The declining prices in the UK's carbon market have raised the possibility of additional carbon levies on steel exports to the EU unless the UK aligns its carbon policies with the EU. The European Union plans to implement a carbon border levy from 2026, applying fees to imports of emissions-heavy goods like steel. The UK, which operates its own emissions trading scheme, was initially on track to meet the criteria. However, recent changes by the UK government have led to a significant drop in the British CO2 price, making it imperative for the UK to match EU policies to avoid these levies.

Source: Reuters