UK businesses overwhelmingly back carbon border tax  

Aerial view of colorful containers on cargo ships at the port of
Aerial view of containers on cargo ships at the port of Southampton, UK. Photo by anitalvdb on Adobe Stock

New polling data of UK manufacturers finds that businesses overwhelmingly support the UK government introducing a carbon border tax.

Ahead of the Autumn Statement, the UK Treasury is considering introducing a carbon border adjustment mechanism (CBAM). This is a tax on certain imports like steel and cement that produce a large volume of carbon emissions when they are produced. The EU introduced its own carbon border tax earlier in October 2023. 

This study by Stack Data Strategy and E3G shows that three-quarters of UK manufacturers (73%) back the UK introducing a CBAM, with fewer than one in ten (8%) opposing it.  

When the detail of the policy was shared with British manufacturing businesses, half (49%) estimated that it would have a positive impact on their business. Respondents commented that it would create a level playing field, ensuring that their business would not be undercut by cheaper products from countries with less stringent environmental regulations.  

UK manufacturers also strongly backed alignment with the EU. Seven in ten respondents (70%) believe any future UK carbon border measure should be aligned with the European scheme. Two-thirds (67%) believe the UK should formally link its Emissions Trading Scheme (UK ETS) with the EU ETS, a form of alignment that would exempt UK business from the EU CBAM.  

Significantly, the research found that more than six in ten (62%) businesses supported part of the funds recouped from the border tax being used to help developing countries to decarbonise their manufacturing processes.  

“A carbon border adjustment mechanism is clearly the right fit for UK industry. However, we cannot ignore the legitimate international concerns that exist around carbon border measures. Many are concerned that a CBAM would negatively impact developing countries. Offering climate finance would help them adjust to higher UK standards.” – Jonny Peters, Senior Policy Advisor 

Finally, UK businesses are very aware of the context in which carbon border taxes are being considered, and want to see more action on climate. Eight in ten (77%) manufacturers involved in the study said they are concerned about the negative impacts of climate change on their business and operations.  Over half (55%) believe that the UK government is not doing enough on green issues and the environment.  

The research also demonstrates that there is public support for policy proposals around carbon border adjustments. When the policy was explained, over half (51%) supported the introduction of a carbon border levy in the UK, four times more than those who opposed it (11%).   

Read the full report here.


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