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illuminem summarizes for you the essential news of the day. Read the full piece on Reuters or enjoy below:
🗞️ Driving the news: The UK government announced plans to implement a new import carbon pricing mechanism by 2027
• This mechanism, known as the carbon border adjustment mechanism (CBAM), aims to level the playing field for domestic producers by applying a levy on carbon-intensive imported goods from countries with lower or no carbon pricing
🔭 The context: CBAM will target products in sectors like iron, steel, aluminium, fertiliser, hydrogen, ceramics, glass, and cement
• The charge will be based on the carbon emissions associated with the production of these goods and the disparity in carbon pricing between the UK and the exporting country
🌍 Why it matters for the planet: The CBAM is designed to combat 'carbon leakage', where emissions are transferred to countries with laxer carbon pricing, undermining global decarbonization efforts
• By aligning the cost of carbon emissions for domestic and imported goods, the UK aims to encourage global reductions in emissions and incentivize green investment
⏭️ What's next: This initiative is part of the UK's broader strategy to transition to net zero emissions, and it complements the UK Emissions Trading Scheme
• The UK's approach follows the EU's introduction of a similar system, signaling a growing international trend towards carbon pricing mechanisms
💬 One quote: "This levy will make sure carbon intensive products from overseas... face a comparable carbon price to those produced in the UK, so that our decarbonisation efforts translate into reductions in global emissions" (Jeremy Hunt, UK Finance Minister)
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