At the UK-EU Summit on 19 May 2025, the United Kingdom and the European Commission agreed to strengthen cooperation and maritime security, while also linking their carbon markets.
Carbon markets and common interests
This initiative aims to align the UK Emissions Trading Scheme (UK ETS) with the EU Emissions Trading System (EU ETS), fulfilling commitments under Article 392(6) of the Trade and Cooperation Agreement. The agreement is intended to support mutual carbon pricing policies without limiting either side’s ability to pursue more ambitious environmental goals. It will ensure dynamic alignment with EU regulations, respect UK sovereignty, and include sectors such as electricity generation, industry, and international transport.
The deal will also allow goods from both jurisdictions to benefit from mutual exemptions under respective Carbon Border Adjustment Mechanisms. The arrangement will be governed through joint oversight.
Steve Parker, director general of the British International Freight Association (BIFA) welcomed the announcement of closer cooperation on the Emission Trading Systems, but called on the government to ensure the most practical reporting solution is adopted in the UK.
The outcome of today’s Summit marks a leap forward in the EU-UK’s trading relationship, after the turbulence of the last decade
… Parker said.
Common Sanitary and Phytosanitary (SPS) Area
The European Commission and the UK agree that a Common Sanitary and Phytosanitary (SPS) Area would ease the movement of agri-food products. As part of the deal, a new SPS agreement will make it easier for food and drink to be imported and exported by reducing the red tape that placed burdens on businesses and led to lengthy lorry queues at the border. This agreement will have no time limit, giving vital certainty to businesses.
Some routine checks on animal and plant products will be removed completely, allowing goods to flow freely again, including between Great Britain and Northern Ireland. Ultimately this could lower food prices and increase choice on supermarket shelves.
Richard Ballantyne, Chef Executive of the BPA, which represents ports that facilitate 86% of the UK’s trade including the overwhelming majority of our ports that handle EU traffic, said they welcome a new common SPS area that will lower barriers to trade.
There is a long way to go in agreeing the details and getting arrangements in place, but we hope this will be the foundation of a longer term partnership with the EU. This agreement means that many new border control posts that were built at a cost of over £120m to industry to manage checks that never fully materialised are now likely to become obsolete. Government should cover the full costs of these white elephants and put this episode behind us
… commented Richard Ballantyne.
According to the UK Government, closer co-operation on emissions through linking the respective Emissions Trading Systems will improve the UK’s energy security and avoid businesses being hit by the EU’s carbon tax due to come in next year – which would have sent £800 million directly to the EU’s budget.
Combined, the SPS and Emissions Trading Systems linking measures alone are set to add nearly £9 billion to the UK economy by 2040, in a huge boost for growth.
British steel exports are protected from new EU rules and restrictive tariffs, through a bespoke arrangement for the UK that will save UK steel £25 million per year.
Strengthening maritime security
The European Commission and the United Kingdom will seek to enhance cooperation in the following areas relating to maritime security: ship and port facility security (in particular related to the International Ship and Port Facility Security Code), maritime cyber security, security aspects of maritime autonomous surface ships, International Maritime Organization maritime security initiatives and other relevant maritime security related topics.
Furthermore, the United Kingdom and the European Commission will endeavour to deepen their cooperation in the area of maritime safety in relation to accident reporting, including mutual sharing of accident investigation reports. In addition, cooperation in the context of the International Maritime Organization should be intensified.
