What is the UK CBAM?
A tax on the carbon emitted in making steel, aluminium, cement, fertiliser and hydrogen brought into the UK, from 1 January 2027. Here’s who it hits, how it’s worked out, and when everything is due.
From HMRC’s CBAM policy summary (updated 2 November 2026), its default values and rates guidance, checked 8 November 2026.
A carbon price at the border
UK manufacturers of steel, aluminium, cement, fertiliser and hydrogen pay for their emissions under the UK Emissions Trading Scheme. The Carbon Border Adjustment Mechanism puts a comparable price on the same goods when they’re imported, so that cutting emissions in the UK doesn’t just move production abroad. It applies to CBAM goods imported on or after 1 January 2027, across the whole UK, Northern Ireland included.
Which goods
Five sectors, and only specific goods within them, each identified by its commodity code. HMRC has published a default emissions value for 570 codes:
- Iron and steel478 codes
- Aluminium58 codes
- Cement6 codes
- Fertiliser27 codes
- Hydrogen1 codes
Some codes in these chapters are left out, such as certain scrap. Check yours in the default values table: if it isn’t there, it very likely isn’t a CBAM good.
How the charge is worked out
Each good’s embodied emissions, in tonnes of CO₂e, are its emissions intensity times its weight. The intensity comes from verified data from the producer, which HMRC prefers, or from HMRC’s default value for its code. The emissions are multiplied by the CBAM rate for the sector and the quarter the goods were imported. If a carbon price was already paid abroad, Carbon Price Relief takes it off.
The rates follow the UK Emissions Trading Scheme price, less the share of free allowances UK producers still get, and the government publishes them at the start of each quarter from 1 January 2027. Its illustrative rates, from July to September 2026 data, run from £1.45 per tonne of CO₂e for fertiliser to £9.79 for aluminium. On 18 tonnes of reinforcing bar, that is about £530.
Who has to do something, and when
Anyone whose CBAM imports meet or exceed £50,000 on HMRC’s tests must register, keep records, send returns and pay. The registration check runs both tests on your figures.
- 1 January 2027CBAM applies to imports from this day. The first quarter’s rates are published before it.
- 1 January 2028Registration with HMRC opens.
- 31 January 2028Register by now if you became liable during 2027.
- 31 May 2028First return and payment, for January to December 2027.
Questions
What does CBAM stand for?
Carbon Border Adjustment Mechanism: a charge on the carbon emitted in making certain goods brought into the UK.
Why has the UK brought in CBAM?
So that carbon-intensive imports face a carbon price comparable to the one UK manufacturers pay under the UK Emissions Trading Scheme, and cutting emissions here doesn’t simply move them abroad.
Who pays the UK CBAM?
The person liable for the import, once their CBAM goods reach £50,000 on HMRC’s threshold tests. They register with HMRC, keep records, send a return and pay. A tax agent can send the returns, but the liability stays with the importer.
Does CBAM apply in Northern Ireland?
Yes. HMRC’s policy summary says it applies across the whole UK, including Northern Ireland.