The United Kingdom’s government has opened a consultation to receive proposals for the design and administration of a CBAM (Carbon Border Adjustment Mechanism) to be introduced in January 2027. The mechanism would be applied on imports of certain carbon intensive imported goods from the following sectors: aluminium, cement, ceramics, fertilisers, glass, hydrogen, and iron and steel. The consultation is open to interested parties, including those overseas. After the consultation, the UK government will publish a formal response and prepare a primary legislation for stakeholders to comment on. The consultation will be open until 13 June 2024.
In 2023, the UK consulted on the risk of carbon leakage and a range of potential mitigation measures in a consultation entitled ‘Addressing carbon leakage risk to support decarbonisation’, considering necessary to put in place further actions to achieve the government aim to decarbonise all sectors to reach net-zero emissions by 2050, according to its Net Zero Strategy (2021). In October 2023, the European Union launched the first phase of its own CBAM, that expects to impose CO2 emissions tariffs on imported cement, iron, steel, aluminium, fertilisers, electricity and hydrogen as of 2026. The UK’s CBAM expects to align with EU timescales to prevent potential carbon price discrepancies, and to avoid unnecessary trade and fiscal barriers for UK goods exports.
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