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Britain to extend upcoming carbon border tax to include refined products, documents show
The consultation would add petrol, diesel and jet fuel to the levy and could raise costs for importers, airlines and households.
- On Wednesday, Chancellor John Healey unveiled a proposal to extend Britain's Carbon Border Adjustment Mechanism to refined oil products including petrol, diesel, and jet fuel, Treasury budget documents showed.
- The Treasury aims to "level the playing field" by protecting domestic refineries in Pembrokeshire, Cheshire, Hampshire, and the Humber from cheaper, carbon-intensive imports that undercut local industry costs.
- Treasury documents admit the "carbon charge" could raise prices for households and supply chains; Airlines UK boss Tim Alderslade warned the tax would inflate holiday fares and erode aviation competitiveness.
- The expansion remains subject to government consultation on feasibility, while the CBAM currently applies to aluminum, cement, fertilizer, hydrogen, and iron and steel starting January 1, 2027.
- Officials say the levy helps reduce "carbon leakage" by preventing emissions displacement to countries with lower carbon prices, giving British businesses confidence to decarbonize while retaining high-value industrial capability.
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Britain to extend upcoming carbon border tax to include refined products, documents show
Britain will seek to include refined products in its new carbon import levy which is due to begin on some products from 2027, Treasury budget documents published on Wednesday showed.
·London, United Kingdom
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UK turns carbon border taxes into a defence of domestic refining
Britain is seeking to extend carbon border charges to refinery products, linking its climate policy more closely with the future of domestic fuel manufacturing. The proposal would address a competitive concern for British refineries: they face carbon costs that some overseas suppliers do not. The government hopes that narrowing this difference will support investment in cleaner operations while preserving industrial capabilities considered impor…
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