UK CBAM · for importers
UK CBAM: the importer’s first year
UK CBAM, the carbon border adjustment mechanism, is a tax on the emissions embodied in imported aluminium, cement, fertiliser, hydrogen, and iron and steel, and it starts on 1 January 2027.
The importer pays it, the overseas producer supplies the emissions data, and the register does not open until 1 January 2028.
This page walks through the first cycle date by date, and sets out what a return will need.
The law
A tax on imports, not a reporting duty
Section 142(1) of the Finance Act 2026 creates “a tax called the carbon border adjustment mechanism”.
It is charged on the emissions embodied in a CBAM good when the good is imported into the UK, and section 146(1) makes the importer the person liable.
HMRC administers it, and its policy summary describes the purpose as giving imported carbon-intensive goods a carbon price comparable to the one UK manufacturers pay.
That makes it a relative of the UK ETS, which prices the emissions of UK producers in the same sectors.
It is not a reporting framework.
It asks nothing of a company’s annual report, and it sits apart from SECR, ESOS and UK SRS, which our map of carbon reporting requirements in the UK covers.
Nor is it a “carbon tax” in any statutory sense: the UK has no instrument by that name, only the UK ETS, the Climate Change Levy and now CBAM.
Where the rules sit
| Instrument | What it does |
|---|---|
| Finance Act 2026, Part 5 | Creates the tax, names the importer as liable, sets the start date |
| Schedule 16 | Lists the CBAM goods by commodity code |
| Schedule 17 | Registration, returns, payment and enforcement |
| S.I. 2026/830 | Moves every first-cycle date to bridge 2027 |
| S.I. 2026/995 | How embodied emissions are calculated and verified |
| Force of law notices | Reference documents, including the System Boundaries Document |
Source: Finance Act 2026 s.142(2); HMRC CBAM collection
Scope
The goods are listed by commodity code, not by sector
Five sectors are named in section 143(3), but Schedule 16 decides which goods inside them are caught.
A sector name is therefore not the scope: “all steel imports” is wrong, because scrap and eleven ferro-alloy codes are outside it.
HMRC can amend the table as the UK Tariff’s commodity codes change, so a code list checked in 2026 needs checking again before each return.
| Sector | Commodity codes in scope (Schedule 16) | Worth knowing |
|---|---|---|
| Aluminium | 7601, and 7603 to 7614, and 7616 | The table has no 7602 and no 7615. |
| Cement | 2507 00 80; 2523 10; 2523 21; 2523 29; 2523 30; 2523 90 | Emissions are counted per tonne of clinker contained. |
| Fertilisers | 2808 00; 2814; 2834 21; 3102; 3105 except 3105 60 | Emissions are counted per tonne of nitrogen contained. |
| Hydrogen | 2804 10 | One code. |
| Iron and steel | 2601 12; Chapter 72 except 7204 and eleven named 7202 codes; 7301 to 7311; 7318; 7326 | Ferro-manganese, ferro-chromium and ferro-nickel codes are in; ferrous scrap is out. |
Glass and ceramics were in the 2024 consultation and were left out of the final design.
Goods of UK origin under the UK’s non-preferential rules of origin are not charged.
Private individuals importing for non-commercial purposes are not liable.
The whole UK is in scope, Northern Ireland included, and so are goods entering from the Crown Dependencies, the Overseas Territories and the UK Continental Shelf.
Who registers
The £50,000 test is a value of goods, not of turnover
Schedule 17 paragraph 2(2) sets two limbs, and meeting either triggers registration.
The look-back limb: on the first day of a month, CBAM goods imported in the course of a business during the preceding 12 months had an aggregate value of “£50,000 or more”.
The look-forward limb: CBAM goods of that aggregate value are expected to be imported before the end of the next 30 days.
At exactly £50,000 the test is met, and the threshold was raised to that figure from the £10,000 first proposed, as the 2024 government response records.
It counts only CBAM goods, so a business importing mostly non-CBAM goods can be caught by one large steel order.
Some goods drop out of the count: UK-origin goods, goods that qualify for returned goods relief, and goods charged and then exported.
Goods processed under a special customs procedure count at the value of the CBAM portion, and goods sent for outward processing count only for the value added abroad.
HMRC’s collection says that if you do not need to register, “you’ll still need to keep records to prove you’re not liable for the tax.”
The look-back rolls, so the test runs again on the first day of every month.
UK CBAM — do you trigger registration?
