If the shank on the tool is 1/2", then ER11 is insufficient since, as GTjim said, that size collet will only accept up to 7mm. The minimum size collet series that accepts 1/2" is ER-20 which goes up to 13mm, so unless you can make some sort of adapter which is 7mm on one end and has a 1/2" hole in the other...you're stuck. That may be possible since a drag knife isn't spinning fast, so the rigidity isn't so much of a problem. Possibly the tool itself could be modified on a lathe to give it a 7mm shank?

Looking at the tool in question..
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It looks like it could be modified, so long as it's not made from a very hard grade of steel, which seems unlikely.