Factsheet: UK Carbon Border Adjustment Mechanism
Time: 12/2023
By: UK HM Treasury, UK Department for Energy Security & Net Zero
To achieve its net-zero emissions target, the United Kingdom is implementing various policies, including carbon pricing. However, this could lead to "carbon leakage" – a phenomenon where production activities shift to countries with less stringent climate regulations, impacting global emissions reduction efforts. To address this challenge, the UK government has launched a public consultation on implementing a Carbon Border Adjustment Mechanism (CBAM). Published in December 2023 by HM Treasury and the Department for Energy Security and Net Zero, this summary document provides details about the UK's CBAM. In addition to explaining the nature of carbon leakage and the objectives of the CBAM, the document analyzes the initial sectors that will be within the scope of the adjustment, details on how carbon prices will be calculated, the interaction between the CBAM and the UK's existing Emissions Trading System (UK ETS), as well as the future implementation roadmap for the CBAM..
The document is attached below:
Factsheet: UK Carbon Border Adjustment Mechanism