Carbon levy welcomed by business leaders

Business leaders have welcomed the introduction of a new carbon levy for imported goods. 

Goods imported into the UK from countries with a lower or no carbon price will have to pay a levy by 2027, ensuring products from overseas face a comparable carbon price to those produced in the UK, the government announced yesterday. 

The carbon border adjustment mechanism (CBAM) will ensure highly traded, carbon intensive products from overseas in the iron, steel, aluminium, fertiliser, hydrogen, ceramics, glass and cement sectors face a comparable carbon price to those produced here.

The new rules aim to tackle ‘carbon leakage’, reducing the risk of production and associated emissions being displaced to other countries because they have a lower or no carbon price.

The charge applied by the CBAM will depend on the amount of carbon emitted in the production of the imported good, and the gap between the carbon price applied in the country of origin - if any - and the carbon price faced by UK producers.

Cameron Uppal (pictured), policy and public affairs advisor at Greater Birmingham Chambers of Commerce, said: “Business across the Greater Birmingham region will be happy to see that a level playing field has been introduced through the implementation of the Carbon Border Adjustment Mechanism (CBAM).

“The fact that highly traded, carbon intensive products such as iron and aluminium produced abroad will face a comparable carbon price to those goods produced in the UK is welcome news as it will mean not only a level playing field for all businesses in terms of the carbon price they face, but a collective responsibility when it comes to reducing carbon emissions and tackling greenhouse gases.

“With such a large number of the businesses that we represent exporting and importing from abroad, we will continue to work closely with such businesses as we approach 2027 when CBAM will come into full force.

“We will continue to lobby Government to ensure that the process of phasing in of CBAM is as easy as possible for the businesses that we represent.”