British firms face £800m EU carbon tax bill under CBAM

British companies exporting to the European Union are facing a combined carbon tax bill of £800 million under the EU's Carbon Border Adjustment Mechanism (CBAM). The charge applies to imports of goods like steel, cement, and aluminium, where carbon costs in the UK are lower than the EU's carbon price. The bill reflects the difference between the UK's carbon price and the higher EU Emissions Trading System price. The cost is a direct financial hit for UK manufacturers and exporters who have not decarbonised their production processes. It also highlights a growing divergence between UK and EU carbon pricing. The UK has its own Emissions Trading Scheme but its carbon price has often traded below the EU ETS price, leaving British firms exposed to the border adjustment. For UK industry, the bill is a clear signal that carbon pricing is becoming a real trade cost. Companies that invest in low-carbon production now could reduce their exposure to CBAM charges in future years. The policy is designed to prevent carbon leakage, where production moves to regions with weaker climate rules.