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UK to impose green tax on imports from polluting factories

Cheap imported products made in polluting factories abroad may face new green import taxes and middle-income families will be given grants to make their homes more energy efficient under updated government plans to hit net zero by 2050.

The measures are part of a package of proposals that will be unveiled on Thursday by the energy secretary, Grant Shapps.

The government will announce a consultation on a new system of “carbon border taxes” designed to protect UK manufacturers from being undercut by countries with lax environmental rules.

The scheme, which would mirror a similar plan being implemented by the European Union, would effectively impose a charge on some imports from countries with less stringent climate policies. This is designed to prevent them from undercutting UK producers who will have to comply with increasingly stringent environmental regulations.

It is likely to initially target energy-intensive products such as iron and steel, cement, aluminium and fertilisers, as well as hydrogen, which is mostly produced from coal in non-EU countries.

The plan would ensure a “level playing field” for domestic producers and encourage other countries to reduce their reliance on coal power and to switch to renewables.

However, the consultation is likely to make clear that the government’s preferred outcome would be an international approach to carbon pricing and regulating emissions. Ministers are concerned that the UK should not be left at a competitive disadvantage.

The plan will be part of a wide range of updated net zero and energy policies to be announced on what has been called “energy security day”. Ministers will confirm that middle-income households will be given grants worth hundreds of pounds to make their homes more energy efficient under a new “Great British insulation scheme”.

Shapps will announce the plan to fund loft insulation, cavity wall insulation and smart heating controls. Unlike previous initiatives, which were targeted predominantly at the poorest households, 80 per cent of the new funding will go to households that are “able to pay”.

The money is expected to be given to people in council tax bands A to D, and the government will meet the bulk of the costs of any upgrades. The scheme, which will run over three years, will be funded using a levy on people’s energy bills known as the “energy company obligation”.

Ministers believe that people will make significant savings. Installing loft insulation can cost up to £1,100 but save £640 a year, and cavity wall insulation costs as much as £2,500 but can save £525 per year. Smart heating controls such as advanced thermostats and thermostatic valves cost up to £800 and can save £525 a year.

The scheme is part of measures that will be announced by the government in an effort to cut people’s energy use by 15 per cent by 2030.

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UK to impose green tax on imports from polluting factories

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