Question to the HM Treasury:

To ask His Majesty's Government, following the implementation of the EU Carbon Border Adjustment Mechanism on 1 January, what steps they are taking to mitigate the £200 million annual cost to Northern Ireland and risk to 1,100 jobs estimated in Energy UK’s report Borderline confusion - Carbon Border Adjustment Mechanisms in Northern Ireland, published in January 2025.

The Energy UK report referred to assumes that the EU Carbon Border Adjustment Mechanism (CBAM) would apply in Northern Ireland. The EU CBAM does not apply in Northern Ireland. From 1 January 2027, the UK CBAM will apply across the whole of the UK, including Northern Ireland.

To reduce barriers to trade, the UK and EU are also negotiating a deal to link respective emissions trading schemes, which will create the conditions for mutual CBAM exemptions. Those talks have begun and the Government is working to negotiate a good deal in line with UK interests as quickly as is feasible.

The Government also welcomes the European Commission’s proposed amendments, published December 2025, which would mean electricity exports from the UK will not face an EU CBAM charge.