The UK is to introduce carbon taxes on imports of products corresponding to metal, fertiliser, glass and cement from 2027.
In an effort to make sure UK corporations investing in additional environmentally pleasant manufacturing aren’t at a aggressive drawback, the Treasury plans for a carbon border tax to be levied on items introduced in from nations with a decrease or no carbon levy.
Imports from high-pollution and energy-intensive industries are to be topic to what’s termed the cross-border adjustment mechanism (CBAM), it was introduced on Monday.
The coverage goals to deal with “carbon leakage”, the place corporations transfer manufacturing overseas to keep away from greater prices and laws in nations with emissions discount mandates.
It means merchandise which are made with or utilizing lots of fossil fuels – corresponding to iron, aluminium and ceramics – might be topic to the brand new tax corresponding to the carbon value on the identical objects produced within the UK.
A full record of the affected items and the way the scheme will work might be topic to session subsequent yr, the federal government says, earlier than coming into impact from 2027 – the yr after an identical tax comes into drive within the European Union.
But the Treasury has already stated the cost on imports will rely upon the quantity of carbon emitted in manufacturing in addition to the hole between the carbon value utilized within the nation of origin in comparison with carbon prices confronted by UK producers.
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The announcement got here as a authorities session discovered 85% of respondents stated “carbon leakage” is a present or future threat to their decarbonisation efforts.
“This should give UK industry the confidence to invest in decarbonisation as the world transitions to net zero,” Chancellor Jeremy Hunt stated.
In an effort to advertise decrease carbon emission merchandise, the federal government stated it would work to ascertain product requirements and construct a framework to measure and assess the carbon content material of products.
Steel foyer group, UK Steel, had a lukewarm response to the tax.
While it might create a “level playing field on carbon pricing” by making certain imported metal pays the identical carbon prices as UK makers, the group opposed the implementation date.
“By confirming a CBAM from 2027 instead of matching the EU’s 2026 timeline, the government risks high-emission steel being dumped in the UK from 2026 when the EU CBAM takes effect,” it stated.
“The steel sector has repeatedly warned government against not mirroring the EU implementation timetable, as this would leave the UK steel industry exposed.”
Manufacturer’s physique, Make UK, equally welcomed the transfer however was crucial of the 2027 begin date.
Source: information.sky.com”