Question to the Department for Energy Security & Net Zero:

To ask the Secretary of State for Energy Security and Net Zero, whether her Department has made representations to HM Treasury on the inclusion of imported electricity in Carbon Border Adjustment Mechanism taxation.

Electricity generation was not included within the initial sectoral scope of the UK Carbon Border Adjustment Mechanism (CBAM), announced in December 2023. The approach aligns with free allowance allocations, under the UK Emissions Trading Scheme (ETS), which are not provided to electricity generators.

In making the decision, the government looked primarily at three factors: inclusion in the UK ETS, carbon leakage risk, and feasibility and effectiveness.

The sectoral scope of a UK CBAM will remain under review. The design and delivery of a CBAM is subject to consultation, closing on 13 June 2024.