UK and EU poised to strike deal sparing British business from carbon border tax

"The EU is introducing a carbon border adjustment mechanism (CBAM) on 1 January targeting imports produced using carbon-intensive methods, such as steel, glass and fertiliser. Businesses have been concerned about the impact of the EU tax on UK consumer bills and the prospect of cheap goods originally destined for Europe, such as Chinese steel, flooding the British market. The UK is introducing its own version of the tax but not until 2027."

"The Guardian understands that the EU and UK are working on mechanisms that would shield British exporters from the levy's impact and that a temporary deal is now viewed by both sides as likely. An agreement would represent a boost to businesses that rely on trade with the EU. It comes ahead of the next UK-EU summit, which has been pencilled in for May or June."

The EU will introduce a carbon border adjustment mechanism (CBAM) on 1 January targeting imports produced with carbon-intensive methods such as steel, glass and fertiliser. The UK will introduce a similar levy in 2027. Businesses fear higher consumer bills and the possibility of cheap goods diverted from the EU market entering Britain. Ministers seek a temporary exemption until UK and EU emissions schemes align. Negotiations are under way on mechanisms to shield British exporters, and a short-term deal is now considered likely ahead of a May-June summit. Talks also cover defence cooperation and a youth mobility scheme.

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