Key points at a glance
- The UK CBAM takes effect on 1 January 2027 and places obligations on UK importers, not EU exporters. In practice, EU exporters will often need to provide the emissions data on which their customer’s CBAM costs depend.
- If no verified emissions data is available, the importer may have to use default values. These are designed so that liable persons do not gain an advantage from using defaults instead of actual emissions data.
- EU goods may benefit from Carbon Price Relief where a carbon price has already been paid under a qualifying scheme, such as the EU Emissions Trading System.
- A planned linkage between the UK and EU emissions trading systems could create conditions for mutual CBAM exemptions in the future. Until this is agreed and implemented, EU exporters should prepare as if UK CBAM applies.
What is the UK CBAM and how does it differ from the EU CBAM?
The UK CBAM, or Carbon Border Adjustment Mechanism, is the United Kingdom’s carbon border adjustment mechanism. It is scheduled to apply from 1 January 2027 and covers selected imports from the aluminium, cement, fertiliser, hydrogen, iron and steel sectors.
Electricity, glass and ceramics are not included in the UK CBAM scope from January 2027. Indirect emissions are also not expected to be included before 2029 at the earliest.
The most important difference from the EU system is how the mechanism works:
- The EU CBAM operates through the purchase and surrender of CBAM certificates.
- The UK CBAM is structured as a tax that importers settle with the UK tax authority, HMRC.
Both systems are built around the same basic principle: the embedded emissions in imported goods are priced. If reliable emissions data is not available, default values are used.
Are EU exporters obligated under the UK CBAM?
No. The legal obligation to register, report and pay rests with the UK importer, not the EU exporter.
In practice, however, EU exporters become a crucial link in the process. Your UK customer needs reliable emissions data for your products to calculate their CBAM liability correctly. If you can provide this data, their liability remains more predictable. If you cannot, they may have to rely on default values.
This changes the competitive landscape. Suppliers with a solid data foundation become more attractive to UK buyers. Suppliers without data may become more expensive and easier to replace.
How is the CBAM liability calculated and why does your data quality matter?
For each shipment, the UK importer reports information such as the commodity code, weight, embedded emissions and country of origin. The CBAM rate is based on the UK carbon price, adjusted for free allowances.
There are two approaches to emissions data:
- Actual values supported by the required evidence, or
- Government-set default values.
This is where exporters have direct influence. The more reliable and usable your data is, the easier it is for your customer to calculate and manage their CBAM liability.
There is also a potential advantage for EU goods. Through Carbon Price Relief, a COâ‚‚ price already paid under a qualifying overseas carbon pricing scheme, such as the EU Emissions Trading System, may be offset against the UK CBAM liability.
This can reduce or, in some cases, fully offset the UK CBAM liability and helps avoid double carbon pricing. The prerequisite is that the carbon price paid is properly documented. The UK importer’s reporting obligation remains in place.
When does the UK CBAM take effect and what is the threshold?
Registration and reporting obligations rest with the importer, but the timeline determines when UK customers are likely to request data from their EU suppliers.
The minimum registration threshold is GBP 50,000 of CBAM goods imported into the UK over the relevant period. Below this threshold, there is no registration requirement for the UK importer.
Key dates
| Date | What applies for UK importers |
| 1 January 2027 | UK CBAM takes effect and the first reporting period begins |
| 31 January 2028 | Registration deadline for importers who meet the threshold in 2027 |
| 31 May 2028 | First UK CBAM declaration and payment for the 2027 reporting period |
| From 2028 | Quarterly reporting begins |
For EU exporters, the message is clear: customer data requests may start well before the first UK declaration is due. Companies that prepare emissions data early will be easier to work with.
How should EU exporters prepare?
Five steps will put exporters on stronger ground.
1. Provide emissions data in a structured format:
Keep product-specific emissions values in a standardised, shareable format that UK customers can use directly.
2. Establish data transfer processes
Set up a reliable recurring workflow for data sharing. Do not rely on case-by-case handling once customer requests start increasing.
3. Work closely with UK importers
Clarify early which data points, formats and deadlines your customer needs, and coordinate with them around their CBAM obligations.
4. Adjust pricing and contract structures
Specify in contracts who bears CBAM-related costs and how data delivery, timing and liability are handled.
5. Assess affected products strategically
Determine which export items are actually subject to UK CBAM and where stronger data quality could create a competitive advantage.
The key to success is not the reporting itself, since that sits with the UK importer. For EU exporters, the priority is data quality and process reliability.
What does the planned EU-UK linkage mean?
The EU and the United Kingdom are negotiating a linkage between their emissions trading systems. If such an agreement is reached and implemented, it could create the conditions for mutual CBAM exemptions.
In practice, this could mean that the UK CBAM would not apply to goods of EU origin, and the EU CBAM would not apply to goods of UK origin. However, this depends on the final agreement and implementation.
Until then, EU exporters should plan as if the UK CBAM applies in full and monitor developments closely.
Conclusion
The UK CBAM does not directly oblige EU exporters to register, report or pay. It does, however, place them at the centre of the data process. The cost of goods for British customers and the ability to remain competitive in the UK market will depend heavily on the quality of emissions data.
Companies that establish data and processes early can turn a customer requirement into a competitive advantage.
Gerlach supports exporters with customs documentation, export processes and the customs interface around foreign carbon border requirements.
Get in touch if you want to review your UK export setup and prepare for UK CBAM requirements.
