The Department for Transport (DfT) has announced that from Friday 1 January 2027, businesses importing goods into the UK from the aluminium, cement, fertiliser, hydrogen, and iron and steel sectors will need to keep records to comply with the new UK Carbon Border Adjustment Mechanism (CBAM).
The UK CBAM aims to tackle carbon leakage, helping to achieve net zero by 2050. Its target is to ensure that highly traded, carbon intensive products from jurisdictions outside the UK face a comparable carbon price to that paid by UK manufacturers, so that UK decarbonisation efforts lead to a true reduction in global emissions rather than simply displacing carbon emissions overseas.
The legislation and guidance have been developed in the following stages:
Primary legislation - introduced in the Finance Act 2026.
Secondary legislation - released in 2 stages. The first set of draft legislation was published on Tuesday 10 February 2026 for a 6-week technical consultation, alongside draft notices which will have force of law, which closed on Tuesday 24 March 2026. The second set was published on Thursday 9 April 2026 for a 6-week technical consultation, which included a System Boundaries Document and force of law notice, and closed on Thursday 21 May 2026.
To help businesses prepare, HMRC has published new guidance on GOV.UK which enables them to understand new record keeping obligations and to check whether they may need to register.
Further guidance will be published by the government ahead of the introduction of the tax.