United Kingdom launches its own Carbon Adjustment Mechanism at the Border
The European Commission has wanted to make the Union a pioneer in the decarbonisation of its enterprises, both on the production side of the territory (with the Emissions Quota Exchange System, ETS) and on the import flows with the Carbon Adjustment at Frontiers Mechanism (CAFM), which has been gradually settling down since October 2023.
The British government, in turn, will establish its own Carbon Border Adjustment Mechanism (CBAM). Unlike the EU, which chose to go through a transitional period to collect data and then through a final phase of taxation and import prohibition for companies which would not have put in place the necessary measures, the UK government chose to consult a panel of voluntary undertakings in March 2024 and announced the arrival of a new company.import tax from 1 January 2027.
The two systems are similar in some respects: fields of application (steel, aluminium, cement, hydrogen, fertilizers), notion of greenhouse gas emission reporting, possibility of deducting the costs of decarbonisation efforts in supplier countries.
On the other hand, the British CBAM differs from the European system on several points. It will not require the purchase of certificates in order to continue to import products and will consist of directly taxing imported products with a carbon tariff that should be close to the European. Taxation will occur after an annual return is filed and will then be collected quarterly. As for the minimum import volume threshold, it will be £50 000 following consultation with companies (the government's proposal to leave was £10 000), while in the European Union the Commission imposed a threshold of €150 per consignment of goods.
The next priority for the UK Government will be to confirm all the regulations by publishing the necessary legal acts. Having consulted companies before the system was implemented will have helped to avoid misunderstandings and mismatches with the business world as has been the case in the EU.
To read more
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Fusce tortor lake, ornare dictum odio no, mollis tincidunt mi. Vivamus feugiat turpis ac consequattrices. Nam nec leo in nisi posuere vehicula. None porta tempus feugiat. Praesent shovel, urna sed placerat sodales, ex tellus ultricies velit, vitae auctor augue diam at quam. Praesent ornare arcu and sem curriculum molestie. Morbi congue arcu velit, a laoreet torture ultricies id. Duis vulputate lacinia magna, eget elementum mi pulvinar eget. Sed consectetur malesuada ultricies. In eget purus nect velit sodales ullamcorper eget in ligula. Mauris ulcers posuere lobortis. Nulla nisi purus, beaconra no is ac, faucibus lacinia torturer. Integer nunc duei, vehicula finishedbus had, euismod and orci. No mollis vestibulum luctus.
Interdum and malesuada fames ac ante ipsum primis in faucibus. Sed a ligula sagittis, eleifend metus ac, sagittis purus. Vivamus ut blandit dolor, id aliquam mi. Sed tempor tempus ornare. Sed nec risus a metus eleifend sagittis. Aenean had torture lectus. Aliquam varius iaculis curriculum. Aliquam stubborn gravida augue and elementum. Aliquam trestique interdum pretium. Nunc ut selerisk massa, sed venenatis diam. No vehicula luctus odio. Integer ac turpis massa.