Question to the Department for Business, Energy and Industrial Strategy:

To ask the Secretary of State for Business, Energy and Industrial Strategy, what assessment he has made of the potential impact of increasing carbon costs for the steel sector on carbon leakage.

UK Emissions Trading Scheme industrial participants, such as steel sector businesses, are provided with free allocations of emissions. This reduces exposure to carbon prices and mitigates the risk of carbon leakage. In 2021, they were worth over £2bn. Free allocations are guaranteed at current levels until 2026. The review into free allocation policy will continue into 2023 and will include consulting on changes to the calculations of free allocations post-2026. We are committed to consulting on carbon leakage mitigations this spring including measures such as product standards, the Carbon Border Adjustment Mechanism and policies to grow the market for low emissions industrial products.