Industrial Policy & Trade Monitor· 2673 actions· ✨ 90 recent

The UK Finance Act 2026, which received Royal Assent on 18 March 2026, establishes the primary statutory framework for the United Kingdom Carbon Border Adjustment Mechanism (UK CBAM), granting HM Revenue & Customs the assessment, collection, and enforcement powers needed to apply a carbon-content levy on imports of aluminium, cement, fertilisers, hydrogen, and iron & steel from 1 January 2027. Two tranches of draft secondary legislation (the CBAM Regulations 2026 covering administration, rate calculation/carbon-price relief, emissions and verification, and transitory provisions) were published for technical consultation on 10 February 2026 (closing 24 March 2026) and again in Spring 2026 (closing 21 May 2026). The mechanism imposes a UK ETS-linked benchmark price on the embedded carbon of in-scope imports, with a credit for verified third-country carbon prices already paid, and — unlike the EU CBAM — has no transitional reporting phase and a narrower initial sectoral scope (no electricity).

On 12 March 2026 the UK Cabinet Office (Investment Security Unit) published its Government Response to the consultation on reform of the Notifiable Acquisition Regulations (NARs) under the National Security and Investment Act 2021 — the first major substantive overhaul of the NSI mandatory-notification schedules since the regime took effect on 4 January 2022. The reform splits Critical Minerals out of the existing Advanced Materials schedule into a standalone mandatory schedule covering all 34 minerals on the Critical Minerals Intelligence Centre's latest criticality assessment; splits Semiconductors into its own standalone schedule (capturing advanced packaging and specific chip-design processes); creates a brand-new Water sector schedule covering the 17 regional water and sewerage undertakers in England and Wales; refocuses Artificial Intelligence on entities that create or materially modify AI systems (excluding routine end-use); and refines Communications, Critical Suppliers to Government, Data Infrastructure, Energy and Suppliers to Emergency Services to reduce low-risk capture. An implementing Statutory Instrument is expected later in 2026; the existing NARs remain in force until that SI takes effect.

On 9 February 2026 the UK Office of Financial Sanctions Implementation (OFSI) published a comprehensively revised enforcement and monetary-penalties guidance following its July–October 2025 public consultation. The update introduces a Settlement Scheme (20% penalty discount for subjects who agree not to contest OFSI's findings within 30 business days), an Early Account Scheme (up to 20% discount for legal persons providing a timely senior-attested factual account), a revised voluntary-disclosure framework (maximum discount cut from 50% to 30% and renamed to cover both prompt self-reporting and full cooperation), a four-level case-assessment seriousness matrix (severity × conduct), and fixed monetary penalties of £5,000 and £10,000 for information, reporting, and licensing offences. A planned legislative amendment (requiring primary legislation) will subsequently double the statutory civil monetary-penalty cap from £1m / 50%-of-breach to £2m / 100%-of-breach; in the interim the Policing and Crime Act 2017 caps remain in force. The revised guidance is the foundational enforcement architecture for all UK financial-sanctions programs (Russia, Iran, DPRK, Syria, Belarus, Myanmar, and 10+ additional regimes).

Innovate UK (part of UKRI) opened the Growth Catalyst - Investor Partnerships Round 2 competition on 10 December 2025, allocating a minimum of £100 million in grant funding to UK-registered SMEs at seed-to-Series-A stage. Grants (60-70% of project costs for feasibility and industrial-research projects; 35-45% for experimental development) must be matched by private investment from an Innovate UK-approved investor partner, ranging from an equal match to double the grant amount depending on project category. Applicants must align with one of the priority sectors named in the UK's Modern Industrial Strategy ("Invest 2035"): advanced manufacturing, clean energy, digital and technologies, defence, creative industries, life sciences, or the Battery Innovation Programme. The competition closes 3 February 2026.

UK Export Finance launched the Critical Goods Export Development Guarantee (Critical Goods EDG), a lending-support scheme that offers an 80% government guarantee on commercial finance for UK-based suppliers of critical minerals to UK exporters. Eligible suppliers must produce at least 50% of their critical-mineral goods for UK exporters (lowered to 20% if the firm also earns at least 5% of turnover from overseas sales), and the mineral must appear on the UK Critical Minerals Intelligence Centre's 2024 criticality assessment or the associated growth-minerals list. The scheme targets commercial lending facilities above £25 million and lets suppliers access the guarantee even if they do not export directly, as long as their output feeds into UK exporters' end products.

Innovate UK, co-funded by the Department for Environment, Food and Rural Affairs (DEFRA), opened a GBP 7.8 million competition on 15 September 2025 under the Farming Innovation Programme's industry-led R&D Partnerships Fund ("Small R&D Partnership Projects", Round 4). The competition funds collaborative agri-tech R&D projects with total eligible costs of GBP 1-3 million each, aimed at improving productivity, sustainability, resilience and net-zero transition for English farmers, growers and foresters. It is open to UK businesses of any size, provided the collaboration includes at least one SME and no single partner exceeds 70% of eligible costs; the competition closed for applications on 5 November 2025.

The Subsidy Control Act 2022 (Royal Assent 28 April 2022; in force 4 January 2023) replaced EU state-aid rules as the UK's domestic subsidy-control framework, fulfilling an obligation under the UK-EU Trade and Cooperation Agreement (TCA). It establishes a principles-based self-assessment regime administered by a new Subsidy Advice Unit (SAU) at the Competition and Markets Authority (CMA), allowing UK public authorities to grant subsidies without prior Commission approval while remaining compliant with WTO subsidy disciplines and TCA obligations.