The UK government is introducing a Carbon Border Adjustment Mechanism (CBAM) from 1 January 2027.
CBAM places a carbon price on highly traded, carbon intensive products imported into the UK, ensuring they face a comparable carbon price to that paid by UK manufacturers.
CBAM will apply to specified goods that are imported into the UK on or after 1 January 2027 from the following sectors:
- aluminium
- cement
- fertiliser
- hydrogen
- iron and steel
Who may be affected:
- importers of CBAM goods into the UK from 1 January 2027
- it may also affect overseas producers of these goods in supply chains, and tax agents acting on behalf of importers
What this means for liable persons:
- liable persons who import specific goods worth £50,000 or more from the sectors above over a 12-month period will need to:
- keep a record of all CBAM goods imported into the UK from 1 January 2027
- report the emissions intensity within their imported CBAM good(s) on their CBAM tax return
- register from 1 January 2028, with their first return and payment due by 31 May 2028
If you are intending to use actual emissions data, you may want to start discussing the steps required to obtain and verify this data. If actual, verified emissions aren’t available, default emissions values can be used instead. Further details on default emissions values will be published in advance of the introduction of CBAM in 2027.
Preparing for CBAM
If your business imports goods within the CBAM sectors, now is the time to start planning. Early preparation can make compliance simpler and help you understand any potential financial impact. To discuss how CBAM could affect your business and the steps you should be taking, please contact Ruth Corkin or your usual Hillier Hopkins adviser.
