Question

To ask His Majesty's Government how they intend to ensure British steel is not undercut by high-emission imports when free Emissions Trading Scheme allocations are phased out.

The Government is introducing a UK Carbon Border Adjustment Mechanism (CBAM) from 1 January 2027 to ensure imported carbon-intensive goods face a carbon price comparable to that paid by UK producers under the UK Emissions Trading Scheme. The CBAM will apply to imports of iron and steel and is designed to address carbon leakage. Alongside this, the UK ETS Authority has consulted on the treatment of free allocations for CBAM-covered sectors to ensure a managed transition while maintaining carbon leakage protection for UK manufacturers.