UK is to implement a new import carbon pricing mechanism by 2027 to support the decarbonisation drive.
- imports of iron, steel, aluminium, ceramics and cement from overseas will face a comparable carbon price to those goods produced in the UK
- reduces the risk of ‘carbon leakage’, avoiding emissions being displaced to other countries because they have a lower or no carbon price
Goods imported into the UK from countries with a lower or no carbon price will have to pay a levy by 2027, ensuring products from overseas face a comparable carbon price to those produced in the UK.
The UK has a track record to be proud of on decarbonisation. We were the first major economy to legislate for net zero and we are reducing our emissions faster than any other G7 country.
Decarbonising UK industry forms an important part of delivering the energy transformation needed to achieve net zero. But these efforts will not succeed if decarbonisation in the UK simply leads to higher emissions abroad.
The carbon border adjustment mechanism (CBAM) will ensure highly traded, carbon intensive products from overseas in the iron, steel, aluminium, fertiliser, hydrogen, ceramics, glass and cement sectors face a comparable carbon price to those produced here.