UK CBAM vs EU CBAM: What Manufacturers Must Do by 2027

The UK Carbon Border Adjustment Mechanism (CBAM) applies to goods imported from 1 January 2027. From that date, importers of aluminium, cement, fertilisers, hydrogen, and iron and steel that meet the £50,000 threshold pay a charge on the emissions embedded in those goods. The EU CBAM has covered the same sectors, plus electricity, in its definitive phase since 1 January 2026, and EU importers start buying CBAM certificates on 1 February 2027.

Manufacturers that import these goods into both markets, or sell to importers in both, fall under both schemes. The two schemes use different thresholds, count different emissions and collect payment on different timetables.

This blog compares the UK CBAM and EU CBAM, lists the products each one covers, and sets out the steps to take before the UK scheme starts.

What is a CBAM?

A CBAM puts a carbon price on the greenhouse gas emissions released when certain goods are produced abroad. The price mirrors what domestic producers pay under an emissions trading system, so imported and locally made goods carry a comparable carbon cost. The aim is to reduce carbon leakage: the risk that production moves to countries with weaker climate rules.

The UK CBAM is tied to the UK Emissions Trading Scheme (UK ETS), and the EU CBAM is tied to the EU Emissions Trading System (EU ETS).

UK CBAM vs EU CBAM: the key differences

The table compares the two schemes side by side, from scope and thresholds to the first payment deadlines.

What the differences mean for manufacturers

Each threshold catches a different group of importers. When it proposed the 50-tonne threshold, the European Commission estimated that it would exempt around 90% of importers while keeping around 99% of embedded emissions in scope. Once an importer goes over 50 tonnes in a year, the obligations apply to all of that year’s imports. Because the UK test is based on value rather than weight, an importer of small volumes of high-value goods, such as aluminium components, can fall below the EU threshold and still exceed the UK one.

For cement and fertiliser importers, the EU charge covers more emissions than the UK charge. Indirect emissions are those from generating the electricity used in production. The EU includes them for these two sectors, while the UK government has said it will not add them before 2029 at the earliest. The same shipment of cement can therefore carry a higher embedded emissions figure under the EU scheme than under the UK one.

The way each price is set affects budgeting and cash flow. The Commission published EU certificate prices of €75.36, €75.28 and €82.32 per tonne of CO₂e for the first three quarters of 2026, and will publish weekly prices from 2027. From 2027, authorised declarants must also hold, at the end of each quarter, certificates covering at least 50% of the emissions embedded in imports since the start of the year. Part of the cost is therefore paid before the annual surrender.

The UK rate is based on the average UK ETS auction price from the previous quarter, reduced to reflect the free allowances UK producers still receive.

Which products does the UK CBAM cover from 2027?

From 1 January 2027, the UK CBAM applies to five sectors. HM Revenue and Customs (HMRC) lists in-scope goods by commodity code, and the list includes many semi-finished and finished metal products as well as raw materials.

Some of these goods are made from other in-scope goods, such as steel tubes made from steel billets. The UK charge counts the emissions of those inputs, known as precursors, as part of the finished good.

Glass and ceramics were first proposed in December 2023 but dropped in October 2024, so they are outside the scope that starts in 2027. The government has said it will keep the sectors and products under review after 2027.

Will the EU CBAM cover more products from 2028?

The EU CBAM adds no new sectors or products in 2027, but its scope could widen from 1 January 2028. In December 2025, the European Commission proposed extending the EU CBAM to around 180 downstream products, with an average steel and/or aluminium content of 79%. The goods under discussion include fasteners, wire, springs and household articles.

The Council agreed its position in June 2026, refining the product list and asking the Commission to review further products every year from 2028. The European Parliament adopted its negotiating position in September 2026, backing a much longer list of 457 products. Negotiations between the Parliament, the Council and the Commission began in autumn 2026, with a deal targeted before the end of the year. Manufacturers selling finished steel or aluminium goods into the EU should check their products against the final list once it is adopted.

Which manufacturers are affected by UK and EU CBAM?

• Importers of in-scope goods into the UK. They register with HMRC, file returns and pay the charge.
• Manufacturers exporting to the UK or the EU. Their customers need installation-level emissions data to calculate the charge, and will request it from suppliers.
• Manufacturers of finished steel and aluminium goods. Their exposure to the EU CBAM could widen from 2028 if the downstream extension is adopted.
• Businesses trading with both markets. They need emissions data and customs records organised so the same supplier figures can be reported under both schemes.

How can manufacturers prepare for CBAM before 2027?

The following eight steps take a manufacturer from product classification to a working compliance process.

1. Classify every imported product. Match each good’s commodity code against HMRC’s sector lists and the EU CBAM goods list, including in-scope inputs inside finished goods.
2. Run both threshold tests. Check import weight against the EU threshold and import value against the UK threshold. The UK test looks back 12 months on the first day of each month, and forward 30 days on any day.
3. Map the supply chain. Identify the installation that produced each in-scope good and each precursor inside it.
4. Request verified emissions data. Ask suppliers for installation-level embedded emissions, checked by an accredited verifier. Without this data, importers must use default values, which do not reflect a specific supplier’s performance. Early requests give suppliers time to arrange verification of their emissions data. In the UK Carbon Data Benchmark 2026, 54% of manufacturers said they need a week or more to get a credible carbon figure to the person who needs it, or cannot currently get one.
5. Gather evidence of carbon prices paid abroad. Both schemes reduce the charge where a carbon price has already been paid in the country of production. UK relief requires a carbon pricing verification form, completed by an independent, accredited verification body.
6. Set up record-keeping before 1 January 2027. HMRC expects importers to keep commodity codes, import values, net mass, customs documents and supplier verification reports for every in-scope import, plus the carbon pricing verification form for any relief claimed.
7. Budget for both charges. Model EU costs using the Commission’s published certificate prices, and model UK costs using recent UK ETS auction prices, since the sector rate starts from that price.
8. Assign one owner per scheme. Name a person responsible for registration, supplier requests, customs data and payments under each scheme.

How Zevero can help

Zevero combines carbon accounting software with in-house sustainability experts, helping manufacturers turn CBAM data requirements into a repeatable measurement process.

• Measure emissions at product level. The product carbon footprint platform calculates emissions across lifecycle stages, providing product-level data to answer customer questionnaires and rules such as CBAM.
• Build a full Scope 1, 2 and 3 inventory. The corporate carbon footprint platform uses an audit-ready methodology aligned with the GHG Protocol and ISO 14064-1.
• Check your readiness. A CBAM readiness consultation reviews your data infrastructure, supplier emissions visibility and reporting workflows.

Book a demo to see how Zevero can support CBAM data readiness.