UK CBAM: A Bold Step Towards Carbon Accountability in Trade - Our Guide
On October 30, 2024, the UK government announced its long-anticipated Carbon Border Adjustment Mechanism (CBAM), set to take effect on January 1, 2027. Designed to support the UK’s domestic decarbonisation agenda and address the challenge of carbon leakage, the CBAM introduces a framework to levy charges on imported carbon-intensive goods based on their carbon emissions.
This mechanism, inspired by the EU CBAM but distinct in its design, aims to safeguard UK industries from unfair competition posed by high-carbon imports and encourage trading partners to adopt greener practices. The announcement follows an extensive public consultation conducted in March 2024, which gathered insights from stakeholders across industries.
In this comprehensive guide, we’ll explore the nuances of the UK CBAM, its key features, how it differs from the EU’s framework, and practical steps exporters can take to prepare for this transformative policy.