UK CBAM 2027 — What It Is and What Polish Exporters of Steel, Aluminium and Fertilisers Need to Know

What Is UK CBAM and How Does It Differ from EU CBAM

UK CBAM and EU CBAM are two separate mechanisms — they must not be confused. EU CBAM (EU Regulation 2023/956) entered its transition phase on 1 October 2023 and applies to imports into the European Union. UK CBAM is a separate mechanism introduced by the UK Government, applying to imports into Great Britain, independent of EU CBAM. Polish exporters of steel or aluminium may be subject to both mechanisms simultaneously — if they sell both to the UK and to other EU countries. Current legal position (April 2026): UK CBAM was enacted through the Finance Act 2026 and comes into force on 1 January 2027. HMRC implementing regulations are being developed during the 2026 transition period. This article reflects the legal position as at 2026-04-18. Consult a customs broker before taking action.

UK CBAM — Scope of Goods Covered by the Mechanism

Under the Finance Act 2026 (Part 5, Section 143, Schedule 16) the sectors covered by UK CBAM are: (1) iron and steel — selected rolled products, bars, sections, pipes; (2) aluminium — primary and secondary, sheet, strip; (3) cement — Portland clinker and finished cement; (4) mineral fertilisers — ammonia, nitrogen fertilisers, urea; (5) hydrogen — produced from fossil fuels.

Note: ceramics are NOT covered by the enacted UK CBAM (Schedule 16, Finance Act 2026) — unlike earlier HMRC consultation proposals. For Polish exporters the most relevant sectors are: steel (HS Chapters 72–73), aluminium (Chapter 76) and fertilisers (Chapter 31). The precise list of CN/HS codes is being defined by HMRC in implementing regulations to the Finance Act 2026 — check the latest guidance at legislation.gov.uk.

Source: Finance Act 2026, Part 5 — legislation.gov.uk.

How the CBAM Charge Works — Logic and Calculations

UK CBAM is designed to operate as follows: a UK importer purchases CBAM certificates corresponding to the CO₂ embedded in the imported product (embedded carbon), calculated in tonnes of CO₂ equivalent (tCO₂e). The price of a CBAM certificate is intended to match the UK ETS (Emissions Trading Scheme) allowance price — i.e. the price a domestic producer would pay for the same emissions under the emissions trading system.

If the exporter (e.g. a Polish steelworks) can demonstrate that a carbon price was paid in the country of production (e.g. under EU ETS), the price paid is deducted from the UK CBAM liability. This means that Polish companies covered by EU ETS may have a lower UK CBAM liability — provided the carbon price paid is documented.

Note: this logic is provided for under Finance Act 2026 (ss. 149-150) — HMRC implementing details are still being developed. quality_flag: needs_human_verify_cbam_euets_credit_mechanism.

Who UK CBAM Affects — Polish Steel and Aluminium Exporters

UK CBAM will apply to importers in the UK — i.e. entities importing goods from covered sectors into Great Britain. However, in practice its economic burden will fall on Polish exporters, as UK importers will negotiate lower purchase prices or require emissions documentation in order to reduce their CBAM liability. Polish steelworks, rolling mills and fertiliser plants exporting to the UK should now: (1) inventory their embedded carbon in manufactured products, (2) assess whether they are covered by EU ETS and what carbon price they pay, (3) prepare for emissions reporting under the methodology that HMRC will ultimately approve. All reporting requirements are being developed in implementing regulations. This article reflects the legal position as at 2026-04-18. Consult a customs broker before taking action.

UK CBAM Timeline — From Enactment to Implementation

UK CBAM timeline — per Finance Act 2026 and HMRC information:

• 2023–2025: public consultations, mechanism review, collection of industry data
• 2026: Finance Act 2026 enacted — UK CBAM becomes law. Transition period: HMRC defines implementing regulations (Statutory Instruments)
• 1 January 2027: UK CBAM enters into force — UK importers subject to registration obligation and reporting of embedded emissions (Finance Act 2026, s. 158(1))
• 2027+: payment obligations for registered UK importers

Registration threshold: £50,000 total value of CBAM goods imported within 12 months (Schedule 17, Finance Act 2026). Source: Finance Act 2026, Part 5.

Which Polish Companies Should Start Preparing Now

Regardless of the final enactment date of UK CBAM, Polish companies in the following sectors should begin preparations now:

1. Steelworks and rolling mills exporting steel products to the UK (bars, sheet, sections, pipes) — identify HS codes of exported products and calculate embedded emissions.
2. Producers of primary and secondary aluminium — document emissions from electrolysis and smelting processes.
3. Mineral fertiliser plants exporting nitrogen fertilisers, urea or ammonia to the UK — identify N₂O and CO₂ emissions from production.
4. Cement producers — less common export to the UK, but covered by the enacted scope.

Acting now — before CBAM takes full effect — provides an advantage: companies with ready embedded carbon documentation will be able to supply UK importers with data faster and avoid renegotiating contracts under time pressure.

