Policy win: Labour Party’s manifesto sets out plans to bring in a carbon border adjustment mechanism in 2027

Labour commits to implementing a carbon border adjustment mechanism (CBAM) in 2027, signaling it is committed to boosting jobs in the low carbon economy. The announcement backs up Labour’s ambition for a “fairer, greener Britain” while addressing concerns from voters and the business community.

The Labour Party has today announced it intends to follow Government plans to introduce a carbon border adjustment mechanism (CBAM) in 2027.

With its manifesto pledge, Labour has shown it is serious about tackling climate change in a way that aligns with both fiscal responsibility and economic opportunity. For a party keen to avoid being characterised as having a “spend, spend, spend” approach to tackling climate change, this policy represents recognition of market-driven approaches that incentivise private sector innovation while promoting green jobs.

For Labour, the CBAM is more than just a climate policy—it’s a statement of intent. It aligns with the party’s vision of a “fairer, greener Britain” by creating opportunities for low-carbon industries and high-quality green jobs. Crucially, it also addresses concerns from Red Wall voters, who may be skeptical of climate policies seen as overly reliant on public spending. By proposing a CBAM, Labour demonstrates that fiscal responsibility and climate ambition can go hand in hand.

The policy also resonates with the business community, which has been calling for clearer long-term signals to guide investment in decarbonisation. A CBAM sends a strong market signal, encouraging companies to innovate and compete in the growing global market for sustainable products.