UK CBAM from 1 January 2027: Who Pays, Which Goods and How It Differs from the EU
In brief
- The UK Carbon Border Adjustment Mechanism (UK CBAM) starts on 1 January 2027. It puts a carbon price on certain imported goods, in line with the price UK producers pay under the UK ETS.
- It covers aluminium, cement, fertiliser, hydrogen, and iron and steel. Glass and ceramics, proposed earlier, are not included from 2027.
- Only importers bringing in £50,000 or more of CBAM goods over a 12-month period must register, file returns and pay. The government estimates this removes over 80% of affected importers.
- The first accounting period is the 2027 calendar year, with the first return and payment due by 31 May 2028. HMRC runs the scheme.
The UK CBAM is often described as a copy of the EU one. It is not. It is a tax collected by HMRC, it uses a value threshold instead of a weight threshold, and it does not need certificates. This guide explains who pays, how the charge works, and how it differs from the EU CBAM.
Who has to pay?
The person liable is generally the importer of the goods into the UK. If the value of CBAM goods you import reaches £50,000 over a 12-month period, you must register with HMRC, file returns and pay. Below that, you have no UK CBAM obligations. The threshold was raised from the £10,000 first proposed.
How the charge works
The charge is based on the embedded emissions of the goods multiplied by a CBAM rate. The rate reflects the UK carbon price, adjusted for the free allowances UK producers still receive, and you can claim relief for an effective carbon price already paid in the country of production. You can use the actual emissions of the goods, from the producer, or default values. As with the EU scheme, actual data from the producer usually gives a lower charge. Indirect emissions, from the electricity used to make the goods, are not included from 2027.
| Feature | UK CBAM | EU CBAM |
|---|---|---|
| Start of payment | 1 January 2027 | Goods imported from 1 January 2026 |
| Run by | HMRC, as a tax | National authorities and the Commission |
| Small-importer threshold | £50,000 value of CBAM goods over 12 months | 50 tonnes a year (excluding electricity and hydrogen) |
| Certificates | None; you pay the tax | Yes, bought on a central platform from February 2027 |
| Sectors | Aluminium, cement, fertiliser, hydrogen, iron and steel | Iron and steel, aluminium, cement, fertilisers, hydrogen, electricity |
| First return | By 31 May 2028 for 2027 | By 30 September 2027 for 2026 |
Legislation and timeline
The powers to create the tax were included in the Finance Act 2026. Detailed regulations followed in 2026: the first set, covering the administrative framework, rate calculation and carbon price relief, was laid on 13 July 2026, and the regulations on emissions and verification on 9 September 2026. From 2028, returns move to quarterly periods.
What to do before 2027
| Step | What to do |
|---|---|
| 1. Check your codes | List imports by commodity code and match them to the UK CBAM goods |
| 2. Check the threshold | Add up the value of CBAM goods imported over the last 12 months |
| 3. Ask suppliers for data | Request actual embedded emissions per tonne from each producer |
| 4. Check overseas carbon prices | Find out whether producers pay a carbon price you can claim relief for |
| 5. Budget | Estimate the 2027 charge with default and actual values |
If you are a producer exporting to the UK or the EU, the most useful thing you can do now is calculate and document the emissions of your installation. Our GHG accounting service does this work.
Frequently asked questions
When does the UK CBAM start?
On 1 January 2027. The first return and payment, for 2027, are due by 31 May 2028.
What is the UK CBAM threshold?
Importers must register and pay only if they import £50,000 or more of CBAM goods over a 12-month period.
Which sectors does the UK CBAM cover?
Aluminium, cement, fertiliser, hydrogen, and iron and steel. Glass and ceramics are not in scope from 2027.
Do I need certificates for the UK CBAM?
No. Unlike the EU scheme, the UK CBAM is a tax paid to HMRC through returns.
Does the UK CBAM include indirect emissions?
No, not from 2027. Indirect emissions are expected to be considered no earlier than 2029.
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