Details begin to trickle in on shape of EU-UK linking deal

Earlier this week, Bloomberg revealed some details around how the EU-UK linking agreement will operate, ahead of its expected release as part of the 20 November Brexit reset summit. The reported terms cover the start date of the link, the EU’s recognition of UK Emissions Trading System (ETS) caps, the relationship between UK and EU caps after the current trading period, and a UK Market Stability Reserve, called the Supply Adjustment Mechanism in earlier UK consultations.

The update sets out what these terms mean for the timing of linkage and the handling of supply shocks on the UK side, and the questions that remain open, including the treatment of international aviation and a possible “Farage clause” to discourage a UK exit from the deal.