In line with measures announced by the EU, the UK also plans to implement a carbon border tax starting from 2026. This measure will bring about levies on imported carbon-intensive products from countries that lack similar robustness in climate laws and regulations.
With the EU’s soft launch of its carbon border adjustment mechanism (CBAM), stakeholders in the UK are concerned that failing to introduce similar measures will likely harm its trade, particularly with the EU, one of its major trading partners.
On the other hand, many believe that should the UK introduce its own carbon border tax, this will not only benefit the country, but will also spur the shift towards global carbon pricing and help achieve climate targets.
Finn O’Muircheartaigh, Director of Policy and Markets at BeZero Carbon, said: “A UK CBAM will be transformative in scaling international climate ambition. With the UN global stocktake about to conclude that we’re falling far short of limiting global warming to 2 degrees, governments must be prepared to take ambitious measures to accelerate the net zero transition.”
“A UK CBAM could incentivize a drive towards global carbon pricing, which in turn will encourage the use of impactful decarbonization tools, such as high-quality carbon credits, to bring about action with the urgency needed to address the climate crisis,” O’Muircheartaigh said.
The polling conducted by Stack Data Strategy and E3G shows that 73% of UK manufacturers support the introduction of a CBAM, with only 8% opposing to it.
When the detail of the policy was shared with British manufacturing businesses, 49% estimated that it would positively impact their business. Respondents noted that it would create a level playing field, ensuring that their business would not be hurt by cheaper products from countries with less stringent environmental regulations.
UK manufacturers also strongly backed alignment with the EU. 70% believe that any future UK carbon border measure should be in sync with the European scheme.
67% believe the country should formally link its Emissions Trading Scheme (UK ETS) with the EU ETS, a form of alignment that would exempt UK business from the EU CBAM.