UK businesses importing steel, aluminium, cement, fertiliser, or hydrogen products will face new compliance obligations from 1 January 2027, when record-keeping requirements under the Carbon Border Adjustment Mechanism (CBAM) take effect.
A critical detail is that using a customs broker or freight forwarder does not transfer responsibility. Businesses remain liable even when a third party handles the import declaration.
CBAM is a carbon tax designed to prevent carbon leakage by ensuring imported carbon-intensive goods face a price comparable to domestic production. The mechanism supports the government’s 2050 net zero target.
From 1 January 2027, importers of CBAM goods must maintain related records for six years. Failure to keep adequate records may result in penalties.
Outsourcing imports provides no exemption. A broker, forwarder, haulier, or tax agent may complete paperwork, but the business can still be deemed the importer and bear CBAM duties.
Record-keeping applies regardless of whether a business must later register for the tax. The obligation begins before any payment is due.
Registration opens on 1 January 2028. Businesses must register if CBAM imports exceeded £50,000 in the prior 12 months or are expected to exceed that threshold within 30 days.
The £50,000 threshold captures many small manufacturers, builders’ merchants, fabricators, and construction firms, not only large industrial importers.
Registered businesses must file returns even with no tax due and settle 2027 liabilities by 31 May 2028. Further guidance on rates and emissions verification will follow.
The timeline pressures smaller importers already struggling with sustainability. Recent research shows most SMEs are unfamiliar with basic emissions categories.
CBAM also arrives amid debate over aligning UK carbon pricing with neighbouring schemes, drawing both cost concerns and industry support.
Businesses in the five sectors should confirm whether goods are in scope, determine who qualifies as importer, and prepare records before January 2027. Six years of documentation is required, and non-compliance carries lasting consequences.
