The UK discusses the possibility of harmonizing the carbon market with EU mechanisms

Labor will look to make that move if it wins the election

Labor will look for ways to align the UK’s carbon market with the EU if it wins next month’s general election. This was reported by the Financial Times.

After Brexit, the United Kingdom and the European Union had separate carbon emissions trading markets (ETS). British exporters warn that in the future they may have to pay hundreds of millions of pounds in additional taxes under the European Cross-Border Carbon Adjustment Mechanism (CBAM), as the price of carbon emissions in the country is currently lower than in the EU.

With the UK’s equivalent of CBAM due to come into effect in 2027 – a year after the European cross-border carbon adjustment mechanism – the industry is also concerned that the UK market could be temporarily flooded with goods such as steel, steel, cement and fertilizers from global competitors.

One British industry representative noted that they have received private assurances that Labor, if elected, intends to align the ETS carbon market and CBAM tax scheme with the EU scheme.

Jonathan Reynolds, Shadow Business and Trade Secretary, noted that CBAM and the timing of its UK counterpart is an issue of great concern to industry. A Labor representative said that they are seeking to align the timing of carbon tax regimes in the UK and the EU, but may face practical problems in doing so.

Industry representatives argue that combining the ETS schemes will provide a larger and less volatile market.

Labor, which has an overwhelming lead in the polls ahead of the election, has also stated its intention, if elected, to establish closer trade ties with Europe and eliminate some of the regulatory differences that have arisen since Britain left the EU, improving existing arrangements.

As GMK Center reported earlier, traders predict that the price of carbon credits in the UK will rise. They expect the future government to introduce stricter climate policies against major polluters.