On April 1st there will be just nine months before the United Kingdom introduces its Carbon Border Adjustment Mechanism. It will directly impact importers of many steel and aluminium goods and the costs and purchase decisions of manufacturers sourcing inputs within the UK.
Primary legislation introduced as part of the Finance Bill confirmed UK CBAM would be commence on 1st January 2027. This clearly defined the Government’s policy and the scope of UK CBAM. Subsequent secondary legislation is detailing exactly how it will be implemented.
The principles of UK CBAM are set out in a Treasury Factsheet here: https://www.gov.uk/government/publications/factsheet-carbon-border-adjustment-mechanism-cbam/factsheet-carbon-border-adjustment-mechanism
The scope of UK CBAM by commodity coding headings are defined in Annex B of the HMRC response to the policy design consultation.
It is crucially important UK manufacturers and importers recognise that there will be no transitional phase for UK CBAM – it will come into full force with liability for UK CBAM tax costs on 1st January 2027.
The only concession importers will have is a first accounting period of one year, to 31 December 2027, with payments due at the end of May 2028. Thereafter, accounting periods will be quarterly with payments generally due two months after the end of each accounting period.
UK CBAM differs from the EU version in several ways, including that it will be paid as a tax rather than by purchasing CBAM certificates. The UK is also aiming to make the administration of its CBAM more straightforward for businesses. Nevertheless, importers will need to obtain and report verified emissions data from their supply chain, unless they are prepared to use punitive default values, which will substantially increase the CBAM cost.
Whether you import steel or aluminium goods directly or purchase imported goods from stockholders, UK CBAM will increase the costs of those goods and, almost certainly, the cost of the domestically produced equivalents. The source of your products, their carbon footprint and whether the CBAM tax is based on actual emissions data or default values, will determine the level of additional costs. If you are an importer, UK CBAM will also require significant administrative requirements for customs declaration and CBAM reporting, which will mean additional costs.
With just nine months to go, now is the time to identify whether your imported goods are in scope of UK CBAM. Us this link to check the list of commodity headings/codes and products in scope. http://thecbm.co.uk/wp-content/uploads/2026/03/UK-CBAM-scope-by-commodity-heading.pdf.
As it has done for EU CBAM, CBM will provide information to its members to support compliance with UK CBAM. The first step will be a dedicated webinar on 7th May at 10am , led by widely recognised CBAM expert Jamie McLeod of Crowe UK.
To register your interest, please contact Melinda Jean via email at Melinda.jean@thecbm.co.uk.