UK Publishes Draft Subordinate Regulations...Stakeholder Feedback Open Until March 24
Concerns Over Burden of Quarterly Reporting and Carbon Cost Payments
Following the European Union (EU), the United Kingdom has also announced the introduction and implementation of a Carbon Border Adjustment Mechanism (CBAM), prompting the Korean government and the steel industry to work on response measures.
The Ministry of Trade, Industry and Energy announced that on the afternoon of the 26th it will hold an industry meeting on the UK CBAM at the main conference room of the Korea Iron and Steel Association in Seoul. At the meeting, participants will review the latest legislative developments in the UK and seek ways to minimize the impact on Korean companies' exports.
On the 10th (local time), the UK published draft texts of four subordinate regulations under its Carbon Border Adjustment Mechanism and began collecting stakeholder feedback, which will continue until March 24. These subordinate regulations are intended to supplement the primary legislation announced in April last year, and they spell out details such as how the system will be implemented and how the charges will be calculated. However, a methodology for calculating product-level carbon emissions was not included in the current drafts.
Industry representatives assessed that the UK has opted for a relatively flexible structure. In particular, they noted that, unlike the EU system, allowing certain qualified foreign accredited bodies to serve as verification entities could ease the initial shortage of verifiers. On the other hand, concerns were raised that the quarterly reporting of carbon emissions and the system for paying carbon costs could impose significant administrative and financial burdens on companies.
The ministry plans to consult with the UK government on the detailed content of the subordinate regulations based on industry feedback, and to continue monitoring legislative trends on Carbon Border Adjustment Mechanisms in major countries, including the UK.
Lee Jaekeun, Director-General for New Trade Strategy at the ministry, said, "As the EU and the UK design similar systems in different ways, there is a possibility that the compliance burden on related industries will increase," adding, "The government will continue to strengthen bilateral and multilateral cooperation to ensure that such systems do not function as carbon trade barriers for our companies."
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