New UK Carbon Tax Aims to Encourage Sustainable Metal Production
New UK Carbon Tax Aims to Encourage Sustainable Metal Production | OilPrice.com
Via Metal Miner
HM Treasury recently announced that the UK plans to enact a carbon tax on certain metals and natural resource imports into the country by 2027. The December 19 announcement said that steel, aluminum, and iron ore will be subject to the tax. This tax is currently known as the Carbon Border Adjustment Mechanism (CBAM).
“Goods imported into the UK from countries with a lower or no carbon price will have to pay a levy by 2027, ensuring products from overseas face a comparable carbon price to those produced in the UK,” HM Treasury said of the carbon tax.
“The new rules will tackle ‘carbon leakage,’ reducing the risk of production and associated emissions being displaced to other countries because they have a lower or no carbon price,” the organization added. “Carbon leakage undermines the country’s efforts to decarbonize as the world transitions to net zero.”
Carbon Tax Charges Dependent on Volume Emitted
The latest information states that charges applied under the plan will depend on the volume of emitted carbon in the imported goods’ production. CBAM will also operate with the UK Emissions Trading Scheme (UKETS). That came into effect on January 1, 2021, after the country departed the European Union. The mechanism was originally part of the EU Emissions Trading Scheme, which started in 2005 and covers about 45% of the bloc’s carbon emissions.
HM Treasury quoted The Carbon Capture & Storage Association’s Chief Executive, Ruth Herbert, as saying, “A key issue will be the linkage of the UK and EU ETS, so that we avoid unnecessary trade and fiscal barriers for UK goods exports.”
By Christopher Rivituso
ADVERTISEMENT
More Top Reads From Oilprice.com:
Average U.S. Natural Gas Prices Plunged by 62% in 2023
APA Acquires Callon Petroleum in $4.5 Billion Permian Deal
OPEC’s December Production Up, Not Down: Survey
Related Knowledge Center: Climate economics
Climate change is now a driver of the world’s economy. The impact is profound:
- Catastrophic weather events — hurricanes, floods, droughts, high temperatures — are more frequent and more extreme. The cost can be measured in both the initial damage caused and the longer-term impact on the economy.
- Vulnerable communities are increasing climate-related investments, hardening infrastructure and taking other protective measures.
- Investment in carbon capture and storage technologies is increasingly rapidly.
- Governments are making investments and crafting regulations to reduce emissions of carbon dioxide and other greenhouse gases.
On top of all of this is the cost of uncertainty. As the Fourth National Climate Assessment, released in 2018 by the U.S. Global Change Research Program, says, “The assumption that current and future climate conditions will resemble the recent past is no longer valid.”