United Kingdom: CBAM Takes Effect in 2027
The mechanism is designed to reduce the risk of carbon leakage—that is, the relocation of production, and the associated emissions, to countries where climate policies impose lower costs. Imports within scope will therefore face a carbon cost comparable to that borne by UK producers.
Which Products Are Covered by the UK CBAM?
The mechanism will apply to products in five sectors: aluminum, cement, fertilizers, hydrogen, and iron and steel.
Scope will be determined based on the commodity codes of the goods concerned. Certain exclusions and special cases are provided for, including specific types of scrap and, subject to certain conditions, goods entered under temporary admission with full relief from customs duties. The UK has also decided not to include glass and ceramics at the outset, although both sectors had been considered during earlier consultations.
Exporters should therefore verify whether the customs codes of their products fall within the UK CBAM scope.
Who Is Liable?
The UK CBAM is structured as a tax and will be administered by HM Revenue & Customs (HMRC), the UK tax and customs authority.
As a general rule, the importer of the goods concerned is responsible for complying with UK CBAM obligations. Where a customs declaration is required, the importer is the person in whose name the declaration is made or, if the declaration is made on behalf of another person, that person. Where no customs duty is due or no customs declaration is required, the relevant party will instead be the person importing the goods into the UK on its own behalf.
Businesses meeting the applicable conditions will be required to register with HMRC, retain records relating to CBAM imports, file the required returns, and pay the tax due.
For Swiss exporters, not being directly liable for the tax does not mean being unaffected by the mechanism. UK importers will need information on the goods and, in particular, their embodied emissions in order to calculate the amount due correctly.
Particular attention should therefore also be paid to the terms of sale and the allocation of contractual responsibilities. If a Swiss exporter also acts as the importer into the UK—as may occur, for example, under certain Delivered Duty Paid (DDP) arrangements—it will need to assess its own potential obligations under the UK CBAM.
The GBP 50,000 Threshold: How It Works
Under the UK system, CBAM registration becomes mandatory when the value of relevant imported goods reaches the applicable threshold. The registration threshold is set at GBP 50,000 of CBAM goods imported over a 12-month period, but it is not simply an annual limit.
Whether the threshold has been met must be assessed under two separate tests:
- forward-looking test: from January 1, 2027, businesses must assess whether they expect to import CBAM goods worth GBP 50,000 or more during the following 30 days;
- backward-looking test: on the first day of each month, businesses must assess whether the total value of CBAM goods imported during the previous 12 months has reached or exceeded GBP 50,000. During the first year of application, only imports made from January 1, 2027 onward will be taken into account.
If either test is met, registration becomes mandatory.
This is also relevant for Swiss exporters: for registration purposes, the key factor is not the value of an individual shipment but the aggregate value of CBAM goods imported by the same person. Even relatively small shipments may therefore contribute to the threshold being exceeded.
Actual Emissions or Default Values
The CBAM charge will depend on the embodied emissions of the imported goods.
Embodied emissions may be determined using either actual emissions data or default emissions values established by the UK authorities.
Using actual emissions will require data that complies with the prescribed methodologies and, where required, verification by a qualified verifier in accordance with the applicable standards.
This is where the involvement of foreign producers becomes particularly important. A UK importer is unlikely to have the information needed to determine the emissions generated in producing goods purchased in Switzerland and will therefore need to obtain it from the producer and, in certain cases, from upstream operators in the supply chain.
Swiss companies potentially affected should therefore use 2026 to assess what emissions data is available, how it is collected, and whether it can be used in compliance with UK requirements.
How Much Will the UK CBAM Cost?
The CBAM rate will be determined by reference to the UK carbon price under the UK Emissions Trading Scheme (UK ETS).
The calculation will also take into account the free allocation of emissions allowances to UK producers, so that the charge applied to imports reflects the carbon cost effectively borne by domestic production.
CBAM rates will be set by sector and published by the UK government at the beginning of each quarter starting January 1, 2027. An initial illustrative example of how the CBAM rate is calculated is also expected in fall 2026.
The amount of CBAM due on a given import will depend on the applicable sector rate and the embodied emissions attributed to the goods.
What If a Carbon Price Has Already Been Paid Abroad?
The UK system provides for Carbon Price Relief, designed to take into account a carbon price already paid on the embodied emissions of imported goods.
This is particularly relevant for goods originating in countries where a carbon pricing system is already in place. Subject to the applicable conditions, a carbon price already paid in the country of origin may be taken into account when determining the amount due in the UK.
Recognition will not, however, be automatic. Businesses will need to demonstrate that the carbon price was actually paid under a carbon pricing system that meets UK requirements and retain the required supporting documentation. The UK authorities have also established specific procedures for verifying information relating to that carbon price. Swiss companies will therefore need not only to understand the embodied emissions of their products, but also to document any carbon prices already paid along the production chain.
UK CBAM and EU CBAM: Same Objective, Different Rules
For companies exporting to both the European Union and the United Kingdom, one of the most important points is not to treat the two CBAM regimes as a single system.
The underlying objective is similar, but the two mechanisms differ significantly in their design.
The EU system is based on the purchase and surrender of CBAM certificates by the authorized CBAM declarant, while the UK system is designed as a tax administered by HMRC.
The thresholds also differ. In the UK, the relevant measure is the value of CBAM goods, with a GBP 50,000 threshold and the two tests described above. In the EU, following recent simplifications, the de minimis regime is based on a threshold of 50 metric tons of net mass per importer per year, with specific exclusions, including hydrogen and electricity.
There are also differences in product scope, carbon price determination, default values, and administrative procedures.
Work already undertaken for the EU CBAM can certainly provide a useful foundation—particularly in terms of supply chain visibility and emissions data collection—but it does not eliminate the need to assess UK requirements separately.
2027 Is Approaching: Companies Should Prepare Their Data Now
The UK CBAM will take effect on January 1, 2027 and, unlike the European Union, the UK has not provided for a multi-year transitional phase devoted solely to reporting.
The first accounting period will cover the full 2027 calendar year. The first return and related payment will be due by May 31, 2028; from 2028 onward, accounting periods will become quarterly.
Swiss exporters should therefore begin preparing before the mechanism takes effect.
Key areas to consider include:
- the customs codes of products exported to the UK and whether they fall within the CBAM scope;
- who acts as the importer and which obligations will fall on the parties involved;
- the value of the relevant trade flows and whether the GBP 50,000 threshold may be reached;
- the availability of embodied emissions data and the ability to document it in accordance with UK requirements;
- any carbon price already paid and the documentation required to claim the corresponding relief;
- contractual provisions and information-sharing procedures with customers, suppliers, and other supply chain operators.
The UK CBAM is therefore more than a new compliance requirement for UK importers. For Swiss companies affected by the mechanism, it creates a new flow of information across the supply chain and makes it increasingly important to understand and document the carbon footprint of products sold in international markets.
Useful Links
Carbon border adjustment mechanism (CBAM): Policy Summary – GOV.UK
Article originally published on www.cc-ti.ch, August 13, 2026.