Actions Polish Companies Can Take Now — Preparing for UK CBAM

UK CBAM enters into force on 1 January 2027 (Finance Act 2026) — Polish companies have until the end of 2026 to prepare. Key actions include: an audit of embedded emissions in manufactured products, checking whether the company is covered by EU ETS and what CO₂ price it pays, contacting UK importers to discuss CBAM implications for contracts, and registering with HMRC once the £50,000 import threshold is exceeded. The methodology for calculating emissions is being defined by HMRC in implementing regulations during 2026 — monitor updates at legislation.gov.uk. This article reflects the legal position as at 2026-04-18. Consult a customs broker before taking action.

Embedded Carbon Audit — How to Get Started

Embedded carbon is the CO₂ and other greenhouse gases emitted during the production of a good — counted from raw material extraction to the point the product leaves the facility (scope 1 + part of scope 2). The methodology for calculating embedded carbon for UK CBAM will be specified by HMRC in implementing acts — at the consultation stage HMRC indicated it plans to adopt an approach similar to EU CBAM (Commission Implementing Regulation 2023/1773).

Polish steelworks and aluminium plants already reporting emissions under EU ETS (European Union Emissions Trading Scheme — the system operated by the EC) already hold part of the required documentation. EU ETS registry data may serve as a starting point for calculating embedded carbon for UK CBAM. quality_flag: needs_human_verify_cbam_methodology — HMRC has not yet published binding methodology; we refer to the 2023 consultations.

How to Track UK CBAM Legislative Progress — Where to Find Information

Official UK CBAM information sources worth monitoring regularly:

• gov.uk/guidance/carbon-border-adjustment-mechanism — HMRC's main UK CBAM information page
• gov.uk/government/consultations/uk-carbon-border-adjustment-mechanism — archive of public consultations and government responses
• legislation.gov.uk — the official location for the Act and all Statutory Instruments

Polish perspective: Polish exporters should also monitor EU CBAM progress at taxation-customs.ec.europa.eu — EU CBAM methodology is analogous to UK CBAM and will help prepare for both systems simultaneously.

Easy Clearance monitors UK CBAM developments and keeps clients informed of changes. Contact us if you export steel, aluminium or fertilisers to the UK and wish to assess your CBAM risk.

What the current rules say

UK CBAM (Carbon Border Adjustment Mechanism) was enacted through the Finance Act 2026 and comes into force on 1 January 2027. It covers imports of iron and steel, aluminium, cement, mineral fertilisers and hydrogen into Great Britain (ceramics are NOT covered — contrary to earlier proposals). The mechanism will impose a carbon charge equivalent to the UK ETS price on emissions embedded in imported products. Registration threshold: £50,000 of CBAM goods imported per year. HMRC implementing regulations are being finalised during 2026. Polish exporters should now conduct an embedded carbon audit and plan HMRC registration. This article reflects the legal position as at 2026-04-18. Consult a customs broker before taking action.

FAQ — frequently asked questions

What is UK CBAM and when does it take effect?

UK CBAM (Carbon Border Adjustment Mechanism) is a carbon charge mechanism on imports of selected goods into Great Britain, enacted through the Finance Act 2026. It enters into force on 1 January 2027 (Finance Act 2026, s. 158(1)). HMRC is developing implementing regulations during the 2026 transition period. Source: legislation.gov.uk/ukpga/2026/11/part/5.

Which products does UK CBAM cover?

Sectors covered by UK CBAM (Schedule 16, Finance Act 2026): iron and steel, aluminium, cement, mineral fertilisers and hydrogen. Note: ceramics are NOT covered by the enacted UK CBAM — contrary to earlier consultation proposals. The precise HS code list is being defined by HMRC in implementing regulations. Source: legislation.gov.uk/ukpga/2026/11/schedule/16.

How does UK CBAM differ from EU CBAM?

EU CBAM (EU Regulation 2023/956) applies to imports into the European Union and entered its transition phase on 1 October 2023. UK CBAM is a separate UK Government mechanism applying to imports into Great Britain. Polish exporters of steel or aluminium may be subject to both mechanisms simultaneously — if they sell to both the UK and EU member states.

What should Polish steel and aluminium exporters do now?

Recommended actions: (1) conduct an embedded carbon audit for your manufactured products, (2) check whether you are covered by EU ETS and what CO₂ price you pay, (3) contact UK importers about CBAM implications for your contracts, (4) monitor legislative progress at gov.uk/guidance/carbon-border-adjustment-mechanism.

Will Polish companies covered by EU ETS have a lower UK CBAM liability?

Finance Act 2026 (ss. 149-150) provides for a 'carbon price relief' mechanism — deducting the carbon price paid in the country of production from the UK CBAM liability. HMRC implementing regulations regarding the EU ETS deduction are being developed during 2026. Consult a customs broker once HMRC publishes full guidance.

Official sources

• Carbon Border Adjustment Mechanism — gov.uk HMRC — GOV.UK
• UK CBAM — HMRC public consultation 2023 — GOV.UK
• legislation.gov.uk — developer API — The National Archives
• EU CBAM — EC TAXUD official page — EC TAXUD