Measure
The UK Carbon Border Adjustment Mechanism (CBAM) applies a carbon price to imports of highly traded, carbon-intensive goods from the aluminium, cement, fertiliser, hydrogen and iron and steel sectors. The government is consulting on whether to expand the sectoral scope of the mechanism to include refinery products such as petrol, diesel and jet fuel, to address carbon leakage risk in the UK refining sector.
The government confirms it will introduce country-specific default values (CSDVs) for the mechanism aimed at strengthening the environmental integrity of the regime.
UK refineries, overseas refiners exporting to the UK and downstream users of refined fuel products. Businesses already within the current CBAM sectors are affected by the CSDVs change.
This aspect of the measure is not yet finalised. The CBAM itself takes effect from 1 January 2027 for its current five sectors, but the possible expansion to refinery products remains subject to consultation on feasibility and impact, with no decision yet taken or implementation date confirmed. The CSDVs for existing sectors are confirmed to apply from 2029.
The consultation itself acknowledges that significant design work remains before any implementation date could be set.
Given the sector's importance to UK energy security and the sensitivity of fuel prices for households and businesses, any eventual expansion is likely to be phased carefully and will attract close scrutiny.