What HMRC's Latest Webinar Tells Us About the Road to January 2027

Earlier this week we joined HMRC's CBAM livestream, one of a series of sessions the government has been running as it moves the UK Carbon Border Adjustment Mechanism from policy to law. With the draft secondary legislation currently open for technical consultation — closing 24 March 2026 — and a go-live date of 1 January 2027 now firmly on the horizon, the session was a timely reminder that CBAM is no longer a distant regulatory prospect. It is almost here.

Here is what stood out.

The Legislation Is Moving Fast

For anyone still hoping CBAM might be delayed or watered down, the session offered little comfort. The primary legislation — introduced via the Finance (No.2) Bill — is at its final parliamentary stage and nearing Royal Assent. Draft secondary legislation was published on 10 February 2026 and is out for a six-week technical consultation. A further tranche of secondary legislation is expected in Spring 2026, with GOV.UK guidance following from Summer 2026.

HMRC were clear that this consultation is not an opportunity to revisit the policy design — that ship has sailed. The purpose is purely to check that the legislation delivers what was already agreed. Businesses waiting for a change of direction should be using this time to prepare instead.

Five Sectors, One Clear Message

CBAM will apply to imports of aluminium, cement, fertiliser, hydrogen, and iron and steel from 1 January 2027. The product scope is defined by commodity codes under the UK Tariff, covering both simple goods and those with a limited number of production steps. If you are importing goods in any of these sectors, you need to be checking your commodity codes against HMRC's published annex now.

The sectors were selected on the basis that they are subject to UK ETS carbon pricing, face genuine carbon leakage risk, and are practical to bring within scope. There is no suggestion that scope will narrow before launch.

The £50,000 Threshold Has a Sting in the Tail

Registration is triggered once the value of a business's CBAM imports meets or exceeds £50,000. But the way that threshold works caught the attention of several attendees.

There are two tests running simultaneously. The forward-looking test asks whether, on any given day, the business expects to hit £50,000 worth of CBAM goods in the next 30 days. The backward-looking test asks, on the first day of each month, whether £50,000 has been reached in the previous 12 months. Where both are triggered, liability starts from whichever date is earlier.

In practice, this means businesses cannot simply wait for the threshold to be crossed. They need to be monitoring their import values continuously from day one.

Who Is Actually Liable May Surprise You

One of the more striking points from the session concerned third-party import arrangements. Under CBAM, the liable person is the importer — defined as the person named on the customs declaration, or on whose behalf it is made.

If a freight forwarder, customs agent or haulier acts as the named importer on a declaration, they become the liable person for CBAM — not the business that appointed them. Conversely, if the third party simply moves goods and the appointing business retains all customs obligations, the appointing business remains liable.

This is a detail that could easily be missed in existing commercial arrangements. Businesses should be reviewing their customs agency agreements and import structures now to ensure there is no ambiguity about where CBAM liability sits.

Default Values Are Available, But May Cost You More

Importers have two options for reporting the embodied emissions in their CBAM goods. They can use actual emissions data from their overseas supplier — which must be independently verified — or they can fall back on default values set by HM Treasury for each CBAM good.

Default values will be available and will simplify the administrative process. But they are likely to be set conservatively, meaning businesses whose suppliers have genuinely lower emissions could end up overpaying if they do not invest in collecting verified actual data. The incentive to engage overseas suppliers on emissions reporting is, in other words, a financial one as much as a compliance one.

Carbon Price Relief Is a Real Opportunity — But It Requires Work

Where overseas producers have already paid a qualifying carbon price on the emissions embodied in their goods, the importer can claim Carbon Price Relief (CPR) to reduce their CBAM liability. Qualifying schemes include emissions trading schemes, carbon taxes, and comparable mechanisms administered by governments.

CPR is not automatic. The liable person must determine whether a qualifying scheme applies, calculate the effective carbon price using a prescribed methodology, and meet independent verification requirements. The calculation involves converting the foreign carbon price into sterling using HMRC-published exchange rates. None of this can be done at the last minute — it requires supply chain data that businesses will need to start collecting well in advance of January 2027.

The First Payment Is May 2028 — But Records Start Day One

Year one of CBAM (January to December 2027) will be reported as a single annual return, with the first payment due by 31 May 2028. From 2028, reporting moves to quarterly.

The delayed first payment is a practical concession to help businesses adjust. But it does not mean preparation can wait. Record-keeping obligations begin on 1 January 2027 — the day CBAM goes live. Businesses that have not put the right data collection processes in place before that date will find themselves scrambling to reconstruct information they should have been capturing from the start.

The Bottom Line

Attending HMRC's livestream this week reinforced what those of us who have been tracking CBAM closely have known for some time: this is not a future problem. It is a present one. The legislative framework is essentially settled, the timeline is fixed, and the obligations are real.

For UK importers of CBAM goods, the question is no longer whether to prepare — it is how quickly preparation can get underway. Supply chain engagement, customs arrangement reviews, emissions data collection, and Carbon Price Relief assessment all take time. January 2027 will arrive regardless.

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