In just over 70 days, the UK will start charging a carbon tax on imports of steel, aluminium, cement, fertiliser and hydrogen. The UK Carbon Border Adjustment Mechanism (CBAM) applies from 1 January 2027, and HMRC has now published the detailed guidance that importers, overseas producers and their customs agents have been waiting for. Default emission values will apply in 2027 and 2028, the first rates will be published before the end of the year, and businesses can comment on the technical rules until 13 November.
What HMRC has published According to the British International Freight Association (BIFA), HMRC published a package of nine documents following a ministerial statement on 16 October. They include:
- illustrative CBAM rates and a worked example,
- a draft notice on default emission values, which will have the force of law,
- guidance on how CBAM rates work and when they are published,
- guidance for overseas producers on monitoring emissions and getting them verified,
- a detailed technical guide on monitoring, reporting and verification of emissions.
BIFA notes that the government will use default values for 2027 and 2028 and intends to move to country-specific defaults from 2029. Feedback on the technical guide can be sent to HMRC until 13 November 2026.
How the tax works According to the CBAM policy summary, the liable person is the importer, usually the person in whose name the customs declaration is made. Customs agents can submit returns on behalf of clients but are not liable for the tax.
The charge is calculated by multiplying the embodied emissions of the imported goods by the CBAM rate for the sector. There is one rate per sector, set every quarter, based on the average UK ETS auction price and adjusted for free allowances. Importers can reduce the bill if a carbon price was already paid in the country of origin.
If verified emissions data from the producer is not available, importers must use default values, which are usually less favourable.
trans.info explained earlier this month which imports the new carbon tax will hit from January.
Key dates
- 1 January 2027: CBAM applies to goods imported from this date,
- by the end of 2026: rates for Q1 2027 published,
- 1 January 2028: registration opens; for the first year businesses have until 31 January 2028 to register,
- 31 May 2028: deadline for the first return and payment, covering the whole of 2027,
- from 2028: quarterly accounting periods.
The registration threshold is £50,000 of CBAM goods, tested both over the previous 12 months and for the next 30 days.
Why it matters for logistics The tax is paid by importers, but much of the work will fall on the supply chain. Customs brokers and freight forwarders will need to know which commodity codes are covered, collect emissions data from overseas suppliers and keep accurate records of who the importer is.
The UK scheme follows the EU’s own CBAM, whose definitive phase started on 1 January 2026. Businesses that trade with both markets will have to manage two similar but separate systems, with different rates, registers and deadlines.
