Carbon Border Taxes

Earl of Devon Excerpts

Wednesday 12th March 2025 Lords Chamber

[Lord Livermore (Lab)]

I absolutely agree with the noble Earl that alignment is helpful to UK competitiveness. We recognise that alignment with existing regimes can reduce administration burdens, so we will align where appropriate and we will follow developments on the EU CBAM very closely. We also continue to explore all options to improve trade and investment with the EU, which includes the UK and EU giving serious consideration to linking our emissions trading schemes.

[The Earl of Devon (CB)]

My Lords, given that we now produce no nitrogen fertiliser at all in the United Kingdom, and all of it is imported, have the Government calculated the impact of the carbon border tax on the price of food grown in the UK?

[Lord Livermore (Lab)]

Fertiliser production in the UK is subject to carbon pricing under the UK Emissions Trading Scheme. A UK CBAM will ensure that fertiliser produced overseas faces a comparable carbon price to equivalent goods produced in the UK. Most UK agricultural prices are a function of a range of international factors and the Government do not expect a CBAM on fertiliser to put UK farmers at a competitive disadvantage.