who export and may act as importers into the EU, but also businesses that manufacture downstream products of these CBAM goods.

It is not a stretch to say that the EU CBAM, also an EU regulation, is far reaching and has left many UK businesses unsure of the requirements under this regulation, and with the UK planning its own version of CBAM, due to come into force in 2027, equally

UK Importers will need to be aware of this, although this is not what is being discussed today.

At the UK–EU Summit on 19^th May 2025, it was announced that the two parties would work towards linking the EU's and the UK's emission trading schemes. In doing so, it would create conditions for CBAM goods in both the UK and the EU to benefit from a mutual exemption from both the EU CBAM and the future UK CBAM.

These negotiations are ongoing and represent a significant step towards finalising the agreements. The mutual exemption from CBAM would come as a welcome step for both UK Exporters and EU Importers trading under the current EU CBAM. This mutual exemption would reduce administrative burden and ease trade frictions between the jurisdictions.

https://www.europarl.europa.eu/RegData/etudes/BRIE/2025/775873/EPRS_BRI(2025)775873_EN.pdf

https://www.gov.uk/government/publications/methodology-note-preliminary-economic-impacts-of-linking-the-uk-eu-emission-trading-schemes/methodology-note-assessing-the-preliminary-economic-impacts-of-linking-the-uk-eu-emission-trading-schemes

Next Steps for Both the Common Sanitary and Phytosanitary Area and the Linkage of ETS – Recommendation for Council Decision.

On 16^th July 2025, the EU published its recommendation for a Council decision on authorising the opening of negotiations between the EU and the UK on common sanitary and phytosanitary areas, as well as linking the UK to the EU's emission trading system. These would be two separate agreements, but each could ease trade and relations between the UK and the EU, thereby strengthening the partnership.



https://ec.europa.eu/transparency/documents-register/detail?ref=COM(2025)408&lang=en