What Is UK CBAM and What Importers Need to Do by 2027

Businesses importing UK CBAM goods will need to retain supporting records from 1st January 2027. Those meeting the £50,000 UK CBAM registration threshold will become liable to register with HMRC, submit returns and pay any liability. To use actual emissions rather than government default values, importers will need verified emissions data from the overseas installations producing their goods.

Emissions data collection can be time-consuming, particularly where supply chains involve traders, distributors, multiple production sites or precursor materials. Importers should establish their exposure and engage suppliers ahead of the mechanism taking effect.

What is UK CBAM?

The UK Carbon Border Adjustment Mechanism (UK CBAM) is a new tax on the greenhouse gas emissions embodied in certain carbon-intensive goods imported into the UK.

Its purpose is to place a carbon price on specified imports that is comparable to the carbon costs faced by UK producers. The liability will broadly be calculated by multiplying the emissions embodied in an imported UK CBAM good by the applicable UK CBAM sector rate. Carbon Price Relief may be available where those emissions have already been subject to a qualifying overseas carbon pricing scheme.

UK CBAM will apply to relevant imports entering the UK on or after 1st January 2027. Unlike the EU mechanism, the UK scheme will operate as a tax administered by HMRC rather than through the purchase and surrender of certificates. Read the UK Government policy summary.

Which UK importers will be affected by CBAM?

UK CBAM compliance will affect the person responsible for importing a covered good. In most cases, this will be the person in whose name, or on whose behalf, the customs declaration is made.

The initial scope covers specified commodity codes in 5 sectors:

• Aluminium
• Cement
• Fertiliser
• Hydrogen
• Iron and steel

Not every product within these sectors is included. Applicability is determined by the commodity code used at import, rather than a general product description. Certain products, including specified scrap goods, are outside the initial scope.

Businesses should check their commodity codes against the current government list. This assessment should include finished and semi-finished products, as some items such as fasteners, profiles and fabricated components may be covered even if the business does not think of itself as importing raw materials.

What overseas supplier emissions data will importers need?

UK importers will have 2 ways to determine the emissions embodied in their goods for UK CBAM compliance:

1. Use actual, verified emissions data from the producer.
2. Use the default emissions value published by the UK Government for the relevant CBAM good.

Where actual data is used, the importer will need the product’s verified emissions intensity. This will generally be expressed as tonnes of carbon dioxide equivalent per tonne of product, or tCO2e per tonne.

For cement and fertilisers, the calculation uses functional units based on clinker and nitrogen content. Complex products may also need to include emissions embodied in relevant precursor goods used during production.

With overseas supplier reporting, a practical data request should cover:

• The legal name and address of the producing installation
• The identity of the installation operator
• The product and applicable commodity code
• The monitoring period covered by the data
• The quantity of the relevant goods produced
• The verified emissions intensity for each relevant good
• The direct production emissions included in the calculation
• Emissions embodied in relevant precursor goods
• The methodology and system boundaries applied
• Details of the independent verifier and its accreditation
• A satisfactory verification report or good-specific verification summary
• Where Carbon Price Relief is being claimed, the required evidence that the emissions were subject to a qualifying carbon pricing scheme

At launch, UK CBAM will apply to direct emissions within the prescribed system boundaries. Indirect emissions associated with electricity use will not be included when the tax begins and their inclusion has been delayed until 2029 at the earliest. Where actual emissions data is used, it must be calculated in line with the UK CBAM methodology and independently verified, rather than being based on a general corporate carbon footprint or an unverified product estimate.

Beyond compliance, we help organisations use CBAM insights to reduce exposure to default values, improve supply-chain transparency and support wider decarbonisation strategies.

Contact our team today for support.

FAQs

When does UK CBAM start?

UK CBAM will take effect on 1st January 2027. From this date, specified goods imported into the UK from the aluminium, cement, fertiliser, hydrogen, and iron and steel sectors may be subject to CBAM.

Businesses importing these goods should assess their exposure before the start date so that commodity codes, supplier information and emissions data requirements are understood in advance.

What is the UK CBAM registration threshold?

A business must register when the total value of its UK CBAM goods meets or exceeds £50,000 under either of two tests:

• The business expects to import at least £50,000 of CBAM goods over the next 30 days.
• On the first day of a month, the value imported during the preceding 12 months has reached at least £50,000.

For the second test during 2027, businesses only need to look back to 1st January 2027. The value is based on the customs value used, or that would be used, to calculate import duty.

The threshold applies to the total value of the business’s covered imports, rather than separately to each product, supplier or sector. Importers below the threshold should still monitor their position because changes in order values or purchasing patterns could bring them into scope.

Registration will open by 1st January 2028, and businesses becoming liable during 2027 will have until 31 January 2028 to register.

Who is responsible for UK CBAM compliance?

The person responsible for UK CBAM is generally the importer of the goods. This is normally the person in whose name the customs declaration is made or, where the declaration is made on behalf of another business, the person on whose behalf it is made.

The importer is responsible for determining whether the registration threshold is met, keeping the required records, submitting CBAM returns where required and paying any tax due.

Does UK CBAM apply to goods imported from the EU?

UK CBAM applies to goods imported into the UK from outside the UK, where they are imported under the commodity codes specified as in scope by the UK Government, regardless of the region they are imported from.

Where the emissions embodied in the goods have already been subject to a qualifying overseas carbon price, the importer may be able to claim Carbon Price Relief when calculating its UK CBAM liability.