Iron and Steel: Manufacturing Industries
The question
To ask the Chancellor of the Exchequer, how long she plans to exempt steel production from the UK Carbon Border Adjustment Mechanism.
Answered by Dan Tomlinson
The government is introducing a Carbon Border Adjustment Mechanism (CBAM) from 1 January 2027. It will apply to imported goods from the aluminium, cement, fertiliser, hydrogen, and iron and steel sectors
CBAM will apply to specific imported goods from the steel sector, as listed in Schedule 16 of the Finance Act 2026. There are no plans for exemptions from this list.
The UK CBAM is designed to address the risk of carbon leakage and to ensure that CBAM goods which are imported from overseas face a comparable carbon price to what is paid by manufacturers producing the same goods in the UK, under the UK Emissions Trading Scheme. As CBAM will only apply to imported products, it will not apply to domestic steel production.
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