CBAM Guide for UK & EU Importers

Published 21 May 2026 · Updated 6 October 2026 · 10 min read · CBAM Reporter →

The Carbon Border Adjustment Mechanism (CBAM) is reshaping global trade policy. The EU launched its CBAM transitional phase in October 2023, and the UK is introducing its own parallel mechanism. For businesses trading across both regimes, understanding the differences — and the compliance requirements — is critical in 2026 and beyond.

What Is CBAM?

CBAM is a carbon pricing instrument applied to imports of carbon-intensive goods from countries with weaker or no carbon pricing. Its purpose is to prevent "carbon leakage" — the risk that companies move production to countries with laxer climate regulation to avoid paying for carbon emissions.

In practical terms, CBAM requires importers to:

1. Report the embedded (or "embodied") carbon emissions of imported goods
2. Acquire and surrender certificates corresponding to those emissions
3. Receive credit for any carbon price already paid in the country of production

EU CBAM vs UK CBAM — Key Differences

EU CBAM: What You Must Do Before 30 September 2027

If your company imported any of the following goods into the EU during 2026, you have a binding obligation to submit an annual CBAM declaration by 30 September 2027. Importers whose total imports of CBAM goods stay at or below 50 tonnes per year are exempt (the threshold does not apply to electricity and hydrogen):

• Iron and steel — CN codes 72xx, 73xx (selected)
• Aluminium — CN codes 76xx (selected)
• Cement — CN codes 25xx (selected)
• Fertilisers — CN codes 28xx, 31xx (selected)
• Electricity — CN code 2716
• Hydrogen — CN code 2804 40 00

The annual declaration must include:

• The total quantity of each CBAM good imported during the calendar year
• The total actual embedded emissions per good type (in tCO₂e per tonne)
• Where actual data is unavailable: default values published by the European Commission
• The carbon price already paid in the country of origin

EU CBAM: The Certificate Phase (2026 Onwards)

From 2026, EU importers must purchase CBAM certificates to cover the embedded emissions of their imports. The certificate price tracks the EU ETS carbon price. Key points:

• Certificates go on sale on 1 February 2027 and must be surrendered annually (by 30 September of the following year)
• The price is set weekly based on the average ETS auction price
• Quarterly checkpoints apply (31 March, 30 June, 30 September, 31 December): importers must hold certificates covering at least 50% of the embedded emissions of goods imported since 1 January
• Unused certificates can be partially repurchased by national authorities

Preparing for UK CBAM (2027)

UK businesses importing covered goods from non-UK countries should begin preparing now, even though UK CBAM formally launches on 1 January 2027:

1. Data readiness

Start collecting embedded emissions data from your non-UK suppliers now. Getting accurate production emissions data from steel mills in India, China or Turkey takes months of engagement. Don't wait until 2027.

2. Supply chain mapping

Map which goods you import and from which countries. Some countries will have carbon pricing schemes that reduce the UK CBAM liability. The UK government will publish a list of qualifying carbon prices.

3. System setup

HMRC will operate the UK CBAM levy through a new online service. Register early to avoid delays. The reporting methodology is expected to broadly mirror the EU approach.

4. Dual exposure for EU-UK traders

Companies that both import into the EU and export into the UK from third countries may face CBAM obligations in both jurisdictions. Plan for dual reporting requirements.

Simplifying CBAM Reporting

Whether you're dealing with EU CBAM now or preparing for UK CBAM in 2027, the core challenge is the same: collecting embedded emissions data from multiple suppliers, calculating totals by product category and origin country, and generating a compliant report.

An online tool purpose-built for CBAM reporting can handle this in minutes rather than weeks:

• Register all CBAM-covered imports with quantities and origins
• Link emissions data from suppliers or apply default values automatically
• Calculate carbon price credits for production countries with ETS
• Generate a complete annual declaration ready for submission