The UK government has announced that it has started consultations considering a range of potential policy measures, including a carbon border adjustment mechanism (CBAM) and measures to help grow the market for low carbon products, to mitigate carbon leakage risk in the future and ensure UK industry has the optimal policy environment to decarbonize. The consultations will take place from March 30 to June 22.
“The vast majority of the world’s steel producers face no carbon costs, whereas UK steel producers faced an estimated £120m last year in carbon costs, dealing a damaging punch to our competitive position. We need a level playing field where imported and domestically produced steel face similar carbon costs, and a carbon border adjustment mechanism (CBAM) can deliver just that,” Gareth Stace, director general of the UK Steel trade association, said.
“As the UK steel industry moves in its transition to green steel production, it is essential that it will not be continually outcompeted by high-emission, imported steel. Europe is implementing its own CBAM, and the UK risks a damaging trade barrier with our biggest trade partner if we don’t quickly develop and implement our own measures,” he added.