The UK CBAM has moved from draft to law. On 13 July 2026 the Treasury and HMRC made SI 2026/809 — the Carbon Border Adjustment Mechanism (Calculation of CBAM Rate and Determination of Carbon Price Relief) Regulations 2026 — under the now-enacted Finance Act 2026. They were laid before the Commons on 14 July and come into force on 1 January 2027. This is the first tranche of the secondary legislation that turns the policy into an operating tax.
How the UK CBAM rate is calculated
Unlike the EU's certificate market, the UK charges a single rate per sector. The Regulations fix the formula: the rate is derived from the UK Emissions Trading Scheme (ETS) price and the Carbon Price Support, adjusted for the free allowances UK producers receive under the UK ETS. HM Treasury calculates and publishes the rates quarterly from 1 January 2027 — so the actual sector rates are still to come, but the method they will be built from is now set.
Carbon price relief — new, and worth understanding
The other half of SI 2026/809 is carbon price relief: where an explicit carbon price has already been paid on the same goods' emissions abroad — for example under the EU ETS or another overseas carbon scheme — an importer can reduce their UK CBAM liability by that amount, so the same tonne of carbon is not charged twice. To claim it, the overseas price must be verified: HMRC's force-of-law reference document sets out a Carbon Pricing Verification Form, and verifiers must meet the ISO standards for greenhouse-gas verification (ISO/IEC 17029, ISO 14064-3, ISO 14065, ISO 14066).
Live operational guidance
On 16 July HMRC published the practical guidance importers will actually use:
- A registration checker and confirmed CN-code lists for the five sectors, plus which goods do not count toward the £50,000 threshold (private use, UK origin, returned goods, temporary admission).
- Record-keeping: retain CBAM records for at least six years from the end of the accounting period.
- A System Boundaries Document defining which emissions and production processes count for each CBAM good — the same boundaries an installation uses if it reports verified actual emissions.
Still to come: the default values
The one thing not yet published is the single most important number for anyone relying on defaults: the default emission values themselves, one per CBAM good, and the sector rates. HMRC says these come ahead of go-live. When the defaults land, they land here — the UK CBAM overview tracks the rules, the threshold checker tells you if you're in scope, and the UK vs EU comparison shows how the two schemes differ.