The UK will steal a page from the European Union playbook to stay competitive — and try to reach its climate goals.
The nation plans to press ahead with a carbon border adjustment mechanism (CBAM) — levies on imported goods from countries with weaker climate regulations — the Financial Times reported.
Pay Up, Polluters
UK companies that emit greenhouse gasses — think those that deal in steel, energy, cement, and power supplies — pay for the privilege. But those same taxes don’t apply to imports from countries with minimal climate regulation and that are made using highly polluting processes. Those products can often sell at lower prices in the UK and take market share from homegrown businesses:
- The FT reported that UK Chancellor Jeremy Hunt could introduce plans for a CBAM this month. The idea is favored by UK industries, with Gareth Stace of the trade body UK Steel telling the FT: “As the UK steel industry is transitioning to green steel production, it is essential that it is not continually outcompeted by high-emission, imported steel.”
- The EU has its own CBAM going into full effect by 2026, in what European Parliament member Peter Liese called “the biggest climate law ever in Europe, and some say in the world.” Now, the UK is doing the same to avoid becoming a dumping ground for cheaper, less environmentally friendly products.
I’m Gonna Play Both Sides: UK Prime Minister Rishi Sunak called the idea of the CBAM “reasonable and sensible,” but he’s also been on a bit of a green U-turn lately. In September, he confirmed the UK would push back the deadline for sales of new gas-and-diesel-powered vehicles, and the UK also gave the go-ahead for new oil drilling in the North Sea. Sunak is entertaining the idea of net-zero carbon emissions by 2050, but he’s also trying to appeal to his idea of the average British voter. Which would follow if polls haven’t consistently shown broad public and Conservative-voter support for net-zero climate targets.