UK to introduce carbon tax on metal imports from 2027

UK to introduce carbon tax on metal imports from 2027

Imported uncooked supplies akin to metal and cement will incur a brand new carbon tax from 2027 beneath UK plans designed to help home producers and cut back emissions, however the authorities is going through criticism for not transferring quick sufficient.

The Treasury mentioned the tax would assist tackle the phenomenon of “carbon leakage”, during which UK producers are undercut on worth by overseas rivals whose governments don’t impose levies on companies that emit loads of carbon.

The result’s that emissions are merely displaced to different nations, whereas greener UK producers lose out as a result of they need to pay carbon-related expenses.

The chancellor, Jeremy Hunt, mentioned: “This levy will make sure that carbon intensive merchandise from abroad – like metal and ceramics – face a comparable carbon worth to these produced within the UK, in order that our decarbonisation efforts translate into reductions in international emissions.

“This could give UK trade the boldness to put money into decarbonisation because the world transitions to web zero.”

The Treasury mentioned expenses beneath the carbon border adjustment mechanism (CBAM) would depend upon the quantity of emissions within the manufacture of the imported product, in addition to the hole between the carbon worth utilized within the nation the place it’s produced and that paid by equal UK producers.

Trade teams welcomed the plan however warned that the proposed begin date of 2027 was too late.

The commerce physique UK Metal identified {that a} comparable mechanism will likely be put in place by the EU in 2026, which means high-carbon metal from nations akin to China might be dumped on to the UK marketplace for a yr, till the CBAM is in impact.

“With greater than 90% of worldwide metal manufacturing going through no carbon price, it is just proper {that a} new carbon border coverage is put in place to create a stage enjoying discipline on carbon pricing,” mentioned the UK Metal director common, Gareth Stace.

skip previous e-newsletter promotion

“Nevertheless, implementing the UK scheme one yr after the EU CBAM begins is massively regarding.

“Regardless of the metal sector repeatedly warning officers how uncovered the UK could be if it didn’t mirror the EU implementation timetable, authorities as we speak appears to be actively planning for simply that state of affairs.”

Supply hyperlink