UK Carbon Border Adjustment Mechanism Policy

The UK is implementing a Carbon Border Adjustment Mechanism (CBAM) to prevent carbon leakage by placing a carbon price on imports of carbon-intensive goods, coordinated across DEFRA, HM Treasury, and HMRC. The mechanism will interact with the UK Emissions Trading Scheme and support domestic decarbonisation in trade-exposed sectors. The policy is active with draft regulations published and focus on clarifying how CBAM operates alongside existing carbon pricing and free allocation policies.