UK to apply carbon border adjustment mechanism from 2027
UK government aligns with EU on CBAM but doesn't go as far as linking emissions trading schemes.
The UK government announced this morning that it would apply a carbon levy on certain types of goods imported from countries with a lower or no carbon tax from 2027 – following the implementation of a similar carbon border adjustment mechanism in the EU.
The UK’s carbon border adjustment mechanism (CBAM) will initially apply to iron, steel, aluminium, fertiliser, hydrogen, ceramics, glass and cement. It is meant to ensure British companies in these sectors remain competitive as they accelerate efforts to decarbonise, and to avoid what is known as ‘carbon leakage’ – when companies move production overseas to avoid carbon rules in their own country.
