Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether he plans to undertake a review of the criteria used to determine which industries are included in its carbon border adjustment mechanism proposals.

The government will implement a carbon border adjustment mechanism (CBAM) from 1 January 2027 to ensure that UK decarbonisation efforts lead to a true reduction in global emissions. The CBAM will apply a carbon price to relevant imported goods at risk of carbon leakage from the following sectors: aluminium, cement, ceramics, fertiliser, glass, hydrogen, iron & steel.

In making the decision around the initial sectoral scope of the UK CBAM, the government looked primarily at three factors: inclusion in the UK ETS as the purpose of the CBAM is to ensure a comparable treatment of imported goods and domestic products from a carbon pricing perspective, carbon leakage risk, and feasibility and effectiveness.

The scope of the UK CBAM will be kept under review. Further details on the design and delivery of a UK CBAM, including the precise list of products in scope within the announced sectors, will be the subject of consultation in 2024.