Conservatives Vow to Abolish Carbon Taxes on British Industry
The Conservative Party has announced a significant policy shift, committing to scrap all carbon taxes on British industry should they form the next government. This includes the UK Emissions Trading Scheme (ETS), which currently regulates carbon emissions from heavy industry, power, and aviation, and was established in 2021 following Brexit.
Kemi Badenoch, the Conservative leader, argues that the current carbon tax regime is accelerating deindustrialisation and making it considerably harder to conduct business in the UK. She has stated that the target of net zero by 2050 is "impossible" under the existing framework, proposing instead a strategy focused on "cheap and reliable" energy.
Economic and Environmental Impact
The proposed abolition would also encompass the carbon price support, levied on fossil fuel electricity producers, and the carbon border adjustment mechanism (CBAM), set to be introduced in January next year. While industry figures, such as Robert Flello of Ceramics UK, welcome the move as crucial for competitiveness, critics warn of negative consequences.
Labour has branded the Conservative proposal a "multi-billion-pound unfunded spending commitment" that would "hammer industry." The Energy and Climate Intelligence Unit (ECIU) also highlighted that without a domestic carbon price, UK firms exporting to the EU, Britain's largest trading partner, would still face carbon charges from the European Union, with revenues potentially transferring to EU coffers rather than the UK Treasury.
The Office for Budget Responsibility previously forecast ETS receipts of £2.6 billion for 2025/26, a notable decrease from the prior financial year. The debate underscores a growing divergence in economic and environmental policy among the UK's political parties, with Reform UK also advocating for the removal of carbon taxes, while Labour, the Liberal Democrats, and the Green Party support various forms of carbon taxation to achieve emissions targets.
