UK Carbon Border Adjustment Mechanism (CBAM)
Everything UK businesses need to know about the Carbon Border Adjustment Mechanism, import requirements, affected sectors, and compliance deadlines.
What is the UK CBAM?
The UK Carbon Border Adjustment Mechanism is a policy designed to ensure that imported goods face a comparable carbon price to those produced domestically under the UK Emissions Trading System (UK ETS).
This mechanism addresses carbon leakage- where production shifts to countries with less stringent carbon pricing, undermining the UK's climate goals without reducing global emissions.
Importers of specified goods valued at £50,000 or more over a 12-month period will need to register with HMRC and pay charges based on the embedded carbon emissions of their imports.
Key Facts
- Applies to imports from all non-UK countries
- Based on UK ETS carbon price (currently ~£50/tonne)
- Quarterly reporting and payment requirements
- Credits for carbon prices paid abroad
- Administered by HM Revenue & Customs
Sectors Affected by UK CBAM
The UK CBAM initially covers five carbon-intensive sectors most at risk of carbon leakage
UK CBAM Timeline
Key dates and milestones for UK CBAM implementation
January 2027
UK CBAM comes into force
Q1 2027
First quarterly returns due
2027-2030
Gradual phase-out of free UK ETS allowances
2030+
Full CBAM implementation
Compliance Requirements
Businesses importing affected goods must meet these key requirements to comply with UK CBAM regulations.
Download CBAM ChecklistRegister with HMRC as a CBAM declarant
Submit quarterly returns detailing imported goods
Report embedded emissions for each product
Pay CBAM charges based on UK ETS price
Maintain records for at least 6 years
Deduct any carbon price paid in country of origin
Prepare Now for January 2027
While CBAM doesn't take effect until January 2027, businesses should start preparing now by:
- • Auditing current supply chains for affected products
- • Establishing systems to track embedded emissions
- • Engaging with suppliers about their carbon footprint data
- • Understanding the interaction with EU CBAM requirements
Need Help with UK CBAM Compliance?
Our tools and resources can help you understand your CBAM obligations and calculate potential liabilities.