UK CBAM: the complete guide for importers (2027)

What the UK CBAM is

UK producers of steel, aluminium, cement, fertiliser and hydrogen pay a carbon price through the UK Emissions Trading Scheme. CBAM puts a comparable price on the same goods when they are imported, so that cutting emissions in the UK doesn't simply move production, and the emissions, overseas. It was set up by the Finance Act 2026 and starts on 1 January 2027, across the whole UK including Northern Ireland.

It is a tax, run by HMRC, charged on the importer. It is not a carbon reporting scheme for the importer's own emissions, and it is separate from the EU's CBAM, which already charges EU importers. Our post on EU CBAM and UK CBAM explains the differences, which matter if you also export to the EU.

Which goods are covered

CBAM applies to specific commodity codes, listed in the annex to the government's policy summary. Check the 8-digit code on your import declarations.

Excluded within those sectors: ferrous waste and scrap (7204), aluminium scrap (not on the list), most ferro-alloys, and fertilisers containing only phosphorus and potassium. Goods further down the chain, such as machinery or cars that contain steel, are not covered.

Some imports don't count even if the code is on the list:

• goods of UK origin coming back into the UK, under the non-preferential rules of origin
• goods imported by individuals for private, non-business use
• goods under returned goods relief
• goods under temporary admission with full relief from duty, or held in a special procedure such as customs warehousing or inward processing, until they are released into free circulation

Who is the importer

The person liable is the importer: the person in whose name the customs declaration is made, or, where it is made on someone else's behalf, the person it is made for. Where no declaration is needed, it's the person the goods are imported for. That means:

• If a customs broker, freight forwarder, haulier or courier makes the declaration for you, you are the importer.
• If you buy from a UK merchant or stockholder that imports in its own name, the merchant is the importer, not you.
• An importer based outside the UK can be liable too.
• A tax agent can submit returns for you, but can't register for you and takes on no liability.

The £50,000 threshold and registration

You must register if the customs value of your CBAM goods reaches £50,000 on either of two tests, applied from 1 January 2027:

• Forward test: on any day, you expect £50,000 or more of CBAM goods to arrive over the next 30 days. You're liable from that day.
• Backward test: on the 1st of each month, you look back 12 months. If you imported £50,000 or more, you're liable from that 1st. During 2027, only count imports from 1 January 2027.

The threshold covers all five sectors together. Registration opens on 1 January 2028 through a Government Gateway account. Anyone liable during 2027 must register by 31 January 2028; after that, you normally have 30 days from the day you become liable. Our free CBAM registration checker applies both tests and gives you your dates.

How the charge is worked out

In outline, for each consignment:

1. Embodied emissions = net weight in tonnes × emissions intensity (tonnes of CO2e per tonne of product).
2. CBAM charge = embodied emissions × the CBAM rate for that sector in the quarter of import.
3. CBAM liability = the charge, less any carbon price relief for a carbon price already paid abroad.

Only direct emissions within set system boundaries count, plus the emissions in any CBAM "precursor" goods used to make the product (the steel in a steel tube, for example). Our step-by-step guide to working out a CBAM bill takes you through each step with a worked example.

The emissions intensity: actual data or the default

You have two choices for each good:

• Verified actual data from the producer, checked by an accredited verifier. The producer gives you a verification report or a good-specific summary. For goods imported in 2027, use verified data for calendar year 2027, or 2026 if 2027 isn't available. From 2028, use the most recent verified figure from the two years before import, or the figure for the year the goods were made.
• The government default value for the commodity code, published on 16 October 2026 and fixed for 2027 and 2028. Defaults include a 10% markup in every sector except fertiliser, so they are deliberately on the high side.

Two rules catch people out. You must use the default if you don't have verified data. And a return filed on default values can't later be amended to use actual data. Since verified 2027 figures won't exist until 2028, start asking suppliers now: our post on asking an overseas supplier for CBAM emissions data has an email template.

