Carbon Border Taxes

Earl Russell Excerpts

Wednesday 12th March 2025 Lords Chamber

[Lord Livermore (Lab)]

I am grateful to the noble Lord for his question. However, the answer is no, I do not agree with him. Reducing the UK’s carbon emissions is necessary to meet our emissions targets, and the emissions trading scheme and the carbon border adjustment mechanism are necessary tools to do that. Our approach is very similar to that of the EU. As the noble Lord said in his Question, we are doing exactly what the EU is doing—in fact, I think it has followed us, rather than the other way around, so our approaches are extremely similar. The US Administration have made no public comment on the UK CBAM, and I am not going to speculate on a hypothetical.

[Earl Russell (LD)]

My Lords, does the Minister agree that the UK and the EU running separate carbon markets only adds regulatory burdens and damages our energy transition and national industries? Is it time to work with our EU partners and look at relinking carbon markets to help to make our industries more competitive and drive down our energy bills?

[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.