The UK Carbon Border Adjustment Mechanism (CBAM) places a carbon price on carbon-intensive goods imported into the UK to prevent "carbon leakage"—ensuring overseas imports pay a comparable carbon tax to goods produced domestically under the UK Emissions Trading Scheme (UK ETS).
UK CBAM 2027 - Carbon Border Adjustment Mechanism
Registration Threshold: Importers must register for CBAM if the total value of CBAM-scoped goods imported into the UK exceeds £50,000 over a rolling 12-month period (or is expected to exceed £50,000 in the next 30 days).
Geographic Scope: Applies across the entire UK (England, Scotland, Wales, and Northern Ireland), as well as imports from Crown Dependencies, Overseas Territories, and the UK Continental Shelf.
Sectors & Products Covered by CBAM
CBAM applies to imported products (defined by specific commodity codes) in five key sectors:
- Aluminium
- Cement
- Fertiliser
- Hydrogen
- Iron & Steel
(Note: Certain items such as scrap metal, UK-origin goods, non-business imports, and goods under full customs temporary admission relief are exempt.)
Legal & Financial Responsibility for CBAM compliance
Liable Party: The importer of record - the entity in whose name (or on whose behalf) the customs declaration is made.
Calculation: The tax is based on the weight of the imported goods multiplied by the embodied emissions (direct and specified indirect emissions), adjusted for any carbon price already paid in the country of origin (Carbon Price Relief).
Tax Agents: Importers can appoint tax agents to file returns, but primary legal liability remains strictly with the importer.
Preparing for the UK CBAM (Effective 1st January 2027)
From 1st January 2027, importing carbon-intensive goods into the UK will carry explicit reporting, compliance, and financial obligations under UK CBAM.
While freight forwarders, customs brokers, and 3PLs are generally not the legally liable party, logistics providers play a critical role in data capture, classification, and customs declarations.
Commodity Classification
Audit all SKU commodity codes against the official UK CBAM annex list. Misclassifying HS codes can lead to unexpected tax liabilities or missed registration thresholds.
Data & Visibility
Demand verified emissions data from overseas suppliers/installations now. Importers must report actual embodied emissions data (or rely on UK default values, which carry higher tax rates).
Customs Special Procedures
Review customs regime usage with your broker to avoid premature tax points. Goods under Inward Processing, Freezones, or Outward Processing trigger complex tax point rules upon release to free circulation.
Financial & Registration Liability
Monitor rolling 12-month import values for in-scope raw materials and components. Exceeding the £50,000 annual threshold obligates the importer to register with HMRC and submit quarterly CBAM returns.
CBAM UK Key Action Items & Timeline for Importers
Step 1: Supply Chain & Tariff Audit (Immediate)
Identify all products entering the UK in the Aluminium, Steel, Cement, Fertiliser, and Hydrogen sectors. Verify that tariff codes accurately reflect the physical goods (e.g., distinguishing raw/processed metals from exempt scrap).
Step 2: Establish Overseas Vendor Data Flows
Request direct installation emissions data from overseas manufacturers. Using verified actual emissions allows importers to claim legitimate reductions and apply Carbon Price Relief (CPR) for taxes already paid abroad.
Step 3: Align Customs Declarations & Logistics Workflows
Ensure customs brokers and 3PL partners are clear on who acts as the importer of record. Coordinate with software providers to ensure declarations capture net weight and emissions data accurately at the customs tax point.
Need additional guidance? Reach out to SEKO Logistics UK team for more information.
