Carbon Emissions: UK Trade with EU
The question
To ask the Secretary of State for Energy Security and Net Zero, if he will make a comparative assessment of the potential impact of the Carbon Border Adjustment Mechanism introduced by Regulation (EU) 2023/956 of the European Parliament and of the Council of 10 May 2023 on the price of electricity in (a) Northern Ireland and (b) Great Britain after 1 January 2026.
Answered by Michael Shanks
The EU’s Carbon Border Adjustment Mechanism (CBAM) is in an implementation period until January 2026 and applies to exports of electricity to the EU but not electricity for the UK market. The EU Commission has said that it intends to finalise the regulation via legislation over 2025. It remains difficult to conduct an accurate assessment of any potential impacts.
The UK will continue to engage closely with the EU as it finalises the CBAM and will continue to raise the need for clarity on the practical implementation of the CBAM for trade in electricity, given the challenges involved.
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