On 10 February 2026, HM Revenue & Customs launched a public consultation on draft secondary legislation to support the implementation of the UK Carbon Border Adjustment Mechanism, which is scheduled to take effect from 1 January 2027. The consultation forms a key part of the UK government’s efforts to operationalise the CBAM following the introduction of enabling provisions in the Finance (No. 2) Act 2025–26.
The UK CBAM is intended to address the risk of carbon leakage by ensuring that imported carbon-intensive goods face a carbon cost broadly equivalent to that borne by domestic producers under the UK Emissions Trading Scheme. By doing so, the mechanism aims to protect the competitiveness of UK industry while supporting the country’s net-zero objectives.
The draft regulations focus on the administrative and operational framework of the CBAM rather than the underlying policy design. They set out detailed rules on importer registration, the structure and timing of CBAM returns, payment and reimbursement procedures, record-keeping obligations, and enforcement powers. The legislation also provides technical definitions covering the classification and weighting of CBAM-in-scope goods.
Sectors expected to be covered include aluminium, cement, fertilisers, hydrogen, glass, iron and steel, reflecting areas with high embedded emissions and significant import exposure. UK importers, manufacturers with international supply chains, and overseas producers supplying the UK market are therefore likely to be directly affected by the final regulations.
The consultation seeks stakeholder input on whether the draft provisions are clear, workable, and proportionate, and whether they create unnecessary compliance burdens. Responses will inform refinements to the regulations ahead of implementation.
The UK CBAM is broadly aligned with international developments, including the EU Carbon Border Adjustment Mechanism, signalling a continued move toward carbon-based trade measures across major economies. The consultation on the draft regulations published by HM Revenue & Customs is open until 24 March 2026.
Please refer to the official announcement from HM Revenue & Customs:
Draft regulations: Carbon Border Adjustment Mechanism (CBAM) – GOV.UK