© 2023 CBAM Reports
UK CBAM:
defined in 2024, coming up in 2027
defined in 2024, coming up in 2027
The UK CBAM
The UK CBAM
Key documents
- Introduction of a UK
- Introduction of a UK Carbon Border Adjustment Mechanism from January 2027: Government response to the policy design consultation
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UK CBAM, same as in the EU, is meant to stop carbon leakage
The UK's UK ETS, a key policy tool for achieving net-zero, could lead to carbon leakage if other countries don't implement similar carbon pricing mechanisms, creating an uneven playing field for businesses. -
UK CBAM implementation stages still unclear
- The design and delivery of the CBAM is subject to consultation in 2024, including the precise list of products in scope.
- The government will implement a UK CBAM by 2027.
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Eliminate disparity between prices paid for CO2 emissions in the UK and non-UK territories
Both the UK CBAM and EU CBAM will apply a carbon price to imported carbon-intensive goods, with the price defined by the relevant ETS. They also both calibrate implementation with a phasing-out of free allowances under the respective ETS. -
UK CBAM products coverage slightly different from the EU CBAM
The UK CBAM will place a carbon price on some of the most emissions intensive industrial goods imported to the UK:- Cement
- Iron and steel
- Aluminium
- Fertilisers
- Electricity
- Hydrogen
- Ceramics
- Glass
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Allowances and Certificates concept
- There will be no purchase or trading of emission certificates
Key questions
Key questions
- CBAM liability will lie directly with the importer of imported products within scope of the UK CBAM on the basis of emissions embodied in imported goods.
- The UK CBAM will be applied to Scope 1, Scope 2 and select precursor product emissions embodied in imported products to ensure comparable coverage with the UK Emissions Trading Scheme.
- The price applied by a CBAM will therefore be set on the basis of the explicit carbon price differential between the UK and the country where the products were produced.
The UK CBAM will work cohesively with the UK ETS, including free allowances, to ensure imported products are subject to a carbon price comparable to that incurred by UK production, mitigating the risk of carbon leakage
The UK government proposes to set the threshold of £10,000 a year in relation to the total value of CBAM goods entering the country (in contrast to the EU €150 per consignment).
Key documents
Unclear about application of CBAM rules? Have additional questions?
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