Government should progress its consultation on carbon leakage measures, including a carbon border adjustment mechanism (CBAM) and mandatory product standards by 2023 (See Pillar 6 for more discussion). This will enable Government to implement effective carbon leakage mitigations from 2026. |
561. It is positive that the Government is looking to consult on carbon leakage measures in relation to trade, including the option to establish a carbon border adjustment mechanism (CBAM). At the same time, we have heard concerns from stakeholders about the domestic carbon price. The Government should also consider how to minimise the upward pressure on carbon prices, such as when it sets a net zero consistent cap for the Emissions Trading Scheme or on the long-term role played by Carbon Price Support.