The UK government has announced plans to ensure environmental and energy security, including the possibility of imposing an environmental tax on imports.
The government plans to consult on the introduction of a cross-border carbon tax and mandatory product standards to encourage the development of a market for low-carbon products. This move aims to reflect the European CBAM (carbon border adjustment mechanism) and impose an additional environmental tax on the imports of products manufactured using highly polluting technologies.
The UK and EU are expected to strengthen the coordination of their mechanisms for carbon adjustment of imports. It seems likely that the environmental tax on imports will initially target energy-intensive products such as pig iron, steel, cement, aluminum, fertilizers and hydrogen.
The British government had previously pledged to consult on a cross-border carbon tariff in 2022. The EU has already reached a political agreement on the introduction of a new carbon border adjustment mechanism (CBAM) for imports of steel, cement and aluminum. The implementation of SKDM in the EU could become an external incentive for the growth of China's carbon market.
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