UK CBAM: what small importers need to do before January 2027

What UK CBAM covers

UK CBAM applies to goods in five sectors, identified by commodity code:

• Aluminium
• Cement
• Fertilisers
• Hydrogen
• Iron and steel

Some downstream products made mostly of steel or aluminium are in scope too, so check each commodity code you import rather than the general description. Unlike the EU scheme, electricity is not covered.

The emissions counted are those released in making the goods, including the emissions of precursors, such as steel slab later rolled into pipe. HMRC's guidance also brings in indirect emissions from the electricity used in production, which differs from the EU approach, so check the current guidance for each product. Relief is available where a carbon price has already been paid in the country of production.

Who has to register and pay

The charge falls on the UK importer. You must register with HMRC if your imports of in-scope goods reach £50,000 or more in 12 months. For the first year, registration is due by 31 January 2028. Below the threshold, UK CBAM does not apply to those imports.

Registered importers report the embedded emissions of their in-scope goods and pay a charge at a rate linked to the UK ETS carbon price. HMRC sets out the return periods and payment dates, and is still publishing detail, so check its current guidance before you rely on any summary, including this one.

How the cost is worked out

The charge depends on three things: the tonnage you import, the embedded emissions per tonne, and the UK CBAM rate. Multiply them together and you have the liability.

Embedded emissions can come from two places. Actual data is the producer's measured fuel, electricity and process emissions for the installation, allocated to the goods, plus any precursors. Default values are set by the authorities for use when actual data is missing, and they are designed to be cautious, so they usually give a higher figure.

That is why supplier data matters. Good data from a cleaner producer lowers the bill, and any real data makes the cost predictable, which is what you need for quotes and budgets. The rate follows the UK ETS price and will move, so budget with a range and review it each year.

What to ask your overseas suppliers

• The installation where the goods were made, and its country.
• The embedded emissions per tonne of each product, and the method used.
• Whether indirect emissions from electricity are included.
• The embedded emissions of any precursors.
• Any carbon price paid in the country of production.
• Whether the figures have been independently verified.
• Whether they already supply the same figures to EU customers.

Suppliers already selling into the EU may have installation-level data prepared for their EU customers. The UK and EU methods differ in places, but the underlying data is the same, so ask for it first.

Four things to do before January

1. 1Map purchases to commodity codesCheck each imported product against the UK Integrated Online Tariff and list the in-scope ones by supplier.
2. 2Check the thresholdAdd up the value of in-scope imports over 12 months and compare it with the £50,000 threshold.
3. 3Request supplier dataStart with the suppliers behind most of your in-scope tonnage. Data from overseas producers can take months to arrive.
4. 4Price it inReview quotes and long-term contracts that do not allow for the cost, and compare suppliers on landed cost, not the invoice price alone.

Using less material also cuts the liability. Better nesting, less scrap and lighter designs all reduce the tonnage you import. If you export in-scope goods to the EU, your customers there report under the EU CBAM and may ask you for embedded emissions data. The same records can answer both.

How ESGen helps with UK CBAM

UK CBAM readiness is team work at ESGen, scoped with you, not a platform feature. Our team can map your purchases to in-scope commodity codes, estimate your exposure as a range from your purchase records and any supplier data, and help you put together the supplier questions above.

ESGen does not register businesses with HMRC, file CBAM returns, handle customs or verify emissions. Those steps stay with you and your customs agent or adviser. Our CBAM page explains how we work, and our regulations overview sets UK CBAM next to the other UK rules.

If your imports could cross the threshold next year, talk to our team with a year of purchase records to hand.