UK CBAM: Rules, Rates and Dates for Importers

The UK has its own carbon border tax. It starts on 1 January 2027, a year after the EU's.

It looks like the EU scheme from a distance. Up close it works differently. It is a tax paid to HMRC, not a certificate you buy. It counts value, not tonnes. And your first payment falls in 2028.

This page covers what the UK rules say today, where they differ from the EU's, and what to do if you import into the UK or sell into it from the EU.

At a glance:

• UK CBAM applies to goods imported on or after 1 January 2027.
• It covers five sectors: aluminium, cement, fertilisers, hydrogen, and iron and steel.
• You register if you import £50,000 or more of covered goods in a 12-month period.
• It is a tax, run by HMRC. There are no certificates to buy.
• Registration opens on 1 January 2028. The first return and payment are due by 31 May 2028.

What is UK CBAM?

UK CBAM is a tax on the carbon emitted to make certain imported goods. It aims to give imports a carbon cost comparable to what UK producers pay under the UK Emissions Trading Scheme.

The Finance Act 2026 sets it up. Schedule 17 covers administration, including who must register. HMRC has also made regulations on records, returns and registration.

The person who imports the goods for commercial purposes is liable. That person registers with HMRC, keeps records, files returns and pays. The government has confirmed that individuals importing for personal use are not liable.

Which goods are covered?

Five sectors are in scope, according to HMRC's policy summary:

• aluminium
• cement
• fertilisers
• hydrogen
• iron and steel

Electricity is not on the list. The EU scheme includes it. The UK one does not.

Goods are defined by commodity code, so the code decides. Some codes are excluded, such as certain scrap products. Check each of your codes against HMRC's list, not against the EU's.

If you are unsure how a code is built, see What is an HS code.

Do you need to register? The £50,000 test

You must register with HMRC if you meet the £50,000 threshold. Schedule 17 sets two tests.

• Looking back. On the first day of each month, add up the covered goods you imported in the previous 12 months. If the total is £50,000 or more, you must register.
• Looking forward. On any day, check whether you expect to import £50,000 or more of covered goods within the next 30 days. If you do, you must register from that day.

Value means the customs value, the same figure used to work out customs duty. In the first year you only look back to 1 January 2027.

HMRC gives an example. On 1 January 2027 you know you will import £60,000 of covered goods on 14 January. The forward test is met on 1 January 2027, so that is the day your liability to register begins.

The threshold removes a lot of importers. HMRC's own estimate is that it excludes over 80% of otherwise affected importers.

Some goods do not count towards the threshold, such as goods that qualify for returned goods relief. HMRC lists the cases in its guidance.

When must you register?

Liability starts on 1 January 2027. Registration opens later, on 1 January 2028.

For the first year, businesses have until 31 January 2028 to register. That is HMRC's position.

So you may owe tax long before you can register. Keep your records from the first day. If you need to register and do not, or you register late, HMRC may charge a penalty.

How is the tax worked out?

You pay on the emissions embedded in the goods, at a rate per tonne.

The rate. There is one rate per sector. It reflects the UK ETS carbon price, adjusted for free allowances. The government publishes the rates at the start of each quarter from 1 January 2027. The rate that applies is the one in force when the goods are imported.

The emissions. The charge is based on direct emissions. HMRC's summary does not bring indirect emissions into it. The EU scheme counts some indirect emissions, so the two can give different totals for the same goods.

Default values. If you have no actual data, you use a default value. From 1 January 2027 there is one default value per good. HM Treasury may change them.

Carbon Price Relief. If a qualifying carbon price was already paid on the goods' emissions, you can reduce your bill. You calculate the relief from verified data. Total relief cannot exceed the tax due. Check whether the carbon price your supplier pays qualifies under HMRC's rules.

Return and payment dates

The first accounting period is long. It runs for 12 months, from 1 January to 31 December 2027. From 2028, periods are quarterly.

Payment is due with the return. HMRC accepts Direct Debit, bank transfer, and card payments, among other methods.

Penalties apply for failing to register, file, or pay on time, and for errors in returns. HMRC can also assess you and register you itself. Fraud and deliberate misstatement are criminal offences.

UK CBAM and EU CBAM compared

The two schemes share a goal. They differ in how they work.

A threshold in pounds and a threshold in tonnes are not the same test. A business can pass one and miss the other. If you import into both markets, run both.

For the EU rules, see What is CBAM.

What it means for EU exporters

The tax falls on the importer in the UK. If your UK customer is the importer, the liability is theirs. They will ask you for emissions data, and the default value will cost them more than real figures.

If you sell on delivered duty paid terms and act as the importer, the liability may be yours. Work out who the importer is before 2027, using HMRC's guidance on who counts as the importer.

Overseas producers are also affected when they choose to supply data on embedded emissions or on carbon prices already paid. HMRC says so directly.

At the UK-EU summit on 19 May 2025, both sides said they would work towards linking their emissions trading systems. That could lead to mutual exemptions from CBAM. As far as we could confirm on 10 November 2026, no linking agreement or exemption is in force. Do not plan around one.

What to do before 1 January 2027

1. List your covered goods. Match each product to HMRC's commodity codes.
2. Track value from day one. Run the 30-day forward test and the monthly look-back from 1 January 2027.
3. Settle who is the importer. Check this in every contract.
4. Ask suppliers for emissions data. Request it per shipment, and ask whether a carbon price was paid.
5. Diary the dates. Registration opens 1 January 2028, and the first return is due 31 May 2028.

Where Bindu fits. Bindu's CBAM work today is built around the EU regime, with its 50-tonne floor and annual declaration. Both regimes need the same groundwork: the right code for every product, quantities per import, and emissions evidence from the supplier. Bindu does that groundwork per shipment for the EU. See the CBAM breakdown.

FAQ

When does UK CBAM start? UK CBAM applies to covered goods imported on or after 1 January 2027. Registration opens on 1 January 2028, and the first return and payment are due by 31 May 2028.

Source: GOV.UK: CBAM policy summary

Which goods does UK CBAM cover? Aluminium, cement, fertilisers, hydrogen, and iron and steel, as set out by commodity code. Electricity is not included. Some codes, such as certain scrap products, are excluded.

Source: GOV.UK: CBAM policy summary

What is the UK CBAM registration threshold? £50,000 of covered goods. You must register if you imported that much in the previous 12 months, tested on the first day of each month, or if you expect to import that much within the next 30 days.

Source: Finance Act 2026, Schedule 17

Is UK CBAM a tax or a certificate scheme? It is a tax. You register with HMRC, file returns and pay HMRC directly. You do not buy or surrender certificates, which is how the EU scheme works.

Source: GOV.UK: Carbon Border Adjustment Mechanism

Who pays UK CBAM, the exporter or the importer? The person responsible for importing the goods into the UK for commercial purposes. In most sales that is the UK importer. If an overseas seller acts as importer, the liability may sit with them.

Source: GOV.UK: Carbon Border Adjustment Mechanism

Can I reduce my UK CBAM bill if a carbon price was already paid? Yes. Carbon Price Relief reduces the liability where a qualifying carbon price was already paid on the goods' emissions. You calculate it from verified data, and it cannot exceed the tax due.

Source: GOV.UK: CBAM policy summary

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This article reflects the official position as of 10 November 2026. This is general information, not legal advice.