The NFU in England and Wales has recently engaged in discussions with Treasury officials regarding the completion of a new carbon levy, known as the Carbon Border Adjustment Mechanism (CBAM), targeting carbon-intensive products imported into the UK starting in 2027.

The proposed CBAM primarily focuses on items like fertilisers and doesn’t extend to goods such as food or other agricultural products. The levy will be applied to the carbon emissions generated during the production of the imported goods and the inequality between the carbon price in the country of origin and the UK’s carbon price faced by its own producers.

Major trading partners including the European Union, are also initiating similar approaches, although pricing variations exist within these schemes. Notably, numerous regions have no carbon pricing in place at all.

Chancellor Jeremy Hunt unveiled these plans, emphasising that the levy aims to ensure imported carbon-intensive products face a comparable carbon price to those produced within the UK.

This move aligns with the nation’s efforts to reduce global emissions. The NFU has expressed concerns about the potential impact of such a levy, particularly fearing increased prices for fertilisers.

This situation raises concerns about potentially displacing domestic food production with imports.