UK Emissions Trading Scheme

Treasury written question – answered at on 13 March 2024.

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Photo of Stephen Crabb Stephen Crabb Chair, Welsh Affairs Committee, Chair, Welsh Affairs Committee

To ask the Chancellor of the Exchequer, whether he plans to make an assessment of the potential merits of providing relief from the emissions trading scheme to businesses that export products to external markets.

Photo of Gareth Davies Gareth Davies The Exchequer Secretary

The UK is a world leader on carbon pricing. That is why we have an ambitious carbon pricing system, which ensures that polluters pay for their emissions.

Those businesses are protected from carbon leakage in the form of free allowances under the Emissions Trading Scheme, and from 2027, some UK sectors will be protected from carbon leakage by a UK CBAM. The CBAM is a charge on imports and is unlikely to be a suitable tool to address the carbon leakage risk related to exported goods.

The government will continue to assess the impact of carbon pricing on carbon leakage risk for UK industry, including for businesses that export products abroad.

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