Members Area
T: +44 (0)114 551 8170

UK copies EU: New CO2 border tax from 2027!

It appears that the UK government is planning to implement a CO2 border tax from 2027, following the EU model. This tax will apply to imported products made from carbon-intensive sectors such as iron, steel, and aluminium, with the goal of subjecting them to the same CO2 prices as domestic products.

Simultaneously, the UK emissions trading system is being revised, and similar to the EU, there will be free CO2 certificates for large emitters. The government argues that this is necessary to protect the competitiveness of these emitters.

The announcement suggests that import-dependent companies in the UK should be prepared for potential bureaucratic challenges similar to those faced in the EU.

The EU’s CO2 border adjustment mechanism (CBAM) has faced criticism, with concerns about incorrect assumptions, excessive bureaucracy, and a potential economic loss of up to 10 billion euros per year in the EU. Other industry media are now starting to criticize CBAM, but there are concerns that the criticism may be coming too late, as the mechanism is already in motion.

It will be interesting to see how these developments unfold and how businesses and governments adapt to the changing landscape of carbon pricing and emissions regulations.

Read full story