- In late 2023, the previous government issued two consultations on UK Emissions Trading Scheme (UK ETS). The first consultation focusses on the development of UK ETS markets policies. The second consultation relates to proposals to alter free allocation methodology for stationary sectors to better target those most at risk of carbon leakage. It was also confirmed that the ETS would run until at least 2050, providing long-term certainty. Both consultations closed on 11 March 2024, and the outcome is expected to be published in the second half of 2024.
- In March 2024, the previous government launched a new 12-week consultation on the design and implementation of the new UK Carbon Border Adjustment Mechanism (UK CBAM), the response to which was published at the Autumn Budget 2024. It is now confirmed that the UK CBAM will be introduced from 1 January 2027 and target imports from overseas of carbon intensive products such as iron, steel, aluminium, fertiliser, hydrogen, and cement and will represent the gap between any carbon price applied in the country of origin and the carbon price faced by UK producers. Ceramics and glass will not be part of the products in scope initially. There will be five rates of UK CBAM for each product type. The registration is set at £50,000 per rolling 12-months period (compared to £10,000 in the initial consultation).
- Timing: both consultations on UK ETS closed on 11 March 2024, and the outcome is expected to be published in the second half of 2024. The policy design of the new UK CBAM may be subject to future consultation, stakeholder views or industry roundtable.
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