UK CBAM guide for importers: registration, reporting and supplier data

What the UK CBAM is

The carbon border adjustment mechanism (CBAM) is a new tax. It is designed so that highly traded, carbon intensive goods imported into the UK face a carbon price comparable to the one paid by manufacturers producing the same goods in the UK^[1]. In the UK, those manufacturers can be subject to carbon pricing under the UK Emissions Trading Scheme (UK ETS)^[1].

The policy aim is to reduce carbon leakage: the movement of production and its emissions from one country to another because of different levels of carbon pricing and climate regulation^[2]. In practice, CBAM puts a charge on the emissions embodied in imported goods, so that buying from a high-emission producer overseas does not carry a hidden cost advantage over buying from a UK producer.

CBAM applies to direct emissions embodied in imported CBAM goods, including emissions embodied in relevant precursor goods further up the value chain^[2]. The inclusion of indirect emissions has been delayed until 2029 at the earliest^[2].

When the UK CBAM starts: 1 January 2027

The UK CBAM applies from 1 January 2027^{[2, 1]}. The government announced at Budget 2025 that it would legislate in Finance Bill 2025-26, and HMRC will publish detailed guidance ahead of 2027^[2]. Because secondary legislation and guidance are still being finalised, importers should check the latest HMRC material before relying on any operational detail.

Which goods are covered

CBAM applies to specific imports from five sectors^{[2, 1]}:

• aluminium
• cement
• fertiliser
• hydrogen
• iron and steel

Within those sectors, only specified "CBAM goods" are covered, identified by commodity code^[2]. The glass and ceramic sectors will not be in scope from 2027, as had originally been proposed^[2]. The scope will be kept under review beyond 2027^[2].

The first practical step is to check your commodity codes. Many businesses import CBAM goods without thinking of themselves as steel or aluminium buyers: fixings, brackets, tubes, castings and fabricated parts can all fall within the scope. A review of your import declarations against the commodity code list is the quickest way to know where you stand.

Businesses affected indirectly

Businesses that import £50,000 or more of CBAM goods over a 12 month period are directly affected, while businesses that use these goods in their supply chain are indirectly affected^[1]. If you buy steel, aluminium or cement products from a UK distributor or fabricator that imports them, you will not register or file returns yourself, but the cost of CBAM may be passed on in your prices.

For buyers in that position, the questions are commercial: whether your suppliers import covered goods, how they plan to recover the cost, and whether contracts allow them to add a CBAM surcharge. These are worth raising at the next contract renewal rather than after the first invoice arrives.

The £50,000 registration threshold

The liable person is generally the person responsible for completing the customs declaration, or on whose behalf that declaration is made^[2]. The liable person must register with HMRC once the value of CBAM goods imported passes the £50,000 minimum registration threshold over the relevant period^{[2, 1]}. There are two tests^[2]:

• The backward test: the value of CBAM goods imported over the preceding 12 months.
• The forward test: the value of CBAM goods you expect to import over the coming 30 days.

Ordinarily, a liable person will have 30 days to register from the day they become liable, although businesses will have longer to register in the first year of CBAM^[2]. The forward test matters for businesses with lumpy import patterns: a single large order can bring you into scope even if your previous year was well below the threshold.

Returns, payment and deadlines

CBAM operates as a tax, so liable persons account for all CBAM goods that pass a tax point during an accounting period, then submit an online return and pay the liability after the period ends^[2].

• The first accounting period is annual, from 1 January 2027 to 31 December 2027, with payment due at the end of May 2028^[2].
• After that, accounting periods are quarterly, with payment generally due two months after the end of each period^[2].

The CBAM rate is set per tonne of embodied emissions and is designed to be comparable to the carbon price paid by UK producers, reflecting the UK ETS and free allowances^[2]. Liability can be reduced where the embodied emissions were subject to a deductible carbon price overseas and the importer provides evidence^[2]. HMRC will set out the detailed return content and process in its guidance; until then, we would not plan around assumed filing dates beyond those above.

The supplier emissions data you will need

To work out the embodied emissions in each import, the liable person can choose between independently verified actual emissions data and default emissions values^[2]. From 2027 there will be a single default value per product, published by the government in advance^[2].

Default values are simpler, but they may not reflect the goods you actually buy. If your suppliers produce with lower emissions than the default, actual data could lower your liability. To use it, you need suppliers who can provide it. In practice that means asking each relevant supplier for:

• the installation where the goods were produced
• direct emissions attributable to the goods, including relevant precursors
• who has verified the data, once verification requirements are published
• any carbon price paid on those emissions where they were produced, with evidence

Overseas producers are affected where they choose to supply information about embodied emissions or carbon prices paid^[1]. Some will be ready; many will not. Start the conversation early, build the request into new contracts and supplier onboarding, and treat data quality as part of how you compare suppliers on landed cost.

UK CBAM and EU CBAM

The UK CBAM is a separate scheme from the EU's. UK importers deal with HMRC under the UK rules; UK businesses that export covered goods to the EU may be asked by their EU customers for emissions data under the EU scheme. The two can overlap for a business that both imports and exports covered goods.

At the UK-EU Summit on 19 May 2025, the UK and EU agreed to work towards linking their emissions trading schemes, which would create conditions for goods originating in each jurisdiction to benefit from mutual exemptions from the respective CBAMs, subject to compliance with the relevant legislation^[2]. Until any link is agreed, plan on the basis that both schemes apply in their own territory.

A practical checklist for importers

• List the commodity codes you import and flag any CBAM goods.
• Total their value over the last 12 months and forecast the next 30 days.
• Confirm who acts as the liable person on each import route.
• Ask key suppliers what emissions data they can provide, and when.
• Watch for HMRC guidance and default values ahead of 2027.

Frequently asked questions

We help importers collect the supplier emissions data CBAM needs, as part of our sustainable supply chains work.