Value of CBAM goods only (the listed commodity codes), imported in the course of a business. £.
Enter either figure to see the result.
Finance Act 2026 Sch 17 para 2(2): “£50,000 or more” on either limb. Para 2(3) leaves out UK-origin and returned goods and goods charged then exported. First-cycle dates: S.I. 2026/830 reg 2.
The liable person
The importer pays; the producer supplies the data
The importer is the person in whose name the customs declaration is made, and where the declaration is made on someone else’s behalf, it is that other person.
Where no declaration is needed, it is the person on whose behalf the good is imported.
HMRC’s policy summary lets an importer appoint a tax agent to file returns, but the agent “cannot register for CBAM on behalf of the liable person and no liability will be attached to the tax agent”.
So a freight forwarder or customs broker that submits the entry does not take on the tax.
The overseas producer never pays UK CBAM.
Its part is to provide a verified emissions intensity for the goods, and that request is where most importers’ work will sit in 2027.
The tax point in most cases is the moment the good becomes liable to import duty, or would do if the duty were not disapplied; for goods with no import duty, it is when they enter the UK.
Year one
The tax starts a year before the register opens
Liability accrues on goods imported from 1 January 2027, but HMRC’s CBAM collection says registration “will open on 1 January 2028”.
The gap is bridged by the transitory regulations, S.I. 2026/830, made on 14 July 2026 and in force on 1 January 2027.
For anyone who first triggers registration in 2027, they substitute a fixed deadline of 31 January 2028 for the usual 30-day window.
They treat the whole of 2027 as one accounting period, with the return and the payment both due before the end of 31 May 2028.
Two quarters follow in 2028, and after the transitory period ends the ordinary rule — register within 30 days of triggering — applies again.
Regulation 3 also adjusts the late-return penalty table in Schedule 24 to the Finance Act 2021, so the penalty regime reaches the first long return.
An importer who reads “starts 2027”, finds no service to register with and waits has not been given a year off: the charge on 2027 imports is running.
The first cycle
- 1 Jan 2027Tax applies to CBAM goods imported from today
The 2027 accounting period runs to 31 December 2027.
- 1 Jan 2028The registration service opens
Liability for 2027 has already accrued.
- 31 Jan 2028Registration deadline for anyone triggered in 2027
Replaces the ordinary 30-day window for this cohort.
- 31 May 2028Return and payment for 2027
One return for the twelve months.
- 31 Jul 2028Return and payment, January to March 2028
First quarterly period.
- 29 Sep 2028Return and payment, April to June 2028
Second quarterly period.
Source: S.I. 2026/830 reg 2; HMRC CBAM collection
The return
Embodied emissions × rate, less Carbon Price Relief
HMRC’s policy summary sets out the calculation in three steps.
The CBAM charge is the embodied emissions multiplied by the CBAM rate, which section 149(1) ties to “the sectoral domestic price” for the good.
Carbon Price Relief is subtracted where a qualifying carbon price has already been paid abroad, and the result is the liability.
Only direct emissions are charged, and the emissions of a UK-produced precursor that comes back inside a complex good are deducted first.
| What the return needs | Where it comes from | Status at 30 September 2026 |
|---|---|---|
| Weight of each CBAM good | Your import records; reported in kilograms, converted by HMRC to tonnes | Rules made in the Administrative Provisions Regulations |
| Verified emissions intensity (tCO₂e per functional unit) | The overseas producer, with evidence of verification by a qualifying verifier | S.I. 2026/995 |
| Or: a default emissions value | Published by the government | Not yet published |
| The CBAM rate | Set by the rate regulations from the sectoral domestic price | Rates guidance not yet published |
| Carbon Price Relief | Evidence of a carbon price paid under a qualifying scheme | Provisional list, 27 Aug 2026 |
The unit matters: it is tonnes of good for most codes, tonnes of clinker for cement and tonnes of nitrogen for fertilisers.
What counts as embodied emissions, which processes are included and which inputs are precursors are all fixed by the “System Boundaries Document”, version 1.00 of 10 July 2026, which regulation 2 of S.I. 2026/995 incorporates by reference.
The document is versioned, so a later version can change the answer without any change to the regulations.
For goods imported in 2027, HMRC says to use verified intensity for the 2027 calendar year if it exists, and otherwise verified 2026 data.
That makes 2026 production data the one piece of year-one evidence an importer can start collecting now.
The DESNZ conversion factors for company reporting are a different dataset and are not CBAM default values.
