The UK’s Carbon Border Adjustment Mechanism launches in January 2027. Joshua Stevens (Pump Court Tax Chambers) explains what’s proposed – and why it risks exacerbating trade tensions at a time of rising protectionism.
What is a CBAM?
The materials published alongside the Budget on 30 October 2024 included Introduction of a UK Carbon Border Adjustment Mechanism from January 2027: Government response to the policy design consultation (the ‘Response Document’). This confirms that the UK will introduce a carbon border adjustment mechanism (CBAM) from 1 January 2027.
Mechanically a CBAM functions by charging a levy on certain imported goods which is calculated by reference to the carbon emissions assessed (or assumed) to have been emitted in the production of those goods. It thus places an explicit carbon price on imports within its scope acting as an equivalent to domestic carbon pricing imposed by an emissions trading scheme (ETS).
What...
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The UK’s Carbon Border Adjustment Mechanism launches in January 2027. Joshua Stevens (Pump Court Tax Chambers) explains what’s proposed – and why it risks exacerbating trade tensions at a time of rising protectionism.
What is a CBAM?
The materials published alongside the Budget on 30 October 2024 included Introduction of a UK Carbon Border Adjustment Mechanism from January 2027: Government response to the policy design consultation (the ‘Response Document’). This confirms that the UK will introduce a carbon border adjustment mechanism (CBAM) from 1 January 2027.
Mechanically a CBAM functions by charging a levy on certain imported goods which is calculated by reference to the carbon emissions assessed (or assumed) to have been emitted in the production of those goods. It thus places an explicit carbon price on imports within its scope acting as an equivalent to domestic carbon pricing imposed by an emissions trading scheme (ETS).
What...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
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