UK CBAM 2027: Carbon Reporting Requirements and How to Prepare
From 1 January 2027, some UK businesses importing carbon-intensive goods will need to account for a new tax linked to the greenhouse gas emissions associated with producing those goods.
The UK Carbon Border Adjustment Mechanism (CBAM) introduces new considerations for importers, from checking which products are covered to understanding the emissions information needed for reporting. If your business imports materials such as steel, aluminium or cement, now is a useful time to understand what the changes could mean for you.
You don't need to be a carbon reporting expert to begin preparing. Understanding your imports, speaking with suppliers and knowing which records to keep are all practical starting points.
This guide explains UK CBAM reporting requirements, who may be affected, the key deadlines and how emissions information is used. We'll also explore how this connects to wider business carbon measurement, including product carbon footprints and supplier data.
What Is UK CBAM?
The UK Carbon Border Adjustment Mechanism (CBAM) is a new tax on certain carbon-intensive goods imported into the United Kingdom. It starts on 1 January 2027 and applies across the UK, including Northern Ireland.
Its purpose is to address a problem known as carbon leakage. This happens when production moves to countries with lower carbon costs, potentially shifting emissions overseas rather than reducing them overall.
Some UK manufacturers already face carbon costs through the UK Emissions Trading Scheme (UK ETS). CBAM aims to ensure that specified imported goods face a more comparable carbon price.
For businesses, the important point is that CBAM isn't a general carbon reporting requirement for every organisation. It applies to particular imported products and has its own rules for calculating the tax.
The UK Government's CBAM policy summary provides the official framework.
If you're also exploring broader business reporting obligations, our guide to ESG reporting requirements in the UK and Europe explains how different reporting frameworks fit into the wider picture.
Which Businesses and Goods Are Affected by UK CBAM?
UK CBAM initially covers specified goods within five sectors:
Aluminium
Cement
Fertilisers
Hydrogen
Iron and steel
Not every product within these industries is covered. The rules identify qualifying goods using commodity codes, which are the classification numbers used for customs purposes.
For example, certain aluminium bars, steel products and cement products may fall within the scheme, while other products in the same broad industries may not.
A construction company importing covered steel products directly could therefore have CBAM responsibilities. A business purchasing the same products from a UK distributor would need to establish who was legally responsible for importing them, rather than assuming the tax applies directly to its purchase.
The government provides a list of qualifying goods and commodity codes to help importers check their position.
Who is responsible for CBAM compliance?
CBAM compliance generally falls to the importer of the qualifying goods. Where a customs declaration is required, this is the person in whose name the declaration is made or the person on whose behalf it is made.
Using a customs agent does not necessarily transfer the tax responsibility to that agent. Businesses should therefore establish who is legally responsible under their import arrangements.
What is the £50,000 CBAM threshold?
UK CBAM has a £50,000 registration threshold, based on the value of qualifying imported goods rather than the total value of all imports.
There are two tests:
Forward-looking test: You expect to import qualifying CBAM goods worth £50,000 or more over the next 30 days.
Backward-looking test: On the first day of a month, you assess whether qualifying imports reached £50,000 or more during the preceding 12 months.
For the first year, only qualifying goods imported from 1 January 2027 count towards the threshold.
Imagine a business expects to import £60,000 worth of covered steel products during January 2027. It could become liable to register under the forward-looking test before those goods arrive.
The threshold concerns the value of the relevant imports, not the amount of CBAM tax payable.
HMRC's registration guidance explains both tests and provides examples.
UK CBAM 2027: Key Dates and Reporting Deadlines
Although UK CBAM begins in January 2027, the first return and payment will be due in 2028. This gives affected businesses time to gather information about their qualifying imports and associated emissions.
Date | What happens |
1 January 2027 | UK CBAM begins for qualifying imported goods |
1 January – 31 December 2027 | First annual accounting period |
31 May 2028 | First annual CBAM return and payment deadline |
31 July 2028 | Return and payment deadline for January–March 2028 |
29 September 2028 | Return and payment deadline for April–June 2028 |
30 November 2028 | Return and payment deadline for July–September 2028 |
28 February 2029 | Return and payment deadline for October–December 2028 |
From 2028, accounting periods become quarterly, with transitional deadlines before the system settles into its regular timetable.
Registration is a separate obligation. Businesses that meet the registration threshold need to follow HMRC's applicable registration arrangements and transitional rules.
It's worth keeping an eye on the official UK CBAM guidance collection, particularly as further guidance may be published before the scheme starts.
What Are the UK CBAM Reporting Requirements?
For businesses within the scheme, CBAM reporting requirements involve more than recording the cost of imported materials. HMRC also needs information about the relevant goods and their associated emissions.
The information required on a return includes:
The qualifying goods imported, identified by the relevant commodity codes.
The net weight of the goods.
The emissions intensity associated with those goods.
The quarter in which the goods passed the relevant tax point, for the first annual return.