HMRC’s collection says guidance on rates and default emissions values will be published before the tax starts.
Until it is, any UK CBAM rate or default value in circulation has no official basis.
UK and EU
Two taxes, and both apply until they are linked
The EU’s CBAM moved into its definitive phase on 1 January 2026, a year ahead of the UK’s.
HMRC says its monitoring and verification methods are “broadly designed to support interoperability with the EU CBAM”.
That can let one verified dataset from a supplier serve an importer in both markets.
It does not make an EU declaration a UK return, or a UK payment a credit against EU liability.
The UK–EU Common Understanding of 19 May 2025 aims at mutual exemptions from each side’s CBAM through a link between the two emissions trading systems.
That link had not been concluded when this page was checked, and no date for it has been confirmed by either government.
Until a link exists, a UK exporter selling steel into the EU faces the EU CBAM at the EU border, and an EU exporter faces the UK CBAM here.
Carbon Price Relief is the mechanism that recognises a foreign carbon price, and HMRC’s list of qualifying schemes was published on 27 August 2026 as provisional.
The other side of the border
What CBAM changes for UK producers
UK manufacturers in CBAM sectors receive free UK ETS allowances to protect them against carbon leakage.
The UK ETS Authority’s free allocation review decided that free allocation for sectors covered by UK CBAM will be phased out from 2027, on a trajectory that mirrors the EU’s.
S.I. 2026/278 sets the reduction factors that do this, and each can be changed by order before the preceding 31 December.
The Authority itself says its free allocation policy may change following the outcome of a linking agreement with the EU.
How the UK ETS works for those installations, and the annual cycle it imposes, is set out in our guide to the UK emissions trading scheme.
For a manufacturer that both imports CBAM goods and runs a UK ETS installation, the two regimes meet on the same product lines, as our manufacturing sector guide discusses.
| Scheme year | UK CBAM reduction factor |
|---|---|
| 2027 | 0.975 |
| 2028 | 0.95 |
| 2029 | 0.9 |
| 2030 | 0.775 |
Before 1 January 2027
Five things an importer can do this quarter
Map the codes. Run twelve months of import entries against Schedule 16 and find which lines are CBAM goods.
Name the importer. Confirm in whose name each declaration is made, because that person is liable, whatever the contract says about who bears the cost.
Test the threshold. Apply both limbs to the value of CBAM goods alone, and repeat the test monthly.
Ask suppliers for data. Request verified emissions intensity per functional unit for 2026 production, with evidence of who verified it.
Keep records either way. Records are needed to show liability, or to show why there is none.
The CBAM section of our carbon compliance consultancy guide sets the tax beside the other regimes a manufacturer or importer may face.
Verification of supplier data is its own discipline; how greenhouse gas statements are verified in general is covered in our page on ISO 14064.
To talk through a specific supply chain, you can book a free 15-minute call.
Frequently asked
Questions people ask
Is UK CBAM a tax or a reporting requirement?
A tax. Part 5 of the Finance Act 2026 creates "a tax called the carbon border adjustment mechanism", charged on the emissions embodied in specified goods when they are imported into the UK and administered by HMRC. It has a registration duty, a return and a payment. It is not a disclosure regime and sits outside SECR, ESOS and UK SRS.
When does UK CBAM start?
On 1 January 2027. Section 158(1) of the Finance Act 2026 says Part 5 has effect for goods imported into the UK on or after that date. The registration service does not open until 1 January 2028, but the charge runs from the first day of 2027.
Which goods does UK CBAM cover?
Goods in five sectors — aluminium, cement, fertilisers, hydrogen, and iron and steel — but only those listed by commodity code in Schedule 16 to the Finance Act 2026. Ferrous waste and scrap (heading 7204) and eleven named ferro-alloy codes are outside it. Glass and ceramics were consulted on and left out.
Does the £50,000 CBAM threshold mean turnover?
No. It is the aggregate value of CBAM goods imported in the course of a business. A person triggers registration if, on the first day of a month, those imports in the preceding 12 months came to £50,000 or more, or if imports of £50,000 or more are expected before the end of the next 30 days. At exactly £50,000 the threshold is met.
Who is liable if a customs agent makes the import declaration?
The importer: the person in whose name the declaration is made or, where it is made on someone else’s behalf, the person on whose behalf it is made. A tax agent may file CBAM returns for the importer, but cannot register on its behalf and carries no liability. The overseas producer supplies emissions data; it does not pay UK CBAM.
