The Prime Minister is considering a carbon tax on imports that would hinder companies outsourcing their emissions and also protect farmers and local producers from being undercut from low-regulation rivals.
The proposals would first target industrial production such as steelmaking but could eventually include agriculture, according to the Telegraph.
Outsourcing emissions is a concept whereby companies or people keep their local carbon footprint low, but are reliant on imported products and foreign production whose polluting emissions they have no control over.
It is also known as carbon leakage.
Any move to tax imports into the UK could be met with disagreement from free marketers who’ve hoped that Brexit would see a flurry of free trade deals for the UK that cut the cost of imported goods for consumers.
The UK’s farmers and manufacturers, however, could benefit from the move at a time when the taxes and levies on imports have come under the radar, thanks to the planned UK-Australia trade deal.
A spokesman for BEIS told the newspaper: “We recognise the importance of making sure our policies to tackle climate change are not undermined by emissions, industrial activity and jobs simply moving overseas.
“We are therefore committed to encouraging our trading partners to work with each other to mitigate the effects of climate change through diplomacy, so that different countries are not regulating emissions at different rates.”
However, Business Secretary Kwasi Kwarteng has previously spoken out about the consequences for UK consumers of slapping a carbon tax on imports unless the move ir replicated in other major trading nations as well.