Importers into the UK now have their first official guide to where an overseas carbon price can lower their liability under the Carbon Border Adjustment Mechanism (CBAM). The government has published a provisional list of 16 qualifying carbon pricing schemes, giving companies a reference point as they prepare for the levy's start in January 2027.
The UK CBAM will apply to imports worth more than £50,000 a year, with the charge linked to the prevailing UK Emissions Trading Scheme (ETS) price. Its purpose is to place imported goods on the same carbon-cost footing as domestic production. Where a comparable price has already been paid abroad, relief prevents double taxation. The amount depends on the price the goods faced, and emissions covered by free allowances are excluded, because no effective carbon price applied to them.
The qualifying list spans emissions trading schemes and carbon taxes across 16 countries, from the EU ETS, China National ETS, and Korea ETS to carbon taxes in Chile, Singapore, and South Africa. It is provisional, drawn from information up to 19 June 2026, and the government expects to add schemes as more meet the criteria.
A parallel step came from HM Revenue & Customs, which published the System Boundaries Document setting out how embedded emissions must be calculated. The 28-page rulebook covers iron and steel, aluminium, cement, fertilisers, and hydrogen, along with downstream products including tubes, pipes, and fasteners, and it lets overseas producers report verified figures in place of conservative defaults. First returns and payments fall due in 2028 for imports from 1 January 2027.
The EU has moved in step. On 24 August 2026 the European Commission published guidance for the verifiers and accreditation bodies that check compliance with its own CBAM, and set out how verifiers gain access to the CBAM Registry from 1 September 2026. The document confirms that verifiers must assess each installation's monitoring plan themselves. “There is nobody approving plans in advance, like there is under the EU ETS,” said UK-based auditing services consultant Andy Procter. For producers selling into either market, the direction is the same: verified installation data and a demonstrable carbon price now determine the cost at the border.