UK CBAM from 1 January 2027: what importers must do
The UK Carbon Border Adjustment Mechanism (Schedule 17, Finance Act 2026) puts a charge on the direct emissions embodied in imported aluminium, cement, fertiliser, hydrogen and iron and steel from 1 January 2027. It is a tax, not a certificate scheme, and the importer named on the customs declaration pays it.
Do you have to register? The £50,000 test
- Backward test: on the first day of each month, CBAM goods imported in the preceding 12 months worth £50,000 or more (customs value). Imports before 1 January 2027 never count.
- Forward test: from 1 January 2027, you expect to import £50,000 or more within 30 days.
- Deadline: notify HMRC within 30 days of triggering registration; anyone who triggers it in 2027 has until 31 January 2028. Registration opens on 1 January 2028.
- Not counted: goods of UK origin, returned goods, goods under a special procedure that are exported again, temporary admission with full relief, private-use imports. Outward processing counts only the increase in value.
The free check tells you from which day you are liable and by when to register.
How the charge works
Charge = embodied direct emissions × UK CBAM rate − carbon price relief. The rate is set per sector at the start of each quarter from the average UK ETS auction price, adjusted for UK free allocation, and the rate of the quarter of import applies. Embodied emissions come from the producer's verified actual data, or the official UK default value.
HM Treasury's illustrative rates (published 2026-10-16; Illustrative only: UK ETS average auction price July–September 2026 (£58.15/tCO2e) and the 2027 free-allocation reduction factor (97.5 %); the rates for January–March 2027 are due before the end of 2026.) — not the rates you will pay:
| Sector | £ per tCO₂e (illustrative) |
|---|---|
| Iron & steel | £9.69 |
| Aluminium | £9.79 |
| Cement | £8.78 |
| Fertilisers | £1.45 |
| Hydrogen | £9.24 |
Default values
One UK default value per CN code for every origin, in force 2027–2028, with the 10 % mark-up already included (none for fertiliser). All UK default values — e.g. CN 7208 · CN 7318 · CN 7601 · CN 2523 · CN 3102 · CN 2804.
Deadlines
- 1 January 2027 — UK CBAM starts; the first accounting period is the whole of 2027.
- 1 January 2028 — registration opens; 31 January 2028 — deadline for anyone liable in 2027.
- 31 May 2028 — the 2027 return and payment. From 2028 returns are quarterly.
Questions
When does UK CBAM start?
On 1 January 2027, for aluminium, cement, fertiliser, hydrogen and iron and steel imported into the UK (Schedule 17, Finance Act 2026).
Do I need to register for UK CBAM?
You must register once your CBAM imports reach £50,000: on the first day of a month when the preceding 12 months reach it, or as soon as you expect to import that much within 30 days. Registration opens on 1 January 2028; anyone who triggers registration in 2027 must notify HMRC by 31 January 2028.
How is the UK CBAM charge calculated?
Embodied direct emissions times the UK CBAM rate for the sector in the quarter of import, minus carbon price relief for a carbon price effectively paid abroad. The rate is published at the start of each quarter and already reflects UK ETS free allocation.
When is the first UK CBAM return due?
The first accounting period is the whole of 2027: the return and payment are due by 31 May 2028. From 2028 returns are quarterly.