Comment: Carbon border adjustment mechanism
18 December 2023
- Addressing carbon leakage risk to support decarbonisation
- Inquiry: Mapping the path to net zero
- Environmental Audit Committee
Reacting to the Government’s announcement today on addressing carbon leakage risk and its intention to implement a carbon border adjustment mechanism (CBAM) by 2027.
Chair's comment
Environmental Audit Committee Chair, Rt Hon Philip Dunne MP, said:
“We are now one step closer to a carbon border adjustment mechanism (CBAM) to help level the playing field between UK industries that must foot the bill for the carbon they produce, and those abroad who provide goods into UK markets but are not subject to UK carbon pricing. Imports to the UK make up 43% of the UK’s consumption emissions. These must be tackled, or the UK's efforts to decarbonise will be undercut. Applying an appropriate carbon price at the border will go a long way towards closing carbon loopholes.
“Other jurisdictions -- the US and the EU -- have been ahead of the UK in introducing a CBAM. Ministers must ensure that UK industries face no adverse impacts arising from any delay in implementing a UK CBAM. That is why, in April 2022, the Committee recommended that the Treasury accelerate the establishment of an adjustment mechanism at the UK's carbon border.
"It is therefore very welcome that the Government has heeded EAC's recommendations and has today announced tangible steps towards establishing a UK CBAM. Not only will this protect UK businesses: it will also keep the UK at the forefront of the group of leading economies which are introducing comprehensive and effective measures to tackle global emissions while promoting growth."
Further information
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