In short: A carbon border adjustment mechanism puts a carbon price on imports of carbon-intensive goods so they face a cost comparable to goods made under a domestic emissions trading scheme. The UK CBAM starts on 1 January 2027 for importers of aluminium, cement, fertiliser, hydrogen, and iron and steel, with registration required once imports reach £50,000 in a 12-month period and the first return and payment due by 31 May 2028. The EU CBAM entered its definitive period on 1 January 2026, with a 50-tonne annual threshold and authorised declarant status. TaxDigit's sustainability and tax team handles both, for UK importers, groups trading into both markets and overseas producers who must supply emissions data.
How the UK and EU CBAM differ
The UK CBAM is a tax administered by HMRC, set out in Schedule 17 to the Finance Act 2026 and its regulations. Scope is defined by commodity code, liability falls on the importer, and there is no reporting-only transitional phase: the charge applies from the first day. You can use actual embedded emissions verified for your supplier's installation or default values, and claim carbon price relief for carbon prices already paid overseas. Indirect emissions are not included until 2029 at the earliest.
The EU CBAM works through certificates priced in line with the EU ETS. Since 1 January 2026 only authorised CBAM declarants may import covered goods above 50 tonnes a year, with the first annual declaration and certificate surrender falling in 2027. A UK exporter selling steel or aluminium products into the EU does not pay EU CBAM itself, but its EU customers will ask for installation-level emissions data, and the price they pay will reflect it.
- UK importersBusinesses importing covered steel, aluminium, cement, fertiliser or hydrogen products.
- Groups trading UK and EUManaging both regimes and their different thresholds and data.
- Overseas producers and exportersSupplying verified embedded emissions data to UK and EU customers.
- Construction and manufacturing buyersPricing CBAM costs into contracts and supply chains.
Led by Dr Attieh Moezoddin, Head of Sustainability & ESG Advisory (PhD, Built Environment)Reviewed by Amir Rafiei, ACCA Certificate in Sustainability for FinanceLast reviewed
What we do
Commodity code review
We review your imports by commodity code and origin to confirm which goods are in scope of the UK CBAM, the EU CBAM or both.
£50,000 and 50 tonnes
We run the UK backward and forward-looking tests and the EU annual mass test so you register on time and no earlier than needed.
Actual versus default values
We help suppliers provide installation data, check verification, and model whether actual or default values give the lower charge.
Credit for carbon prices paid
We identify carbon prices effectively paid in the country of origin and prepare the evidence to claim relief.
Registration, records and returns
UK CBAM registration with HMRC, record-keeping, annual returns and payment; EU declarant authorisation through your EU entity or representative.
Pricing and transfer pricing
We model the cash cost, accrue it in the accounts and reflect it in intra-group prices. See sustainability transfer pricing.
UK CBAM and EU CBAM compared
| Feature | UK CBAM | EU CBAM |
|---|---|---|
| Start of charge | 1 January 2027 | Definitive period from 1 January 2026 |
| Sectors | Aluminium, cement, fertiliser, hydrogen, iron and steel | Aluminium, cement, fertilisers, hydrogen, iron and steel, electricity |
| Threshold | £50,000 of CBAM goods in 12 months (backward and forward tests) | 50 tonnes net mass a year per importer (not electricity or hydrogen) |
| Who is liable | The importer, registered with HMRC | Authorised CBAM declarant |
| Mechanism | Tax charged on embedded emissions at a CBAM rate | Purchase and surrender of CBAM certificates |
| First filing | Return and payment by 31 May 2028 for 2027 | First annual declaration and certificate surrender in 2027 |
| Indirect emissions | Not before 2029 | Included for certain sectors |
Plastic Packaging Tax and packaging extended producer responsibility for manufacturers are covered on our Plastic Packaging Tax and CBAM page.
How we help
Imports by commodity code, origin, supplier and value.
Thresholds, registration dates and liability under each regime.
Supplier emissions, verification and carbon price evidence.
Registration, records, returns and cost modelling.
A dedicated sustainability and ESG team
TaxDigit has a dedicated sustainability and ESG team, led by Dr Attieh Moezoddin, Head of Sustainability & ESG Advisory. Attieh holds a PhD in the Built Environment from the University of Salford and is a sustainable development researcher whose doctoral work built a framework for sustainable urban development using expert panels and multi-criteria analysis (fuzzy Delphi, fuzzy AHP and fuzzy TOPSIS) across social, environmental, economic and cultural pillars.
Finance, reporting and tax quality is reviewed by Amir Rafiei, Senior Manager for Global Tax Strategy, Transfer Pricing and Sustainability, who holds the 
ACCA Certificate in Sustainability for Finance. The team works side by side with our accounts, tax, payroll and international specialists, so your sustainability disclosures, financial statements and tax returns rest on one set of facts. Statutory audit is carried out separately by our alliance firm Jelveh Audit & Assurance.
- PhD, Built Environment
- Sustainable development research
- Materiality and expert panels
- SDGs and impact
- Climate risk and reporting
- ESG metrics and analytics
- IFRS S1, S2 and UK SRS
- CSRD and ESRS
- CBAM and green taxes
All sustainability and ESG services
See the full overview on our sustainability and ESG services page, or go straight to a related service. Large groups may also need our large and multinational group tax support.
Official sources
Rules, thresholds and dates on this page were checked against these sources on 14 November 2026. We re-check them whenever they change.
Frequently asked questions
When does the UK CBAM start?
On 1 January 2027. The first annual return and payment, covering 2027, are due by 31 May 2028.
Which goods are covered by the UK CBAM?
Specified goods in the aluminium, cement, fertiliser, hydrogen, and iron and steel sectors, identified by commodity code. Some scrap is excluded.
Who must register for the UK CBAM?
An importer whose CBAM goods reach £50,000 in value over the previous 12 months, or are expected to within the next 30 days. The value used is the customs value.
How does the EU CBAM threshold work?
Importers bringing in 50 tonnes or more of covered goods in a calendar year must be authorised CBAM declarants. Once the threshold is passed, all imports for that year are covered. Electricity and hydrogen have no mass threshold.
Does a UK exporter pay EU CBAM?
No, the EU importer is liable. But EU customers will ask UK producers for embedded emissions data and will price the CBAM cost into their purchasing.
Can we use our supplier's actual emissions?
Yes, if the supplier provides installation-level data verified under the rules. Otherwise default values apply, which are set to be cautious and usually cost more.
What is carbon price relief?
A reduction in the UK CBAM charge for a carbon price effectively paid in the country where the goods were produced, subject to evidence.
Do indirect emissions count?
Not under the UK CBAM before 2029. The EU CBAM includes indirect emissions for certain sectors.
Does CBAM affect our transfer pricing?
It can. CBAM is a real cost that must be borne by the right entity in a group, and intra-group prices for covered goods should reflect it.