- Introduction to CBAM: The UK is introducing a Carbon Border Adjustment Mechanism, effective January 1, 2027, to impose a tax on emissions from specific imported goods, aiming to prevent carbon leakage and support net-zero goals.
- Scope and Implementation: CBAM applies to defined goods from five sectors (aluminium, cement, fertilizers, hydrogen, iron, and steel), with the importer liable for the charge. Various exemptions exist, and the charge is calculated based on carbon emissions related to the goods.
- Regulatory Framework and Future Regulations: The draft legislation allows for future regulations by the Treasury and HMRC concerning emissions determination, pricing calculations, registration, enforcement, and compliance, ensuring effective administration of the CBAM.
Source Mayer Brown
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