The UK government has announced plans to implement a carbon pricing mechanism on imports of carbon-intensive goods such as iron, steel, and cement by 2027. The move aims to combat ‘carbon leakage’—where emissions are shifted to countries with laxer carbon restrictions—and ensure that imported goods face equivalent carbon costs to domestic products. Chancellor Jeremy Hunt stated that this levy would align overseas products with UK decarbonisation standards, encouraging global emission reductions. The forthcoming Carbon Border Adjustment Mechanism (CBAM) will be refined through consultation, considering the carbon emitted during production and the originating country’s carbon pricing. This initiative complements the UK’s Emissions Trading Scheme, targeting industries at risk of carbon leakage and driving decarbonisation efforts. The government also plans to develop voluntary product standards and a carbon content framework for goods, reinforcing its commitment to industry decarbonisation through various support measures.
The UK is to implement a new import carbon pricing mechanism by 2027 to support the decarbonisation drive.
Source: New UK levy to level carbon pricing – GOV.UK