Northern Ireland Scrutiny Committee raises concerns over impact of EU’s Carbon tax on businesses and consumers in Northern Ireland

The House of Lords Northern Ireland Scrutiny Committee has written to the Northern Ireland Secretary, Rt Hon Hilary Benn MP, renewing its deep concerns and seeking further clarity about the impact of the EU's Carbon Border Adjustment Mechanism (CBAM) on businesses and consumers in Northern Ireland as well as its potential economic costs. 

In particular the Committee questions how electricity generated in Great Britain and transmitted to Northern Ireland is treated under CBAM rules, and whether such flows could incur CBAM costs when entering Northern Ireland and, ultimately the Republic of Ireland. 

The letter follows a long‑running exchange between the Committee (and its predecessor Sub-Committee) and the Government dating back to November 2021, and comes just weeks after the EU's CBAM entered its next phase on 1 January 2026.  

The Committee has asked for a response within 10 days and has indicated it will continue to pursue the issue. 

The letter is available on the Committee's website:

https://committees.parliament.uk/publications/51212/documents/284188/default/