The United Kingdom exported 3.3 Mt of CBAM goods to the EU in 2025, mostly steel, aluminium and cement. In the default-value scenario that is an exposure of €342 m in 2026. Two developments could change the picture: the UK’s own CBAM, and a link between the UK and EU emissions trading systems.
The UK CBAM from 1 January 2027
- Sectors: aluminium, cement, fertilisers, hydrogen, and iron and steel. Glass and ceramics, considered earlier, are not in the initial scope, and unlike the EU the UK does not cover electricity.
- Threshold: importers below £50,000 of CBAM goods over twelve months are outside the regime — a value test rather than the EU’s 50-tonne mass test.
- How it is paid: as a tax on the embedded emissions, administered by HMRC, rather than through certificates bought on a platform.
- Rate: linked to the UK ETS carbon price, with reductions for carbon prices paid abroad.
For EU exporters to Britain the UK CBAM matters less than for others, because goods from the EU carry an EU ETS price that can be taken into account.
Linking the two carbon markets
In May 2025 the EU and the UK agreed to work towards linking their emissions trading systems, and in November 2025 the Council authorised negotiations. The EU’s position is that once a linking agreement is in force, CBAM would no longer apply to goods originating in the UK — in the same way that goods from Norway, Iceland, Liechtenstein and Switzerland are outside CBAM. The UK would exempt EU goods from its CBAM in return.
Until a linking agreement actually enters into force, British goods are subject to EU CBAM like any other origin.
Press reports in October 2026 suggested negotiators were close to a deal, but no agreement had been published and it would still need approval on both sides. Whether an exemption could reach back to imports already made in 2026 is not settled. Importers of UK goods should therefore plan for CBAM on 2026 imports and treat an exemption as an upside.
What UK producers should do now
- Prepare verified emissions data anyway: it serves EU customers now and the UK regime from 2027.
- Note that UK ETS allowances paid for the goods are a carbon price effectively paid — relevant for a deduction if no exemption applies.
- Follow the linking negotiations; we will update this article when an agreement is signed.