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TAX
UK to bring in carbon border tax in 2026
WHAT?
Starting in 2026, the UK will tax imports with a high carbon content, mirroring similar plans in the EU. The levy was announced in the Autumn Statement.
WHY?
The levy will stop companies using the UK to circumvent the EU carbon regime to cut costs. It will also land the Treasury £3bn in tax.
HOW?
The UK will apply a carbon adjustment mechanism at the border. Importers and exporters may face higher costs and more paperwork when it comes in.
£3bn
Energy UK calculates the Treasury is losing out on almost £3bn of revenue annually
£500m
The EU will capture £500m extra a year if UK prices continue at a discount – Energy UK
£41
The UK carbon price is £25 a tonne lower than the EU (£66), giving room for more tax
