In 2025, the EU introduced the Carbon Border Adjustment Mechanism (CBAM) to equalise the price of carbon paid for EU products operating under the Union’s Emissions Trading System (ETS) with that of imported goods.
With effect from 1 January 2027, the Carbon Border Adjustment Mechanism (Emissions and Verification) Regulations 2026 will introduce the UK version of CBAM.
They set the technical rules for how importers must calculate and verify the embodied carbon emissions of goods subject to the UK CBAM.
As with the EU version, their main purpose is to ensure that imported carbon‑intensive goods — such as aluminium, cement, iron and steel, fertiliser and hydrogen — are subject to a carbon price comparable to that paid by UK manufacturers, thereby reducing carbon leakage.
The regulations define how emissions attributable to a CBAM good must be measured, offering two pathways: default values published by the Treasury; or actual emissions data from the production installation.
However, the latter option must follow a prescribed multi‑step methodology covering direct, precursor, and process emissions, supported by an emissions conversion table and with mandatory independent verification.
Verifiers must meet strict accreditation requirements and produce a formal verification report confirming that emissions data has been monitored, calculated and documented correctly. HM Revenue and Customs (HMRC) may issue notices specifying acceptable methodologies, monitoring periods and evidence standards.
Importers must keep detailed records, including verified emissions data and supporting documentation, and must comply with attribution rules determining which installation’s emissions apply.