The CBAM rate

There is one rate per sector, set each quarter. It starts from the average UK ETS auction price in the previous quarter and is reduced to reflect the free allowances UK producers in that sector still get. As free allowances are phased out, rates are expected to rise. HMRC will publish the rates at the start of each quarter from 1 January 2027; the first official rates, for January to March 2027, are due before the end of 2026. Our news post on the illustrative rates and default values has the figures published on 16 October 2026 and a cement example.

Carbon price relief

If the emissions in your goods have already been charged under an overseas carbon price, you can reduce your bill by the effective carbon price paid, converted to pounds with HMRC's exchange rate for the quarter before import. You need a carbon pricing verification form from the producer, completed by an accredited verifier. Emissions covered by free allowances get no relief, and the relief can't be more than the CBAM due. The government's provisional list of qualifying schemes includes the EU ETS, China's national ETS, India's CCTS, Korea's K-ETS, the Swiss and New Zealand schemes and carbon taxes in Singapore, South Africa and Chile, among others.

Is anywhere exempt?

Not yet. The law lets the UK exempt goods from countries whose emissions trading scheme is linked to the UK's, but the government says there are currently no exempt jurisdictions. The UK and EU agreed in 2025 to work towards linking their schemes, and press reports in October 2026 suggest a deal could be announced at a UK-EU summit in November 2026. Nothing has been signed, and any exemption would only apply once a linking agreement is in force. Plan on EU goods being charged until the government says otherwise.

Returns, payment and the calendar

The first accounting period is the whole of 2027, with the return and payment due by 31 May 2028. From 2028 returns are quarterly:

Each return lists every consignment separately: the 8-digit commodity code, net weight in kg, emissions intensity (or default), any carbon price paid abroad, country of origin and, for the first year, the quarter each good arrived. Once registered you file every period, including a nil return when there is nothing to pay. You can pay by Direct Debit, bank transfer, card or cheque.

Records to keep

Keep records for 6 years from the later of the date they were made and the end of the accounting period they relate to. HMRC can charge a fixed £500 penalty for not keeping them. You need, for every CBAM good imported from 1 January 2027:

• the commodity code and description, the date it arrived or cleared customs, its value and its net weight in kg
• evidence for any exemption, such as proof of UK origin
• the producer's verification report or summary, if you use actual data
• the carbon pricing verification form and your workings, if you claim carbon price relief
• how you estimated the weight you expect to import, which registration asks for

Import declarations, commercial invoices, bills of lading and packing lists can all serve as records.

What to do now

1. Find out whether you're the importer, and run your figures through the registration checker.
2. List your CBAM goods by commodity code and look up the default value for each.
3. Ask each overseas producer whether they will have verified emissions per tonne for 2027, and whether they pay a carbon price at home.
4. Budget with the calculation guide, using the defaults as a ceiling.
5. Set up record keeping from 1 January 2027 and decide who will file: you or a tax agent.

If you don't import but sell these materials to someone who does, read UK CBAM: what your customers will ask you. If you buy them from a UK merchant, CBAM won't land on you directly, but the supplier data you collect for it is good Scope 3 data: see our guide to the Scope 3 categories.

How Carbon Recycling helps

Carbon Recycling is carbon reporting software, not a customs agent, tax adviser or CBAM verifier, and it doesn't file CBAM returns. Where it helps is with the supplier data that CBAM depends on. On the Growth plan, supplier data requests let you ask suppliers for their emissions per tonne through a secure link and review what they send. That figure feeds your Scope 3 now, and is the figure you'll want for CBAM: our post on CBAM data and Scope 3 explains how one number serves both. The CBAM pack, coming soon, will work out the embedded emissions and the CBAM charge on your imports.

Groups that import through more than one company, or have their own sites overseas, can use the Enterprise plan, which covers several companies, a group report and sites outside the UK. Start with the free CBAM registration checker.