When is the first UK CBAM return due?
Under the transitory regulations (S.I. 2026/830), 2027 is a single twelve-month accounting period, and both the return and the payment for it are due by the end of 31 May 2028. Anyone who first triggers registration in 2027 must register by 31 January 2028. Two quarterly periods follow in 2028, due 31 July and 29 September 2028.
What is the UK CBAM rate, and what are the default values?
Neither had been published when this page was checked. HMRC says it will publish guidance on rates and default emissions values for each sector before the tax starts. This page gives no figure for either, and any figure quoted before HMRC publishes it has no official basis.
Does UK CBAM apply in Northern Ireland?
Yes. HMRC’s policy summary says CBAM applies across the whole of the UK, including Northern Ireland, and that goods entering the UK from the Crown Dependencies (including the Isle of Man), the Overseas Territories and the UK Continental Shelf are subject to it.
Will an EU CBAM declaration cover UK CBAM?
No. The UK and EU mechanisms are separate taxes with separate returns, and no linking agreement was in force when this page was checked. HMRC designed its monitoring and verification methods to be broadly interoperable with the EU CBAM, which can let one set of supplier data serve both, but interoperable method is not mutual recognition of liability.
Can goods imported in 2027 use 2026 emissions data?
Yes, as a fallback. HMRC’s policy summary says an importer should use verified emissions intensity for the calendar year of import if it exists; for goods imported in 2027, verified data from the 2026 monitoring period may be used where no verified 2027 data is available.
Sources
Primary sources
Every figure, date and status on this page traces to the instrument’s owner. Secondary commentary is never the source for a number.
- legislation.gov.ukFinance Act 2026 (2026 c. 11), Part 5 — Carbon border adjustment mechanism, ss.142–158
The charge (s.143), the importer as liable person (s.146), the rate formula (s.149) and the 1 January 2027 start (s.158(1)).
- legislation.gov.ukFinance Act 2026, Schedule 16 — CBAM goods by commodity code
The goods in scope, and the scrap and ferro-alloy codes left out.
- legislation.gov.ukFinance Act 2026, Schedule 17 paragraph 2 — duty to register
"£50,000 or more" on a 12-month look-back or a 30-day look-forward; the 30-day registration window.
- legislation.gov.ukS.I. 2026/830 — CBAM (Transitory Provision) Regulations 2026, regs 1–3
Registration by 31 January 2028; the 2027 accounting period; return and payment by 31 May 2028.
- legislation.gov.ukS.I. 2026/995 — CBAM (Emissions and Verification) Regulations 2026, regs 1–2
Made 8 September 2026, in force 1 January 2027; the System Boundaries Document v1.00.
- HM Revenue & CustomsCarbon Border Adjustment Mechanism (CBAM): Policy summary (updated 9 September 2026)
Geographic scope, tax point, liable person, reliefs, the liability formula, functional units and data-year rules.
- HM Revenue & CustomsPrepare for the Carbon Border Adjustment Mechanism (CBAM) — collection
"Registration for CBAM will open on 1 January 2028"; record-keeping below the threshold; rates and defaults to follow.
- HM Revenue & CustomsCBAM: force of law notice and reference document (13 July 2026)
The notice that gives the reference documents legal effect.
- HM Revenue & CustomsUK CBAM: current qualifying carbon pricing schemes (27 August 2026)
The provisional list of schemes that can ground Carbon Price Relief.
- HM TreasuryIntroduction of a UK CBAM from January 2027 — government response to the policy design consultation (30 October 2024)
Records the threshold rising from the £10,000 first proposed.
- legislation.gov.ukS.I. 2026/278 — UK ETS amendment, new Annex paragraph 14
The UK CBAM reduction factors for UK ETS free allocation, 2027 to 2030.
- UK ETS AuthorityUK ETS free allocation review — main Authority response (26 November 2025)
Free allocation for CBAM sectors phases out from 2027, mirroring the EU’s pace.
- Cabinet OfficeUK–EU Summit: Common Understanding (19 May 2025), Chapter IV
The aim of mutual CBAM exemptions through an ETS link — not yet concluded.
Continue reading
Read next
UK ETS
Who is covered, the 31 March and 30 April deadlines, and the free allocation phase-out.
Carbon reporting requirements in the UK
SECR, ESOS, UK SRS and the regimes beside them, by company type.
Manufacturing sector guide
UK ETS installations, CBAM exposure, ESOS and supplier Scope 3.