UK Carbon Border Adjustment MechanismUK CBAM
The UK CBAM applies from 1 January 2027. HMRC registration opens on 1 January 2028. The sector list differs from the EU mechanism: five sectors, excluding electricity.
- Legislation
- Finance Act 2026
- Part 5 and Schedule 17
- Applies from
- 1 January 2027
- Registration opens
- 1 January 2028
- Registration threshold
- £50,000
- Rolling 12 months; raised from £10,000 proposed
- Sectors
- 5
- Aluminium, cement, fertilisers, hydrogen, iron & steel
- Record retention
- 6 years
- Authority
- HMRC
Where these figures come from
Five sectors and a £50,000 registration threshold, both differing from the EU mechanism
The UK CBAM covers aluminium, cement, fertilisers, hydrogen, and iron and steel. It excludes electricity, which the EU mechanism covers, along with glass and ceramics. The minimum registration threshold was set at £50,000 rather than the £10,000 originally consulted on. An importer of aluminium into both markets faces two different scopes, two different thresholds and two different authorities.
The UK CBAM applies from 1 January 2027 to imports of aluminium, cement, fertilisers, hydrogen, and iron and steel, charging a carbon price matched to the UK ETS. It is legislated in Finance Act 2026. Businesses importing £50,000 or more of CBAM goods over a rolling 12-month period — or expecting to cross that within 30 days — must register with HMRC. Registration opens on 1 January 2028. Records must be kept for at least six years.
Liability from 2027, registration from 2028
Liability tests apply from 1 January 2027. HMRC registration opens on 1 January 2028. The first compliance year requires emissions data, supplier declarations and import records collected in 2027, before registration opens.
Commodity codes in scope, identification of the liable person, and embedded-emissions figures from suppliers must be established before 1 January 2027.
Differences from the EU CBAM
The two mechanisms differ in sector scope, threshold basis (value in the UK, mass in the EU), calculation mechanics, and treatment of carbon already paid abroad. An EU CBAM assessment does not determine UK scope.
Penalties
Civil penalties under the UK tax regime, administered by HMRC.
Civil penalties for understatement
Enforcement follows the UK tax penalty framework, with detail set out in secondary legislation. Amounts are not listed in this entry — check the instrument via the official source.
Does this apply to you?
Determined by what is imported, its value, and whether the business is the liable person on the import.
- Importing aluminium, cement, fertilisers, hydrogen, or iron and steel into the UK
- £50,000 or more of CBAM goods over a rolling 12-month period, or expected within 30 days
- You are the importer of record — check this, because the liable person is not always the buyer
Not sure whether UK CBAM catches you?
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Common questions
- When does the UK CBAM start?
- 1 January 2027. Registration with HMRC opens a year later, on 1 January 2028, so the first compliance year is documented from records kept contemporaneously in 2027.
- What is the UK CBAM registration threshold?
- £50,000 of CBAM goods over a rolling 12-month period, or an expectation of crossing it within the next 30 days. This was raised from the £10,000 originally proposed.
- Is the UK CBAM the same as the EU one?
- No. The UK covers five sectors and excludes electricity, which the EU covers; the thresholds are set on different bases (£50,000 of value in the UK, 50 tonnes of mass in the EU); and the authorities and calculation mechanics differ.