UK CBAM vs EU CBAM
Two carbon border taxes on nearly the same goods, built differently. Here they are side by side, with what changes if the UK and EU link their carbon markets, and what a UK exporter to the EU has to do.
From HMRC’s policy summary and factsheet, and EU Regulation 2023/956 as amended by 2025/2083, checked 8 November 2026.
| Topic | UK CBAM | EU CBAM |
|---|---|---|
| Starts | Goods imported from 1 January 2027 | The definitive period from 1 January 2026, after a reporting-only transition from 2023 to 2025 |
| Goods | Aluminium, cement, fertiliser, hydrogen, iron and steel, by commodity code. Direct emissions, including precursors | The same five, plus electricity. Indirect emissions also count for cement and fertiliser |
| Threshold | £50,000 of CBAM goods, on a 30-day forward test or a 12-month backward test | 50 tonnes net mass per importer a year (not for electricity or hydrogen) |
| Who | The person responsible for the customs declaration | Only an authorised CBAM declarant may import; a business outside the EU uses an indirect customs representative |
| How you pay | A tax return and payment to HMRC, at a sector rate set each quarter from the UK ETS price | Buying and surrendering CBAM certificates, priced from EU ETS auctions; sales start 1 February 2027 |
| First return | For January to December 2027, with payment by 31 May 2028; quarterly from 2028 | An annual declaration by 30 September, the first in 2027 for 2026 imports |
| Registration | Opens 1 January 2028; register by 31 January 2028 if liable during 2027 | Authorised declarant status before importing above the threshold |
| Default values | One value per commodity code, the same for every country, published 16 October 2026 | Built from the highest-emitting exporting countries where data is missing, with a mark-up |
| Carbon price paid abroad | Carbon Price Relief, claimed on the return, with an independent verifier’s form | A reduction in certificates where a carbon price was effectively paid, with certified records |
Will UK–EU trade be exempt?
Not yet. At the May 2025 summit, both sides said linking the UK and EU emissions trading schemes should create the conditions for exempting each other’s goods from their CBAMs, and the EU Council authorised negotiations on 13 November 2025. HMRC’s policy summary, updated 2 November 2026, says there are currently no CBAM-exempt countries.
Press reports in early November 2026 say a deal could be announced at the UK–EU summit on 20 November 2026. Even then, an exemption would need changes to each side’s law before it applied, so plan for both regimes as written.
If you export to the EU
Your EU customer is the authorised declarant and surrenders the certificates; you aren’t liable. But expect requests for your installation’s emissions data. If your customer uses actual data it has to be verified by an accredited verifier; if you can’t provide it, they use the EU’s default values. UK carbon costs you paid reduce their certificates only if they can document them.
Questions
Is the UK CBAM the same as the EU CBAM?
No. They cover nearly the same goods but work differently: the UK charges a tax through a return to HMRC from 1 January 2027 with a £50,000 threshold, while the EU requires importers to buy CBAM certificates, has applied since 1 January 2026 and uses a 50-tonne threshold.
Will goods traded between the UK and the EU be exempt from CBAM?
Not yet. At the May 2025 summit both sides said linking their emissions trading schemes should create the conditions for exempting each other’s goods, and the EU Council authorised negotiations on 13 November 2025. HMRC’s policy summary, updated 2 November 2026, says there are currently no CBAM-exempt countries. Press reports in November 2026 say a deal could be announced at the summit on 20 November 2026; any exemption would still need each side’s laws to change.
I export steel from the UK to the EU. What do I have to do?
Your EU customer is the CBAM declarant and buys the certificates, not you. Expect them to ask for your installation’s emissions data: if they use actual data it must be verified by an accredited verifier, and if you can’t supply it they fall back on the EU’s default values. UK ETS costs you paid can reduce their certificates only if they can document them.