14 November 2024

The UK government has recently responded to the public consultation on the introduction of the UK Carbon Border Adjustment Mechanism (CBAM), which is set to be implemented from January 2027.

This mechanism aims to address carbon leakage by placing a carbon price on certain carbon-intensive imports, from sectors such as aluminium, cement, fertiliser, hydrogen, and iron and steel.

The consultation, which ran from March 21 to June 13, 2024, received over 340 responses from various stakeholders, including British Marine. The Government's response confirms that the CBAM will apply to imports from the specified sectors, while products from the glass and ceramics sectors will not be included.

One of the key aspects of the CBAM is that the liability will depend on the greenhouse gas emissions intensity of the imported goods, and the difference between the carbon price in the country of origin and the carbon price that would have been applied if the goods were produced in the UK. Importers will be responsible for paying the carbon price, based on the emissions embodied in the imported goods.

The Government has emphasised that the CBAM is designed to support decarbonisation efforts and ensure that the UK remains competitive in the global market while reducing carbon leakage. The response also highlights that the sectoral scope of the CBAM will be kept under review beyond 2027.

A significant outcome of this consultation was the decision to exclude glass products from the initial scope of the CBAM, a positive result for the UK boatbuilding industry. 

Initially, the consultation included glass alongside other sectors, but after reviewing over 340 responses from various stakeholders—including industry representatives, trade associations, and environmental groups—the Government decided to narrow the scope. 

The UK government’s consultation response regarding the Carbon Border Adjustment Mechanism marks a significant step in the country’s climate policy, but by excluding glass products from the initial scope, the Government has acknowledged the unique challenges faced by this sector, while still emphasising the importance of decarbonisation. As the UK moves towards its 2050 net-zero target, the glass industry will need to balance competitiveness with sustainability, all while keeping an eye on potential regulatory changes in the future.

This decision reflects a broader trend in climate policy - the need to tailor regulations to specific industries, while fostering an environment that encourages innovation and sustainability. The ongoing dialogue between the Government and industry stakeholders will be crucial in shaping a fair and effective approach to carbon pricing in the UK.

If you have any questions please contact technical@britishmarine.co.uk