HM Revenue and Customs (HMRC) has launched a technical consultation setting out some of the draft secondary legislation that will come into effect on 1 January 2027 as the UK version of the Carbon Border Adjustment Mechanism (CBAM) is introduced. The deadline for submitting responses is 21 May 2026.
The UK CBAM will place a carbon price on specified goods imported to the UK from sectors that are at risk of carbon leakage. Primary legislation for its introduction was included in the Finance Act 2026.
The aim is to ensure that highly traded, carbon intensive products from jurisdictions outside the UK face a comparable carbon price to that paid by UK manufacturers, so that UK decarbonisation efforts lead to a true reduction in global emissions rather than simply displacing carbon emissions overseas.
With full details available here, this consultation includes the legislative requirements associated with the administration of the tax, including but not limited to embodied emissions and the monitoring and verification of emissions data.
It is expected to be of interest to the UK importers of goods from the aluminium, cement, fertilisers, hydrogen, and iron and steel sectors and downstream producers that use these goods in their supply chains as well as overseas producers of CBAM goods for export to the UK.
The consultation also concerns overseas accreditation bodies and verifiers of emissions, who will be impacted by the legislation if overseas producers choose to monitor the actual emissions they produce.
The EU version of the Carbon Border Adjustment Mechanism came into effect on 1 January 2026.
