W.47 Policy Watch

Global 

The UK and EU are negotiating a formal link between their Emissions Trading Systems (ETS) that would allow EU and UK carbon allowances to be used interchangeably in each other’s Carbon Border Adjustment Mechanism (CBAM), removing duplicate carbon charges on cross-border trade in steel, cement, aluminium, fertilisers and hydrogen. 

UK  

• Britain’s interest is practical and financial: Treasury figures show UK exporters would avoid roughly £800 million of EU CBAM payments over the next decade, while customs paperwork is cut by dropping the need for separate product-level emissions declarations.  

• Linking to the larger EU carbon market is also expected to lower price volatility and give British firms access to cheaper options, adding an estimated 0.1 per cent to UK GDP. 

EU 

• For the EU (and therefore for Swedish producers) the deal offers reciprocal relief: EU-based installations will not have to pay the UK’s own £65-per-tonne CBAM, while the extra 100 million tonnes of annual allowances from the UK ETS deepens market liquidity and helps stabilise EU carbon prices.  

• Politically, a joint market strengthens Brussels’ hand in persuading other regions to adopt similar carbon-pricing mechanisms, reducing global carbon-leakage risk. 

Review 

Both sides aim to initial the agreement in late 2025, so companies that export carbon-intensive goods should submit their 2026 shipment and emissions data to the UK–EU linkage consultation by 31 January 2026 to ensure the final text reflects real-world trade flows. 

Local 

At COP30, the UK and Sweden are advancing concrete climate initiatives focused on clean energy, carbon markets, and international cooperation. Both are emphasising innovation, exportable solutions, and finance mechanisms that align climate action with long-term economic strategy. 

UK 

• The UK is announcing major investments in offshore wind, nuclear power, and grid-scale battery storage, part of a £50 billion clean energy push expected to support up to 800,000 green jobs by 2030. 

• The UK is co-leading a new coalition to strengthen global carbon credit standards, publishing shared principles to guide high-integrity corporate offsetting and unlock private climate finance through 2028. 

• Measures are being advanced to reduce methane emissions from fossil fuel production, with a focus on phasing out routine flaring and tightening regulation across domestic energy systems. 

Sweden 

• Sweden is positioning itself as a global provider of climate solutions, promoting technologies in electrified transport, fossil-free industry, and circular energy systems through the “Climate Matchmaker” initiative. 

• Swedish agencies are actively financing climate-aligned industrial projects abroad, including electric vehicles, grid infrastructure, and sustainable mining, linking innovation with export growth. 

• Sweden is strengthening bilateral climate finance agreements that align with Paris Agreement Article 6, enabling the export of Swedish green technologies while supporting verified emissions reductions. 

Review 

Both the UK and Sweden are spearheading developments within climate related fields, and the evolving policy landscape is creating both new obligations and strategic opportunities. Ultimately, businesses may find new avenues for climate-aligned growth, innovation partnerships, and access to emerging markets shaped by evolving UK and Swedish policy commitments. 

Erik Weidstam, Senior Advisor and Manager at Ethos, and Amanda Hagberg, Director of Organisational Development & Brand and Senior Advisor, elaborate further on the implications of COP30, providing expert insight into what this means for businesses in practice. 

“Final Trilogues Ahead: EU Parliament Sets Course for CSRD and CSDDD 

In parallel with COP30, the European Parliament has adopted its negotiating position ahead of the trialogue on Omnibus 1, aimed at simplifying sustainability reporting and due diligence rules. Building a stable centrist majority was initially challenging. Three weeks ago, Parliament rejected the compromise agreed by the European People’s Party (EPP), Socialists and Democrats (S&D), and Renew Europe in the European Parliament. On 13 November, the EPP presented its own proposal, which finally received broad support in plenary (382 in favour, 249 against, 13 abstentions). 

The file now moves into final trilogue negotiations between Parliament, Council, and Commission, intending to finalise the process during December. Significant differences remain, particularly for CSRD, while for CSDDD, both Council and Parliament agree on 5,000 employees and €1.5 billion turnover (see scope negotiation positions below). The outcome of the trialogue will determine sustainability reporting thresholds going forward. 

Despite remaining uncertainties around the final outcome of the Omnibus process, climate change continues to pose a significant risk—particularly for sectors directly exposed to environmental impacts. Investors and lenders increasingly require transparent, high-quality information on companies’ sustainability and climate-related risks and opportunities. Access to capital is likely to favour businesses that can clearly demonstrate how they identify, manage, and mitigate these risks, as well as the tangible impacts of their sustainability actions. Companies that fail to provide credible disclosures may face higher financing costs, reduced investor confidence, and potential market disadvantages. 

Authors 

Erik Weidstam, Senior Advisor and Manager 

Amanda Hagberg, Director of Organisational Development & Brand and Senior Advisor”