The Conservative Party has announced a bold proposal to completely abolish carbon taxes on British industry if they regain power, arguing that such a move is essential to protect jobs in energy-intensive sectors. Conservative leader Kemi Badenoch contends that the current carbon tax regime is driving deindustrialization and has pledged to remove it "in its entirety."
This plan would include scrapping the UK Emissions Trading Scheme (ETS), established in 2021 to replace a similar European scheme post-Brexit, which limits carbon emissions from heavy industry, power, and aviation. Badenoch, who previously supported the ETS as a Treasury minister, now asserts that the net-zero-by-2050 target is "impossible" and advocates for a shift toward "cheap and reliable" energy, including repealing the Climate Change Act 2008.
Business leaders have voiced support for the proposal. Robert Flello, chief executive of Ceramics UK, described high energy costs as an "existential issue" for the industry, stating it "cannot afford to keep paying a carbon tax that our competitors simply don't face." Badenoch echoed this, claiming that carbon taxes and green levies have made "doing business in Britain much, much harder than it needs to be."
However, the proposal has faced sharp criticism. Labour's Energy Minister Chris McDonald labeled it a "multi-billion-pound unfunded spending commitment" that would "hammer industry" and leave "working people picking up the bill." The Energy and Climate Intelligence Unit (ECIU) warned that without a UK carbon price, revenues from exports to the EU—Britain's largest trading partner—could shift to EU coffers, undermining competitiveness.
The Conservatives' plan also includes abolishing the carbon price support for fossil fuel electricity producers and the upcoming carbon border adjustment mechanism (CBAM), set for introduction next year. Jess Ralston of the ECIU noted that a "well-designed" CBAM could rejuvenate British industry but depends on maintaining a domestic carbon price.
Other political parties have staked out contrasting positions: Reform UK supports scrapping all carbon taxes, the Liberal Democrats back using them to achieve net-zero emissions, and the Green Party proposes a major carbon tax on fossil fuel imports and domestic extraction. The debate highlights deepening divisions over climate policy and economic strategy in the UK.