News Global Market CBAM 1405 21 January 2026
Among other things, associations are concerned about possible advantages for foreign competitors
The UK’s plan to introduce its own cross-border carbon adjustment mechanism (CBAM) in 2027 has many shortcomings and could accelerate the decline of British industry. This warning comes from representatives of the steel, cement, and chemical sectors, according to the Financial Times.
Industry groups say the UK Treasury, which is overseeing the introduction of the carbon tax, has not listened to their concerns and is building a mechanism that will put British manufacturers at a disadvantage.
In particular, Frank Aaskov, director of climate change policy at UK Steel, told the FT that in its current form, the policy will favor foreign competitors over domestic steel producers, undermining the investment decisions currently being made on decarbonization.
Legislation on the implementation of the UK CBAM is currently being considered by Parliament. Industry groups warn that time is running out to fix key flaws. These include, for example, the Treasury’s plans to apply a single rate to each sector covered by the mechanism, calculated on the basis of average emissions, rather than differentiating it by product type and country of origin, as the European scheme provides for.
Diana Casey, executive director of the Mineral Products Association, said the structure of the scheme must ensure that emissions from imports are not underestimated.
«By definition, using an average value will allow half of imports to declare lower emissions. This is unacceptable because it does not ensure fair treatment of carbon costs for some types of imports,» she added.
Industry representatives also warned that the UK’s CBAM scheme leaves the country’s exporters vulnerable. Steve Elliott, executive director of the Chemical Industry Association, says that while the EU has introduced a scheme to support European manufacturers exporting to markets that do not impose a carbon tax, the UK has not followed suit.
In addition, industry groups point out that the one-year time lag between the introduction of CBAM in the EU and the UK creates a risk of dumping on the British market, as global steel, cement, and fertilizer producers will try to avoid the European carbon tax.
Although there is support from industry for a UK CBAM, they are counting on the problems in its design being resolved.
The Ministry of Finance stated that the mechanism will ensure that imported carbon-intensive goods have a carbon price comparable to that paid by British companies. They added that they will continue to work with industry and evaluate the CBAM after its implementation.
It should be recalled that the European Union and the United Kingdom are starting negotiations on merging their carbon trading systems. This step will allow British companies to avoid the European carbon tax under the CBAM, which could affect exports to the bloc worth £7 billion.
