Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of the Carbon Border Adjustment Mechanism on foundry businesses (a) in Montgomeryshire and Glyndŵr constituency and (b) nationally.

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 so that UK decarbonisation efforts lead to a true reduction in global emissions rather than simply displacing carbon emissions overseas.

The CBAM will apply to all imports of relevant goods into the UK, and will have indirect differential regional impacts due to the location of impacted sectors. Both nationally and in Montgomeryshire and Glyndŵr, the CBAM will give industry confidence to invest in decarbonising knowing their efforts will not be undermined by carbon leakage. An assessment of CBAM impacts on the economy and businesses will be provided when the policy is final or near final, in the form of a tax information and impact note.