Autumn Budget 2024 - UK Carbon Border Adjustment Mechanism

Holly Grantham, head of environmental taxes at PwC UK, comments on the government's response to the March 2024 consultation on the introduction of a UK carbon border adjustment mechanism (CBAM)

“The Government has confirmed that the UK Carbon Border Adjustment Mechanism (CBAM) will be introduced on 1 January 2027, targeting specific aluminium, cement, fertiliser, hydrogen, iron, and steel products imported into the UK. This measure aims to reduce carbon emissions by taxing imports based on their carbon content, aligning with the UK's broader climate goals and commitments to decreasing greenhouse gas emissions. The CBAM represents a significant policy shift with broad implications for businesses, trade, and environmental policies, necessitating strategic adjustments by affected parties.

“The response confirms a number of adjustments to the measure as previously proposed, most notably that glass and ceramics products will not be in scope of the UK CBAM from 2027, although the Government has stated that it may consider their inclusion at a later date. The value of the minimum registration threshold has also been increased from £10,000 to £50,000, so that only businesses importing £50,000 or more of CBAM goods over a 12-month period will need to comply with the UK CBAM.”