UK Tracking EU’s Carbon Border Tax for Leakage Risk, Reeves Says

The UK is monitoring the EU’s carbon border tax regime as the government assesses potential carbon leakage risks in the coming years, Chancellor of the Exchequer Rachel Reeves told lawmakers in a letter made public Wednesday.

Treasury officials are closely tracking proposed changes to the EU’s carbon border adjustment mechanism, including plans to extend the levy to selected steel- and aluminum-intensive downstream products, Reeves said in a letter dated March 31 to Parliament’s Treasury Committee.

“The government will take this into account when considering the potential carbon leakage risk faced by the UK over the coming years,” the ...