The UK will implement a new import carbon pricing mechanism by 2027, with goods imported from countries with a lower or no carbon price having to pay a levy as part of decarbonisation efforts.
The government said the carbon border adjustment mechanism (CBAM) would apply to carbon intensive products in the iron, steel, aluminium, fertiliser, hydrogen, ceramics, glass and cement sectors.
The charge applied will depend on the amount of carbon emitted in the production of the imported good, and the gap between the carbon price applied in the country of origin – if any – and the carbon price faced by UK producers.
“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,” the chancellor Jeremy Hunt said.
“This should give UK industry the confidence to invest in decarbonisation as the world transitions to net zero.”
