UK Government takes next step towards CBAM implementation

20 July 2026

 

The UK Government has taken another significant step towards introducing its Carbon Border Adjustment Mechanism (CBAM) by laying the first tranche of secondary legislation that will govern how the new scheme operates when it comes into force on 1 January 2027.

The legislation provides much of the administrative framework for the UK's CBAM, including requirements covering registration, record keeping, returns, payment procedures and carbon price relief. It follows the introduction of the Finance Act 2026, which established the primary legislative framework for the new carbon levy on imported goods.

Designed to ensure imported carbon-intensive products face a comparable carbon price to equivalent UK-produced goods, the UK CBAM will apply to imports of aluminium, cement, fertiliser, hydrogen, iron and steel from 1 January 2027.

More guidance still to come

While the latest legislation provides greater certainty on how the scheme will operate, the Government has confirmed that further regulations covering emissions monitoring, reporting and verification will be introduced later this year, together with comprehensive guidance for businesses.

One of the most anticipated areas is the publication of default emissions values, which businesses will be able to use where actual emissions data is unavailable.

The Government has confirmed these values will be published in the autumn and has stated they will be based on a trade-weighted average, rather than a simple global average, to ensure businesses are not placed at an advantage by relying on default values instead of calculating actual embodied emissions.

What should businesses be doing now?

Although the UK CBAM does not begin until January 2027, importers of affected goods should use the remaining preparation period to review their supply chains and begin engaging with overseas suppliers.

Businesses importing products within scope should consider:

  • Identifying whether any imported goods will fall within the UK CBAM.
  • Speaking with suppliers about obtaining emissions data.
  • Reviewing internal systems for recording and retaining emissions information.
  • Understanding how CBAM could affect future import costs and commercial decisions.
  • Preparing for future reporting obligations as further guidance is published.

For many businesses, gathering reliable emissions data from overseas suppliers is expected to be one of the most significant compliance challenges. Starting preparations early can help avoid delays once reporting obligations begin.

As further legislation and guidance are released over the coming months, businesses will have a clearer picture of the practical requirements needed to comply with the new regime before it comes into force in January 2027.

 

By Carla Assunção, Chamber International

 

Preparing for the UK's CBAM? We can help.

Join our CBAM: Policy, Transition and Compliance workshop on 29 October, or enquire about our CBAM consultancy services for one-to-one support.

 

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