Hm Treasury
Detail of outcome
The consultation Addressing carbon leakage risk to support decarbonisation ran from 30 March 2023 to 22 June 2023, and received over 160 submissions from stakeholders.
The consultation sought views on a range of potential policy measures to mitigate carbon leakage risk in the future and ensure UK industry has the optimal policy environment to decarbonise. Policies considered included a carbon border adjustment mechanism (CBAM), mandatory product standards (MPS), and other policy measures to help grow the market for low carbon products, as well as emissions reporting which could serve future carbon leakage and decarbonisation policies.
The full summary of responses and government response is available here.
After carefully considering all responses, the government will implement a CBAM by 2027, applying a charge on the carbon emissions embodied in imports from the following sectors: aluminium, cement, ceramics, fertiliser, glass, hydrogen, iron and steel. The delivery of the CBAM will be subject to further consultation in 2024.
The government also announced its intention to work with industry to establish voluntary product standards that businesses could choose to adopt to help promote their low carbon products to consumers; and to develop an embodied emissions reporting framework that could serve future carbon leakage and decarbonisation policies. These measures will also be subject to further technical consultation in 2024.
Original consultation
Consultation description
On 30 March, the government published an exploratory consultation considering a range of potential policy measures to mitigate carbon leakage risk in the future and ensure UK industry has the optimal policy environment to decarbonise. Potential policies include a carbon border adjustment mechanism (CBAM), mandatory product standards (MPS), and other policy measures to help grow the market for low carbon products, as well as emissions reporting which could support the implementation of potential mitigation policies.
Responses should be provided online (preferred) or by email to carbonleakage.consultation@beis.gov.uk.
Audience
This consultation is open to all interested parties both in the UK and internationally, but we anticipate it will be of particular interest to:
- Companies and representatives from industry and business including trade associations;
- Importers and exporters of products, including small and medium-sized enterprises, supply chain businesses, software houses and customs agents;
- International partners and multinational groups;
- Financial Reporting and Enterprise Resource Planning System providers;
- Companies and representatives in all other sectors with an interest in climate policy, including academia, thinktanks, cross-sector groups, and non-governmental organisations;
- Private citizens.
Contents
This consultation is set out in two parts. Part 1 sets out potential measures that the government could introduce to mitigate the carbon leakage risk in future. Part 2 sets out proposals on design and delivery features of embodied emissions reporting that could underpin future carbon leakage policy measures.
Related content
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The UK ETS Authority sought views on the development of the UK Emissions Trading Scheme (2022): Developing the UK Emissions Trading Scheme (UK ETS)
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A Call for Evidence (2021) in which the design and implementation of policies to encourage the market for the growth of low emissions industrial products were explored: Towards a market for low emissions industrial products: call for evidence
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The strategy (2021) that sets out how industry can decarbonise in line with net zero while remaining competitive and without pushing emissions abroad: