Britain Seeks Views on 2027 Carbon Border Tax

Britain has Launched a consultation on how it should apply a new carbon import levy on some products from 2027 to help to protect businesses against cheaper imports from countries with less strict climate policies.

Britain, which has a target of reaching net zero emissions by 2050, launched an emissions trading system (ETS) in 2021 to charge power plants, factories and airlines for each tons of carbon dioxide they emit

As part of efforts to meet that goal. The planned carbon border adjustment mechanism (CBAM) will apply to imports of carbon-intensive products in the iron and steel, aluminum, fertilizer, hydrogen, ceramics, glass and cement sectors.

Britain’s benchmark ETS carbon contract currently trades around 36 pounds (USD46) per metric ton, while contracts in China’s ETS trade around 84 RMB (USD11.67) per ton. Britain proposed using the average auction price of permits in its ETS over the preceding quarter as a reference price for the levy. “Using a quarterly reference….would allow for the UK CBAM rate to track the changes in the UK ETS price throughout the year”.the document said.

It proposes the first CBAM accounting period should run from Jan 1, 2027 to Dec 31, 2027, and that from 2028 accounting periods should become quarterly. The consultation will be open until June 12 and seeks views specifically from tax advisers, professions bodes, importers and businesses from Britain and overseas, it said.

From: https://www.fastener-world.com.tw/en/article/8741.html