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.
Reporting by Nuran Erkul in London
Writing by Handan Kazanci