Select committee: Environmental Audit Committee
Conclusion 3
Fifth Report - Greening imports: a UK carbon border approach
Published 4 Apr 2022
Paragraph 32
Environmental Audit Committee Carbon border adjustment mechanisms All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Conclusion (the committee's words)
While net zero policies address the UK’s territorial production emissions, 43% of the UK’s consumption emissions arise from imports. The UK’s principal carbon pricing mechanism, the ETS, applies to domestic production, but no carbon price is currently applied to imports of the same products. A CBAM could address this, enabling a carbon price to be applied to consumption emissions arising from both domestic production and imports of products covered by the ETS. In particular, CBAM has the potential to help build support for green policies in historic manufacturing areas where opportunities for a renaissance in low-carbon UK-based manufacturing are likely to be greatest.
From: Environmental Audit Committee, Fifth Report - Greening imports: a UK carbon border approach (HC 737), paragraph 32, 4 April 2022
Government response
The government responded to the whole report on 21 June 2022 (deadline 4 June 2022).
Summary written by Accountability Index from the government's response. It is not the government's own words.The government says it agrees that multilateral solutions are needed and that "the risk of carbon leakage is real", and intends to consult later in 2022 on carbon leakage mitigation options, including whether a CBAM "could be appropriate", without committing to any course of action.
- The government agrees that "we need multilateral solutions" and says it is "committed to building on our COP26 climate leadership" by working with international partners towards a common global approach to carbon pricing and leakage.
- It intends to consult "later in the year" on carbon leakage mitigation options, including "whether measures such as product standards and a CBAM could be appropriate tools". It states the announcement "does not commit the Government to any course of action down the line".
- On alignment with wider policy, it "agrees with the importance" of aligning its approach with environmental, trade, development and fiscal policy, and will continue to engage the relevant Cabinet Committees.
- On linking the UK and EU emissions trading schemes, the government is "open to linking the UK ETS internationally in principle" and "is considering a range of options", with "no decision on any preferred linking partners" made.