UK starts consultations on a proposed carbon border tax

On 30 March the UK government unveiled a series of environmental and energy security policies including a consultation that could lead to the introduction of a border tax on carbon intensive goods. According to the Financial Times, as part of its ‘Green Day’ announcements, a consultation on “addressing carbon leakage” at the UK border will cover potential policy areas such as introducing a ‘carbon border adjustment mechanism’ (CBAM), mandatory product standards and measures to help grow the market for low carbon products. Under a CBAM, additional taxes could be placed on imports of products that are made using highly polluting processes, partly to safeguard domestic industry from goods produced in countries with less stringent environmental standards. The UK and EU are expected to increase coordination on their respective CBAMs.

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