The UK will impose a carbon levy on imported goods by 2027 as part of a regulation to support the country’s decarbonization drive, the British government announced on Monday.
The British Treasury said in a statement that the carbon border adjustment mechanism (CBAM) will ensure highly traded, carbon-intensive products from overseas in the iron, steel, aluminum, fertilizer, hydrogen, ceramics, glass and cement sectors face a comparable carbon price to those produced in the UK.
The new regulations “will tackle ‘carbon leakage’, reducing the risk of production and associated emissions being displaced to other countries because they have a lower or no carbon price,” it added.
Citing the Chancellor of the Exchequer, Jeremy Hunt, the statement said: “This levy will make sure carbon-intensive products from overseas, like steel and ceramics, face a comparable carbon price to those produced in the UK, so that our decarbonisation efforts translate into reductions in global emissions.”
“This should give UK industry the confidence to invest in decarbonisation as the world transitions to net zero,” Hunt added.
The European Union will implement a similar program in 2026.
