UK CBAM 2026 Guide:
Rules, Registration and Compliance
UK CBAM starts on 1 January 2027. Businesses importing selected aluminium, cement, fertiliser, hydrogen, and iron and steel goods into the UK should prepare now by reviewing commodity codes, monitoring import values and engaging suppliers on emissions data.
This guide explains which imports are covered, when registration is required, how liability is calculated and what businesses need to do before the first return and payment deadline in 2028.
What Is UK CBAM?
The UK Carbon Border Adjustment Mechanism, known as UK CBAM, is a tax on the embodied emissions of certain carbon-intensive goods imported into the UK. It is designed to ensure that imported goods face a carbon cost more comparable with that faced by UK manufacturers under domestic carbon-pricing arrangements.
The regime was introduced through Part 5 of the Finance Act 2026. It applies to specified goods imported into the UK from 1 January 2027, including goods imported into Northern Ireland.
At launch, the regime applies to direct emissions embodied in in-scope goods. It also accounts for relevant precursor emissions where they are part of a complex CBAM good. Indirect emissions are not expected to be included before 2029.
UK CBAM Timeline
The first accounting period covers the full 2027 calendar year. Transitional rules apply to registration, returns and payment during the early stages of the regime.
UK CBAM Commodity Codes: Which Imports Are in Scope?
The regime applies only to goods within the commodity-code scope set out in Schedule 16 of the Finance Act 2026. Importers must retain the applicable 8-digit commodity code used in the customs declaration, alongside other required CBAM records.
Sector | Commodity codes in scope |
Aluminium | 7601, 7603, 7604, 7605, 7606, 7607, 7608, 7609, 7610, 7611, 7612, 7613, 7614 and 7616 |
Cement | 2507 00 80, 2523 10, 2523 21, 2523 29, 2523 30 and 2523 90 |
Fertilisers | 2808 00, 2814, 2834 21, 3102 and 3105, except 3105 60 |
Hydrogen | 2804 10 |
Iron and steel | 2601 12; Chapter 72, subject to specific exclusions; 7301–7311; 7318; and 7326 |
The iron and steel scope is broad, although Schedule 16 excludes certain ferro-alloy codes and heading 7204, which covers ferrous waste and scrap. Businesses should therefore assess the exact tariff classification of each imported product rather than relying on a broad product description.
Businesses should always confirm the current commodity code used on their import declaration, as tariff codes can change
UK CBAM Registration, Returns and Records
The person liable for the regime is generally the importer: the person in whose name the customs declaration is made. Where a customs declaration is made on behalf of another person, the liable person is normally the person on whose behalf it is submitted.
A tax agent can submit CBAM returns on an importer’s behalf. However, the agent cannot register instead of the liable person and does not take on the importer’s CBAM liability.
A business must register for UK CBAM if it meets the £50,000 threshold under either of these tests:
- It has imported £50,000 or more of in-scope CBAM goods during the previous 12 months.
- It expects to import £50,000 or more of in-scope CBAM goods during the next 30 days.
The threshold is based on the customs value of in-scope goods. It is not based on the quantity of goods, their embodied emissions or the potential CBAM liability.
For the first year of the regime, businesses that trigger registration during 2027 must register by 31 January 2028. The first return and payment are due by 31 May 2028, covering imports made during 2027.
CBAM Record-Keeping Requirements
Importers must keep written, including electronic, records for six years. Required records include:
- The 8-digit commodity code and description of the imported good
- The import date
- The customs value of the good
- The weight of the good
- Evidence supporting information included in the UK CBAM return
Weight must be recorded without packaging materials, at the time of import and in kilograms. HMRC may determine the weight of goods where the correct weight has not been reported or required evidence has not been retained.
HMRC may impose penalties for failures to register, submit returns, pay UK CBAM, provide accurate information or retain required records. The regime should therefore be managed as an ongoing customs, tax, procurement and supplier-data process.
How UK CBAM Liability Is Calculated
CBAM liability is the CBAM charge minus any available Carbon Price Relief.
UK CBAM liability = CBAM charge − Carbon Price Relief
The UK CBAM charge is calculated by multiplying the embodied emissions in imported goods by the applicable UK CBAM rate for the relevant sector.
