UK CBAM: the complete guide for importers (2027)

The UK Carbon Border Adjustment Mechanism (UK CBAM) starts on 1 January 2027. If you import steel, aluminium, cement, fertiliser or hydrogen products into the UK and cross a £50,000 rolling 12-month threshold, you'll need to register with HMRC, work out the emissions embodied in what you import, and pay a carbon charge on it. This guide walks through what that actually means — in plain English — and what a small business should do this year to be ready.

What UK CBAM actually is

UK CBAM is a border tax on the carbon embedded in imported goods. The point is to level the playing field: UK producers already pay for their emissions through the UK Emissions Trading Scheme, so an equivalent charge on imports stops businesses simply buying the same product from a jurisdiction with no carbon price. It applies to direct imports into the UK — not to what you make, sell, or export.

Who has to register

The threshold is £50,000 of imports over a rolling 12 months, measured across all in-scope goods combined. If you cross it, you must register with HMRC via the Government Gateway. The £50,000 is a value threshold, not a quantity — so commodity price swings can quietly push you over.

The six sectors in scope

• Iron & steel — semi-finished and finished steel products
• Aluminium — primary aluminium and most semi-finished products
• Cement — Portland cement, clinker and related products
• Fertilisers — nitrogen-based fertilisers
• Hydrogen — pure hydrogen and related gases
• Ceramics and glass — added to the UK regime during the consultation

Electricity, which is in scope for the EU regime, is not in the UK regime at launch.

The timeline

How the charge is calculated

The charge is tonnes of embedded CO₂e × the UK CBAM rate. The UK CBAM rate is set to track the UK ETS carbon price, minus any free allowances the equivalent UK producer would receive. In practice you have two ways to establish the embedded emissions figure:

1. Actual emissions data from your suppliers, calculated to the UK CBAM methodology and — where required — verified independently. This is usually cheaper if suppliers are reasonably clean, because it uses their real (lower) numbers.
2. Default values published by HMRC. Higher, but you can use them where actual data isn't available. Sensible fallback; unsustainable primary strategy for a large importer.

What to do in 2026, before it starts

1. Pull your last 12 months of import invoices for in-scope goods and check if you're over £50,000.
2. Name someone internally as the CBAM owner. It usually falls between finance, procurement, and sustainability — pick one.
3. Start the supplier conversation early. Ask each in-scope supplier whether they can produce installation-level CO₂ data, and by when. Their answer determines your strategy.
4. Decide whether you'll use actual data or default values for the first return, and document why.
5. Register with HMRC in the first quarter of 2027 if you're over the threshold — don't leave it until May 2028.

The single most useful thing you can do

Send a one-page data request to every in-scope supplier now. Ask for tonnes CO₂e per tonne of product, at the installation level, with the calculation methodology and any verification statement they have. About a third will reply with something usable, a third will say they're working on it, and a third won't reply — that ratio itself is the information you need.