What’s happened with CBAM lately?
Secondary legislation was passed through the Commons in July covering how CBAM will operate in practice in relation to:
administrative provisions
registration requirement
returns, record keeping and retention (six years)
CBAM rate calculations
carbon price relief rules
transitional provisions.
These augmentations mean the operational framework is largely complete, making it easier for businesses to make the necessary arrangements. The framework also covers how emissions will be monitored and verified. However, some industry bodies such as The Aluminium Federation has raised concerns that the guidance is not sufficiently comprehensive.
Furthermore, there is evidence that importers are experiencing variability in data across jurisdictions and liable to change due to other factors. This emphasises the importance of the quality of the evidence and audit trail arising from supply chains.
This is especially true in light of July’s government announcement that:
default values will not simply be global averages
they are expected to be deliberately calibrated so importers do not gain an advantage from using defaults instead of gathering actual emissions data
The upshot of this is businesses which were hoping to rely on default emission values may find themselves paying higher CBAM liabilities than those providing bespoke and fully verified data.
So what does this mean in terms of action?
Q3 & Q4 2026 is a vital time for CBAM activities in the following ways:
Product mapping – identifying the CBAM affected goods, their commodity codes and which business units own those imports. Are you liable to pay CBAM? HMRC has produced guidance to determine if a company is classified as an importer
Supplier data gaps – which supply chain emissions are unavailable or unverifiable?
Contract review – do supplier agreements contain rights to obtain emissions data / carbon pricing details?
Request embedded emissions data and verification evidence from appropriate suppliers
Governance condition check – ensure co-ordination between finance, tax, legal and sustainability departments (& business partners and freight forwarders)
Register with HMRC
January 2027 – going live!
From 1 January CBAM will be introduced, and businesses who import £50,000 or more specified goods from the aluminium, cement, fertiliser, hydrogen, and iron and steel sectors over a 12-month period will be liable for the tax.
From this key date focus should be on:
Finalising emissions calculations
evidence gathering
compliance readiness
calculating and monitoring liabilities
And once operational, the priorities for successful implementation will centre around improving supplier engagement, reducing reliance on default values, validating emissions methodologies, and documenting carbon price relief claims.
The deadline for first returns to be submitted to HMRC along with payment is 31 May 2028, and reporting/payment will shift to a quarterly cycle from this date.
Need more guidance?
Partnering with Edie, Weightmans are holding a 45-minute Masterclass on CBAM and its practical applications, hosted by our Head of ESG Abhay Srivastava and ESG services lead & Partner Simon Colvin.
Further reading:
Preparing for the UK Carbon Border Adjustment Mechanism | Weightmans