Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the financial and administrative costs to the UK steel industry and downstream steel-consuming businesses of introducing the UK Carbon Border Adjustment Mechanism from 1 January 2027.

The Government expects liabilities arising from Carbon Border Adjustment Mechanism (CBAM) to be modest in its early years. As a result, CBAM is expected to have limited impacts on importers and users of CBAM goods, including in the steel and steel-consuming sectors.

The Government has recently published illustrative CBAM rates^[1] for all covered sectors, calculated using the most recent data available at the time of publication. The illustrative rate for iron and steel is £9.69/tCO₂e. The first CBAM rates will be published before the end of the year.

As set out in the Tax Information and Impact Note^[2], CBAM is estimated to result in one-off administrative costs of around £9 million and ongoing costs of around £16 million per year across affected businesses.

^[1] www.gov.uk/government/publications/illustrative-cbam-rates-and-worked-example-for-carbon-border-adjustment-mechanism-cbam

^[2] Carbon Border Adjustment Mechanism - GOV.UK