The country of origin.
Information about any qualifying overseas carbon price used to claim relief.
Importers also need supporting records, including relevant customs information and evidence for emissions figures where actual verified data is used.
The government generally requires these records to be retained for six years after the end of the relevant accounting period.
How does UK CBAM calculate emissions?
UK CBAM focuses on the emissions embodied in the production of covered goods, using boundaries defined by the scheme.
For example, producing steel can generate greenhouse gas emissions through industrial processes and fuel use. CBAM considers the relevant production emissions when calculating the charge on qualifying imported steel products.
Initially, UK CBAM focuses on relevant direct emissions associated with production. These are not the same as every emission that might appear in a full product carbon footprint.
Emissions intensity is expressed in tonnes of carbon dioxide equivalent (tCO₂e) per tonne of product. The applicable CBAM rate depends on the sector and the quarter in which the goods are imported.
The rate reflects UK carbon pricing under the UK ETS, and eligible carbon prices already paid overseas may reduce the amount due where the necessary conditions and evidence requirements are met.
For the formal calculation, businesses should use HMRC's guidance on emissions intensity and CBAM rates.
Actual emissions data or government default values?
Importers have two main approaches to determining the emissions intensity used for CBAM:
Approach | What it means |
Verified actual emissions data | Emissions information monitored and calculated according to the relevant CBAM methodology, supported by the required independent verification |
HMRC default values | Government-published emissions intensity values that can be used instead of verified actual emissions data |
Using actual emissions data requires more than receiving an estimate from a supplier. Importers need suitable verification evidence, such as a verification report or a good-specific verification summary.
Where verified actual emissions information is unavailable, or the required verification evidence is missing, HMRC default values must be used.
You can review the government's published CBAM default values for the relevant goods.
How Does a Product Carbon Footprint Relate to UK CBAM?
A product carbon footprint measures or estimates the greenhouse gas emissions associated with a product within a defined boundary.
Depending on the method used, it may include emissions from raw materials, manufacturing, transport, product use and disposal. Other calculations may focus on fewer stages of a product's life cycle.
Product carbon footprints can help organisations understand where emissions occur in their supply chains and identify opportunities for further investigation.
UK CBAM also uses product-related emissions information, but its calculations follow specific legal boundaries, monitoring rules and verification requirements.
This means that a product carbon footprint is not automatically suitable for a UK CBAM return.
For example, a supplier might share a product footprint covering raw materials, manufacturing and transport. That information could be valuable for wider business carbon measurement, but an importer would still need to establish whether it meets HMRC's rules before using it as verified actual emissions data.
The distinction is particularly important for businesses working on both regulatory reporting and their wider greenhouse gas inventories.
If you're new to carbon calculations, our guide to emission factors explains how activity data can be converted into estimated emissions for wider carbon accounting purposes.
Why Supplier Information Matters for UK CBAM
For many importers, one of the practical challenges is that the relevant production emissions information sits with the overseas manufacturer.
A UK importer may know how much steel or aluminium it purchased, but not have direct access to the manufacturing processes, fuel consumption or emissions monitoring records associated with producing those goods.
This makes communication with suppliers an important part of preparation, especially where a business wants to use verified actual emissions rather than HMRC default values.
What should importers ask their suppliers?
A useful starting point is to establish:
Which installation produced the goods? Identify the relevant factory, plant or production facility.
Which products and production periods does the information cover? Check that the emissions figures relate to the correct goods and monitoring period.
Is verified emissions intensity available? Ask whether the manufacturer has monitored emissions using the UK CBAM methodology.
What verification evidence can be provided? Establish whether the supplier can supply the required verification report or good-specific summary.
When will the information be available? Agree when the supplier expects to provide the data needed for your return.
These questions can help importers understand what information is available and where they may need to use HMRC default values instead.
HMRC's technical guidance on monitoring, verifying and reporting emissions provides further detail for overseas producers, verifiers and importers.
Why does data quality matter beyond CBAM?
The need to understand where emissions figures come from isn't unique to CBAM.
Businesses measuring their wider carbon footprint also need to consider whether information is based on actual activity data, estimates or assumptions. These approaches can all have a place in carbon accounting, but they shouldn't be presented as though they offer the same level of accuracy.
Our articles on improving carbon data and when businesses can estimate carbon emissions explore these considerations in more detail.
How Does This Connect to Scope 3 and Event Carbon Tracking?
UK CBAM is a specific tax on qualifying imported goods. It does not introduce a general legal requirement for every business or event organiser to calculate its carbon footprint.
However, the wider challenge of obtaining useful information from suppliers is relevant to many organisations working on emissions measurement.
Under the Greenhouse Gas Protocol, Scope 3 emissions include indirect emissions occurring in an organisation's value chain. Depending on the business, this may include purchased goods and services, transportation and other activities.
For example, a business may want to understand emissions associated with materials purchased from suppliers, even where those purchases are not directly subject to CBAM.
