This guide is for importers who need a figure: for a budget now, or for the first return due on 31 May 2028. If you're not sure you need to register at all, use our free CBAM registration checker first. For the rules around the sum (who pays, dates, exemptions), see our complete guide to UK CBAM.
The formula
- Embodied emissions (tCO2e) = net weight (tonnes) × emissions intensity (tCO2e per tonne)
- CBAM charge (£) = embodied emissions × CBAM rate (£ per tCO2e)
- Carbon price relief (£) = embodied emissions subject to an overseas carbon price × effective carbon price (£ per tCO2e)
- CBAM liability (£) = CBAM charge − carbon price relief, and never less than zero
You do this for each consignment, and each different good in a shipment, separately. Here is each input in turn.
Step 1: find the commodity code and sector
Take the 8-digit commodity code from your import declaration and check it is on the CBAM list. The code tells you the sector, which sets the rate, and the row to use in the default values table. Get this right first: neighbouring codes can have very different defaults. Among hot-rolled steel I sections over 220mm tall, for example, the default for parallel-flange beams is less than two-thirds of the default for the other kind.
Step 2: get the net weight
Use the weight without packaging, in kilograms, at the time of import. You report kg on the return and HMRC converts it to tonnes. Round to the nearest kg (half a kg or more rounds up). Import declarations, commercial invoices, carrier weight records, bills of lading and packing lists all count as evidence; keep them for six years.
Step 3: choose the emissions intensity
This is the decision that moves the bill most.
- Verified actual data. The overseas producer works out its direct emissions per tonne for a calendar year, has it checked by an accredited verifier, and sends you the verification report or a good-specific summary. For goods imported in 2027, use the verified figure for 2027, or for 2026 if 2027 isn't available. For cement the figure is worked out per tonne of clinker and for fertiliser per tonne of nitrogen, then converted to a figure per tonne of the product you import using equations in the official notice.
- The default value, from HMRC's table for your commodity code. Defaults include a 10% markup in every sector except fertiliser, so they're meant to be higher than a typical producer's figure.
You must use the default if you don't have verified data. Once you file a return on a default, you can't amend it later to use actual data. Verified 2027 figures can only be produced after the year ends, so ask now: our post on asking an overseas supplier for CBAM emissions data has an email to send.
Step 4: apply the CBAM rate
Use the rate for the sector in the quarter the goods were imported. The rates are set each quarter from the previous quarter's average UK ETS auction price, reduced for the free allowances UK producers in that sector still receive. The figures published so far, on 16 October 2026, are illustrative only and create no liability: £9.69 per tonne of CO2e for iron and steel, for example. The official January to March 2027 rates are due before the end of 2026. Our news post on the illustrative rates and default values lists all five and shows how the government worked out the cement rate.
Step 5: take off any carbon price paid abroad
If the producer paid a carbon price under a qualifying scheme, such as the EU ETS or China's national ETS, you can claim carbon price relief. You need a carbon pricing verification form from the producer, completed by an accredited verifier. From it you work out the effective carbon price: the money actually paid per tonne across all the installation's emissions, so emissions covered by free allowances count at zero, and any compensation or rebate is taken off. Convert it to pounds with HMRC's exchange rate for the quarter before import, then multiply by the embodied emissions it applies to. HMRC's Work out your Carbon Price Relief page has the full steps.
Worked example: imported steel beams
A steel fabricator imports 200 tonnes (200,000 kg) of hot-rolled parallel-flange I beams, over 220mm tall, in February 2027. Commodity code 7216 32 91, iron and steel sector. We use the illustrative rate of £9.69; the real bill will use the official rate for January to March 2027.
| Step | A: default value | B: verified supplier data (made-up figures) |
|---|---|---|
| Net weight | 200 tonnes | 200 tonnes |
| Emissions intensity | 2.695 tCO2e per tonne | 1.85 tCO2e per tonne |
| Embodied emissions | 539 tCO2e | 370 tCO2e |
| CBAM charge at £9.69 | £5,222.91 | £3,585.30 |
| Carbon price relief | None claimed | 370 × £2.00 = £740.00 |
| CBAM liability | £5,222.91 | £2,845.30 |
Column A uses HMRC's published default for this code. Column B is an illustration we made up: a mill with a verified figure of 1.85 tCO2e per tonne, in a country whose carbon price works out at an effective £2.00 per tonne once free allowances are allowed for. Real figures vary widely by mill and production route.
Two things stand out. The 10% markup alone is worth about £475 of the default bill. And in this example, verified data and relief bring the bill down by about £2,378. On one shipment the sums are modest, but they repeat every quarter and rise as the rate rises, which is why the supplier conversation is worth having early.
Budgeting before the rates are final
- Add up your expected tonnage for each commodity code over the year.
- Multiply by the default value to get a ceiling for embodied emissions.
- Multiply by the illustrative rate, and allow for it to rise over time as free allowances are phased out.
- Ask suppliers for verified figures and carbon price details, and redo the sum when you have them.
The embodied emissions figure has a second use: it is a much better measure of the emissions in what you buy than a spend-based estimate. Our post on CBAM data and your Scope 3 explains how to use it in your footprint, and the post on spend-based Scope 3 shows what it replaces.
How Carbon Recycling helps
Carbon Recycling doesn't file CBAM returns, and it isn't a CBAM verifier, customs agent or tax adviser. It helps with the data. On the Growth plan, supplier data requests let you ask suppliers for their emissions per tonne through a secure link, review the figure and method they send, and use it in your Scope 3. That is the same per-tonne figure this calculation needs. The CBAM pack, coming soon, will work out the embedded emissions and the CBAM charge on your imports. Groups importing through several companies, or with their own sites abroad, can report across them on the Enterprise plan.