The UK Government has published its second draft rules for its Carbon Border Adjustment Mechanism (CBAM), which are due to come into force on 1 January 2027. The framework will apply throughout the UK, including Northern Ireland.
The draft also extends the CBAM regime to goods imported into the UK from Crown Dependencies, Overseas Territories and the UK Continental Shelf, meaning the regime is intended to cover a wide range of incoming traffic beyond standard imports from third countries.
Sector coverage and excluded goods
The mechanism will apply a carbon price to emissions embodied in imports of specified goods in five sectors: aluminum, cement, fertilizers, hydrogen and iron and steel. Within each sector, CBAM's coverage is limited to specific products rather than a comprehensive industry approach.
The draft also confirms that some products will be excluded even within covered sectors, including imported aluminum and iron and steel scrap, reflecting the intention not to penalize recycled materials.
A person must register with the UK CBAM to HM Revenue & Customs once the total value of CBAM goods imported or expected to be imported reaches or exceeds the registration threshold of £50,000.
What importers must provide: registration and returns
At the registration stage, importers must provide basic identification and business information, including contact details data, business structure,