Our guide to Scope 1, 2 and 3 emissions explains the different categories and how they relate to business carbon measurement.
What about event suppliers?
Event organisers face a similar data collection challenge when measuring emissions associated with an event.
Different suppliers may hold different pieces of information:
Venues: Electricity and heating use attributable to the event.
Caterers: Food quantities, menus and catering activities.
Production suppliers: Equipment, fuel use and temporary power requirements.
Transport providers: Vehicle types, distances travelled and relevant fuel information.
Bringing this information together can help organisers build a more informed estimate of their event's carbon footprint.
The calculation methods and reporting purposes are different from UK CBAM. Event carbon tracking should not be confused with HMRC's product-specific tax and verification requirements.
For more practical guidance, read our article on tracking your Scope 3 supply chain for events.
How Scope Carbon Tracking Can Help With Wider Emissions Measurement
Understanding emissions often begins with identifying which activities generate them and what information is available.
For businesses, this might mean gathering data about energy consumption, transport and other relevant operational activities. For event organisers, it may involve bringing together information from venues, suppliers and event-related travel.
Scope Carbon Tracking helps organisations measure and track emissions associated with their businesses and events.
Our Business Carbon Tracking offering focuses on business emissions measurement, while Event Carbon Tracking supports the measurement of emissions associated with events.
Businesses exploring their first carbon footprint can also learn about our Business Carbon Calculator.
It's important to distinguish these services from UK CBAM compliance. Scope does not provide CBAM tax registration, independently verified CBAM emissions figures or HMRC tax return preparation.
Where CBAM applies, importers must follow HMRC's specific requirements. Wider carbon tracking serves a different purpose: helping organisations understand and monitor emissions across the activities they choose or need to measure.
UK CBAM Preparation Checklist: Where Should You Start?
If your business imports goods that may be covered by UK CBAM, preparation can begin with a few practical checks.
Review your imports: Identify goods that may fall within the five covered sectors.
Check commodity codes: Compare the codes used in your customs records with HMRC's qualifying goods list.
Assess the threshold: Review qualifying import values against the £50,000 forward-looking and backward-looking tests.
Confirm responsibility: Establish which legal entity is responsible for the imports.
Speak with manufacturers: Ask whether verified actual emissions information will be available.
Review default values: Understand when HMRC's published values must be used.
Organise records: Keep the relevant customs, emissions and verification information.
Plan for deadlines: Note the registration arrangements and first return and payment dates.
Get specialist advice where needed: Complex customs arrangements and tax calculations may require professional support.
You don't need to complete every step at once. Starting with your import records and the relevant commodity codes can help you understand whether more detailed preparation is necessary.
Frequently Asked Questions About UK CBAM
When does UK CBAM start?
UK CBAM starts on 1 January 2027. The tax applies to specified qualifying goods imported into the UK from that date, subject to the scheme's rules.
Is CBAM UK the same as EU CBAM?
CBAM in the UK and EU are separate schemes. They have different legal frameworks, administrative requirements and product coverage. Businesses importing into both markets should review the requirements for each independently.
What is the UK CBAM registration threshold?
The UK CBAM registration threshold is £50,000 in qualifying imported goods, assessed under the relevant forward-looking 30-day and backward-looking 12-month tests.
What are the main CBAM reporting requirements?
CBAM reporting requirements include identifying qualifying imported goods, recording their weight and relevant commodity codes, determining the applicable emissions intensity and maintaining supporting evidence. Businesses that are liable must also submit the relevant tax returns and pay any tax due.
Does UK CBAM require a product carbon footprint?
UK CBAM requires emissions information calculated according to its own rules. A general product carbon footprint may be useful for wider carbon measurement, but it does not automatically meet the scheme's requirements for verified actual emissions data.
Can businesses use default emissions values for UK CBAM?
UK CBAM allows HMRC's published default values to be used instead of verified actual emissions data. Where actual data or the necessary verification evidence is unavailable, importers must use the applicable default values.
Does Scope Carbon Tracking provide CBAM compliance services?
Scope Carbon Tracking focuses on business and event emissions measurement, rather than CBAM tax registration, verified CBAM emissions reporting or tax return preparation. Its services support wider carbon tracking needs, which are separate from the scheme's legal requirements.
Preparing for UK CBAM 2027
UK CBAM introduces new responsibilities for businesses importing specified carbon-intensive goods, but preparation can begin with familiar information: what your business imports, who supplies those goods and what records are already available.
Checking commodity codes, understanding the registration threshold and speaking with overseas manufacturers can help you identify the information needed ahead of the first reporting deadline.
For organisations also looking to understand emissions across their wider operations, developing a clearer picture of activity data is a useful starting point.
If you're beginning or developing your business carbon measurement, explore Scope Business Carbon Tracking to see how Scope supports wider emissions tracking. For organisations measuring the footprint of their events, you can also explore Scope Event Carbon Tracking.
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