UK CBAM from 2027: what importers of steel and aluminium goods must do

What the UK CBAM is

The Carbon Border Adjustment Mechanism (CBAM) is a tax on the greenhouse gases released in making certain goods, known as their embodied emissions. It applies to goods in scope imported into the UK on or after 1 January 2027. The framework is set out in the Finance Act 2026 and regulations made under it, so this is law rather than a proposal.

It covers five sectors: aluminium, cement, fertiliser, hydrogen, and iron and steel. For most furniture, garden and homeware importers, the two that matter are iron and steel, and aluminium.

The importer pays. That is the person named on the customs declaration, or the person on whose behalf it is made. A forwarder or customs broker making the declaration for you does not become the importer. You can appoint a tax agent to file CBAM returns, but they cannot register for you and they carry no liability.

The charge is the embodied emissions, measured in tonnes of carbon dioxide equivalent, multiplied by the CBAM rate for the sector. Rates follow the UK Emissions Trading Scheme carbon price, reduced to reflect free allowances, and are published at the start of each quarter. The rate that applies is the one in force when the goods are imported.

Which goods are in scope

Only goods with commodity codes on HMRC's lists are in scope. For importers of garden, furniture and homeware products, the entries most likely to matter are:

• Iron and steel products in chapter 72.
• Tubes, pipes, hollow profiles and their fittings (headings 7303 to 7307).
• Structures and parts of structures of iron or steel (7308), including doors, windows and their frames. Prefabricated buildings of heading 9406 are excluded from this heading.
• Screws, bolts, nuts, washers and similar articles (7318).
• Other articles of iron or steel (7326).
• Aluminium headings 7601, 7603 to 7614 and 7616. These include aluminium structures and parts of structures (7610), again excluding prefabricated buildings of heading 9406, and other articles of aluminium (7616).

Household articles of heading 7323 and finished furniture in chapter 94 do not appear on the published iron and steel or aluminium lists. The lists can be updated if the UK Tariff changes, so check against the current version (opens in a new tab).

The £50,000 registration threshold

You must register once the value of your CBAM goods reaches £50,000. Only goods on the CBAM lists count, not the whole value of a container. There are two tests, and you become liable from whichever date comes first:

• Looking forward, checked every day: if you expect to import £50,000 or more of CBAM goods in the next 30 days, you are liable from that day.
• Looking back, checked on the first day of each month: if you imported £50,000 or more of CBAM goods in the previous 12 months, you may be liable from the date your imports reached £50,000. The 12 months roll rather than following the calendar year, and imports before 1 January 2027 do not count.

Some goods do not count towards the threshold. These include goods of UK origin, goods brought back unchanged within three years under returned goods relief, goods under temporary admission with full relief, and goods in special procedures such as customs warehousing or inward processing, unless they are released into free circulation with duty due.

Registration, returns and payment

• Registration opens on 1 January 2028. You normally have 30 days from becoming liable to register, but for the first calendar year you have until 31 January 2028.
• The first accounting period is the whole of 2027, from 1 January to 31 December. The return and payment for it are due on 31 May 2028.
• From 2028, accounting periods are quarterly. For example, the return and payment for January to March 2028 are due on 31 July 2028.
• A return is needed even if you owe nothing for the period.
• You must keep records from the point you become liable, even though you cannot register until 2028.

Penalties apply for failing to notify liability, failing to file or pay, and errors in returns. HMRC can also register a business that should have registered but did not.

Actual emissions or default values

Embodied emissions are worked out from the weight of the goods and an emissions intensity, which is the emissions per tonne of product. You can use one of two figures:

• Actual verified data from the producer. It must be checked by an independent verifier that meets the eligibility criteria, and the verification report states the emissions intensity and the calendar year it covers.
• A default value published by the government. Default values (opens in a new tab) were published on 16 October 2026, with one set for each CBAM good, and they can be amended.

If the producer does not monitor its emissions to UK CBAM requirements, you must use the default values. For goods imported in 2027, you can use verified data for 2027 or, if that is not available, for 2026. From 2028, you can use the most recent verified figure from either of the two calendar years before import.

If a carbon price has already been paid on the emissions under a qualifying scheme abroad, you may be able to claim Carbon Price Relief. You need a carbon pricing verification form completed by an accredited, independent verifier, and the relief cannot be more than the CBAM due. HMRC publishes a list of qualifying schemes.

What to ask your suppliers now

Producers monitor emissions over a full calendar year, from 1 January to 31 December, so these conversations need to start well before your 2027 orders ship. Ask:

• Which commodity codes they expect your goods to fall under, then check them with your customs agent.
• For the net weight of each line in kilograms, without packaging, on the packing list or invoice.
• Which factory actually produced the steel or aluminium goods, if you buy through a trading company.
• Whether that producer will monitor its emissions for the calendar year and have them verified by an accredited verifier.
• Whether they can send you the verification report, or a verification summary for each good you buy.
• Whether any carbon price has been paid under a scheme on HMRC's qualifying list.

Portside chases factories for paperwork and files documents against each shipment, so verification summaries and weight records can sit with the container they belong to.

Records to keep

From 1 January 2027, keep records for each CBAM good, in writing or electronically, for six years. HMRC can charge a fixed £500 penalty if records are not kept. Keep:

• The 8-digit commodity code and a description of the goods.
• The date the goods passed the tax point, and their value.
• The net weight in kilograms, excluding packaging, as imported.
• Import declarations, bills of lading, commercial invoices and packing lists that support these figures.
• Verification reports or summaries, if you use actual emissions.
• Evidence for any exemption or relief you rely on.
• How you estimated your weights by sector, which you will need when you register.

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