The UK government has facilitated a technical consultation on draft legislation for its own Carbon Border Adjustment Mechanism (CBAM), clarifying its scope, calculation and administration ahead of a July 3, 2025 deadline. From January 1 2027 (a year after the European Union’s CBAM implementation), the nation-imposed CBAM will place a carbon price on imports of emissions-intensive goods, including aluminium, safeguarding domestic producers against ‘carbon leakage’. It targets UK businesses importing over GBP 50,000 of specified goods in a 12-month period while exempting certain scrap products. The mechanism ensures that imported goods “face a carbon price which is comparable to the carbon price paid by domestic producers”.
_0_0.jpg)
Image for representational purposes only
Consultation, timeline and exemptions
On April 24, 2025, HM Treasury published a draft of primary legislation and launched a technical consultation that will run until July 3, 2025, inviting detailed feedback on the draft wording rather than on overarching policy. The CBAM is set to take effect on January 1 2027, with its first accounting period covering the entire calendar year of 2027.
The CBAM will apply to imports from seven high-risk sectors — aluminium, cement, fertiliser, hydrogen, iron and steel, ceramics and glass, subject to carbon leakage concerns. It is targeted at UK businesses importing GBP 50,000 or more of these specified goods over 12 months.
Exemptions include imported scrap products from the aluminium, iron and steel sectors, recognising their environmental benefit and lower net emissions. Post-2027, the government will keep the “sectoral and product scope of CBAM … under review to reflect the evolving carbon leakage risk and technological context”.
CBAM charges will be based on both direct (Scope 1) and indirect (Scope 2) emissions, which importers can report using actual data or accept default emission values determined by the UK government.
Events
e-Magazines
Reports
Responses
