wrap
UK CBAM policy update: What the new UK CBAM bill means for importers
Steel Product
The UK has taken a major step forward. On 26 November, the government submitted the primary draft of the UK Carbon Border Adjustment Mechanism (UK CBAM) to Parliament as part of the Budget’s Finance (No. 2) Bill.
But what exactly has changed, and what does it mean for UK importers preparing for 2027 compliance? With CBAM expected to apply to high-carbon goods entering the UK, understanding these developments is essential. According to the UK Government’s latest update, several adjustments could significantly affect how businesses calculate obligations and report emissions.
Let’s break down the most important points.
Key updates in the UK CBAM policy draft
Indirect emissions excluded until at least 2029
Indirect emissions will not be included in CBAM calculations until 2029 at the earliest. The government has confirmed this is designed to support the Energy Intensive Industries (EII) Compensation Scheme, mirroring the EU CBAM’s phased approach.
CBAM rates to be aligned with sectoral averages
Free allowance adjustments will be based on sectoral averages, suggesting the potential use of benchmarks similar to those leaked in the EU earlier this month. This would create a more standardised emissions reference point for importers.
Exemption for UK-produced precursor emissions
Precursor emissions generated in the UK will be exempt to prevent double counting, particularly relevant for businesses importing complex goods that include UK-produced components.
Transitory goods will be excluded
Goods not intended for free circulation in the UK market will be exempt, helping businesses avoid double obligations if they also fall under the EU CBAM.
Group treatment provisions removed
Based on industry feedback, the UK plans to remove group treatment rules, as they have shown limited value for obligated organisations.
Three-year limit for repayment claims
Businesses will have three years to submit repayment claims for incorrect CBAM submissions, setting a clear administrative boundary for compliance corrections.
What happens next?
Parliament may still make adjustments before the bill is officially adopted, but the submission of the draft finally provides businesses with long-awaited visibility. Organisations importing steel, aluminium, fertilisers, hydrogen, glass, and cement into the UK should now begin assessing their potential CBAM exposure, evaluating data readiness, and reviewing supply chain emissions.
For a detailed overview of the government publication, visit the UK Government CBAM Policy Update page.
How to prepare for the UK CBAM
To help importers get ahead of their obligations, we’ve created several resources:
-
Learn what CBAM means for your business on our CBAM Compliance page
-
Explore our full CBAM Service offering, including emissions data support
-
Not sure whether you will be in scope? Try our free CBAM Obligation Quiz to get clarity in under two minutes
Summary and next steps
The UK CBAM policy update signals real momentum toward 2027 implementation. With indirect emissions delayed, new benchmark-based adjustments, precursor exemptions, and clearer admin rules, businesses finally have enough insight to begin preparing their data, systems, and reporting processes.
Next Step: Visit our CBAM Compliance page, speak to us about our CBAM Service, or complete our free CBAM Obligation Quiz to understand your exposure and start preparing with confidence.