Proposed Carbon Border Tax Aims to Foster Green Steel Technologies

Picture of Written by: Liez Comendador
Written by: Liez Comendador
Carbon Border Tax to Be Proposed on Steel Imports to Encourage Greener Technologies

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As part of a £600 million support package to assist Britain’s two largest steelmakers, British Steel and Tata Steel, in investing in greener technologies and preventing the loss of thousands of jobs, the UK will propose a carbon border tax to levy imported steel.

According to the Financial Times sources acquiring knowledge of the issue, one possibility is implementing a carbon border adaptation mechanism similar to the one the EU agreed to last year, which will compel importers to pay tax when their steel imports’ carbon emissions exceed the specified limits.

he proposed tax on steel importers.

Steel production is a significant source of greenhouse gas emissions, accounting for around 7% of global emissions. The proposed carbon tax would be levied on the carbon dioxide emissions during steel production. The tax would be based on the amount of carbon dioxide emitted per ton of steel produced, with higher emissions resulting in higher taxes.

The tax would be phased in over several years, starting at a low level and gradually increasing over time. The government hopes this will give the steel industry time to adapt to the new requirements and invest in cleaner technologies.

The proposed carbon tax is part of a more comprehensive package of measures to reduce greenhouse gas emissions in the United Kingdom. The government has also announced plans to invest in renewable energy and phase out coal-fired power stations.

Encourage Greener Technologies

The steel industry has responded to the proposal with mixed reactions. Some companies have welcomed the tax as an opportunity to invest in cleaner technologies, whilst others have criticised it as a burden on the industry.

The two businesses that run Britain’s four surviving blast furnaces are hoped to be sufficiently persuaded by the package to invest in less carbon-intensive electric arc furnaces. These may be powered by electricity from renewable sources and recycling the substantial amount of scrap steel that the UK produces.


Pfeifer, Sylvia, and Jim Pickard. 2023. ‘UK to Propose Carbon Border Tax as Part of Steel Industry Aid Package’, @FinancialTimes (Financial Times):

Tong, Sebastian. 2023. ‘UK to Propose Carbon Border Tax on Steel Imports: FT’, @BLaw:

Ravi Ananthanarayanan. 2023. ‘Moneycontrol pro Panorama | UK’s Carbon Border Tax Proposal Poses Risk for Global Steel Industry’, Moneycontrol (Moneycontrol):


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