CBAM charge = Embodied emissions × UK CBAM rate
The UK CBAM rate will vary by sector. It will reflect the effective carbon price in the UK, with an adjustment for free allowances granted to UK producers under the UK Emissions Trading Scheme. Rates are expected to be published quarterly from January 2027.
Actual Emissions Data and Default Values
Importers can use either actual emissions data from the overseas producer or UK government default emissions values to determine the embodied emissions in imported goods.
Actual data is usually the more accurate option, particularly where a supplier has lower-carbon production processes. However, the emissions data must be independently verified before it can be used for UK CBAM purposes.
Where verified actual data is unavailable, importers can use government default values. Default values will be published before the regime takes effect.
Businesses should begin requesting emissions information from suppliers early. The information needed may include product emissions intensity, verification evidence and details of any relevant carbon price paid outside the UK.
Carbon Price Relief
Carbon Price Relief, or CPR, may reduce CBAM liability where the embodied emissions in imported goods have already been subject to a qualifying carbon pricing scheme outside the UK.
Relief is not automatic. The importer is responsible for calculating the effective carbon price and retaining the required evidence. The amount claimed cannot exceed the CBAM liability due.
A qualifying scheme may include a carbon tax, emissions trading scheme or another scheme that prices emissions embodied in imported goods. The scheme must meet UK legal conditions, including requirements relating to government administration, mandatory participation and public information.
CBAM Carbon Price Verification Form
To claim Carbon Price Relief, an importer must obtain a completed carbon pricing verification form. This provides evidence of the carbon price applicable at the overseas installation that produced or processed the imported goods.
The form must be completed by an appropriate independent verifier that meets HMRC’s accreditation and independence requirements. Without a valid completed form, the importer cannot claim Carbon Price Relief.
Importers planning to claim CPR should request the following from suppliers:
- Verified emissions information
- Details of the overseas carbon pricing scheme
- Information on free allowances, thresholds, rebates or compensation
- A completed carbon pricing verification form
UK CBAM vs EU CBAM
Businesses importing into both the UK and EU should assess UK CBAM and EU CBAM separately. Although both mechanisms address carbon leakage, their scope, thresholds, timing and compliance processes differ.
Requirement | UK CBAM | EU CBAM |
Start date | 1 January 2027 | 1 January 2026 |
Covered sectors | Aluminium, cement, fertiliser, hydrogen, iron and steel | Aluminium, cement, fertilisers, hydrogen, iron and steel, and electricity |
Electricity | Not included at launch | Included |
Registration or authorisation threshold | £50,000 customs value of in-scope imports | Single 50-tonne net-mass threshold for CBAM goods |
Threshold measurement | Customs value | Net mass |
Liable party | UK importer | EU importer or, where relevant, an indirect customs representative |
Emissions at launch | Direct emissions, including relevant precursor emissions | Direct emissions, with indirect-emissions requirements applying in line with EU CBAM rules |
Carbon-cost mechanism | UK CBAM tax using a sector-specific rate | Purchase and surrender of EU CBAM certificates |
Carbon price recognition | Carbon Price Relief may reduce UK liability | Carbon price paid in the country of origin may reduce the certificate obligation |
First main deadline | First return and payment by 31 May 2028 | First annual declaration and certificate surrender by 30 September 2027 |
EU CBAM entered its definitive regime on 1 January 2026. The EU mechanism includes electricity in scope, unlike UK regime at launch.
Preparing for UK CBAM
Businesses with potentially affected imports should take five practical steps before CBAM begins:
- Map UK imports against the official UK CBAM commodity-code scope.
- Monitor the £50,000 registration threshold using customs-value data.
- Confirm the importer of record for each affected supply route.
- Request verified emissions data and carbon-price information from suppliers.
- Establish record-keeping and reporting processes before January 2027.
Preparation involves more than estimating a future tax cost. It requires reliable customs classifications, clear importer responsibility, structured supplier-data collection and evidence that can support emissions calculations and any Carbon Price Relief claim.
UK CBAM FAQs
Preparing for UK CBAM?
At Carbon Complete, we help businesses assess their CBAM exposure, review commodity codes, collect emissions data and prepare for upcoming registration and reporting requirements.
