UK Carbon Border Adjustment Mechanism (“CBAM”)
On 9 April 2026, HM Revenue & Customs (“HMRC”) published a technical consultation on draft secondary legislation that will come into effect, alongside the introduction of the UK CBAM on 1 January 2027.
The CBAM will impose a levy on the greenhouse gas emissions embodied in certain highly traded, carbon-intensive products imported into the UK. The draft secondary legislation relates to the legislative requirements associated with the administration of the tax, including embodied emissions, and monitoring and verification of emissions data.
The consultation closes on 21 May 2026.
Carbon Price Support
On 16 April 2026, the government confirmed its intention to remove the Carbon Price Support (“CPS”) from April 2028.
The CPS is a tax on fossil fuels used in electricity generation, introduced in 2013 to strengthen the carbon price for electricity generation. The government believes the levy “has done its job and is no longer fit for purpose” and will legislate for the removal of the CPS in a future Finance Bill.
The Government statement is available here.
Emissions Trading for Maritime Activities
The Greenhouse Gas Emissions Trading Scheme (Amendment) (Extension to Maritime Activities) Order 2026 was published on 2 April 2026.
The Order expands the UK Emissions Trading Scheme (“ETS“) from 1 July 2026 to cover carbon dioxide (CO2), methane (CH4), and nitrogen dioxide (NO2) emissions arising from certain maritime activities.
Operators of certain ships arriving at ports in the UK must obtain an emissions monitoring plan setting out the processes by which emissions associated with their ships’ activities will be determined. For each scheme year, operators must monitor, independently verify, and report their maritime emissions, and subsequently surrender an equivalent number of allowances.
