Question to the HM Treasury:

To ask the Chancellor of the Exchequer, how much her Department expects to raise from the introduction of a Carbon Border Adjustment Mechanism in (a) 2027, (b) 2028, (c) 2029 and (d) 2030.

The government will introduce the UK Carbon Border Adjustment Mechanism (CBAM) on 1 January 2027.

The UK CBAM will ensure highly traded, carbon intensive products from overseas face a comparable carbon price to those produced here, making sure that UK decarbonisation efforts lead to a true reduction in global emissions rather than simply displacing carbon emissions overseas.

The UK CBAM is designed to reduce the risk of carbon leakage. The aim of the UK CBAM is not to raise revenue. However, in the Office for Budget Responsibility’s most recent Economic and Fiscal Outlook, they forecast the UK CBAM to raise £43m in 2026-27, £184m in 2027-28, £221m in 2028-29, and £223m in 2029-30.