Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether he has made a recent assessment of the potential merits of linking the UK carbon border adjustment mechanism to the EU carbon border adjustment mechanism.

The government has recently consulted on potential future measures to mitigate carbon leakage risks, including the potential for a UK Carbon Border Adjustment Mechanism (CBAM). The consultation closed on 22 June 2023, and the government will respond to the consultation in due course.

In May 2023, the EU formally adopted their EU CBAM Regulation, which will start with a transitional (reporting) phase from 1 October 2023. The EU CBAM charge will not come in until 1 January 2026.

Full details of the EU CBAM will be known when the EU adopt the required implementing and delegated acts. UK officials are continuing to closely monitor this process and are waiting to see these before building a full understanding of potential impacts on UK businesses and any interactions with domestic policy