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      Following the publication of the registration, administration and carbon price relief regulations earlier this year, HMRC have now released, possibly, the final legislative building blocks governing how emissions associated with Carbon Border Adjustment Mechanism (CBAM) goods are measured, attributed and independently verified. For businesses preparing for UK CBAM, these developments may be among the most significant to date, as they provide the methodology that will ultimately determine the embodied emissions on which future CBAM liabilities are calculated.

      Our earlier article, “From draft to delivery: HMRC confirm the framework for UK CBAM”, examined the July 2026 package of regulations covering registration, returns, record keeping and carbon price relief. The latest release focuses on a different question: how emissions associated with CBAM goods are to be calculated and verified.

      The missing piece of the CBAM framework

      The newly published Carbon Border Adjustment Mechanism (Emissions and Verification) Regulations 2026 (the Regulations), laid before the House of Commons on 9 September 2026, establish the legal framework for determining the emissions embodied in CBAM goods. These regulations will apply alongside the rest of the UK CBAM regime from 1 January 2027.

      Whilst the earlier regulations dealt primarily with administration and compliance obligations, the emissions regulations focus on the calculation itself. They introduce detailed rules governing:

      • Direct emissions attributable to the production of CBAM goods;
      • The use of actual emissions data;
      • Default emissions methodologies;
      • Attribution of emissions to CBAM and precursor goods;
      • Monitoring periods;
      • Emissions verification requirements; and
      • Record keeping obligations.

      The accompanying force-of-law notice provides the practical methodology

      Alongside the Regulations, HMRC have issued a draft emissions and verification force of law notice containing the detailed technical requirements that underpin the legislative framework.

      The notice provides a significantly greater level of detail than the Regulations themselves and includes methodologies for calculating emissions, prescribed emissions factors, default calorific values for fuels, conversion factors, attribution rules and verification requirements. Together with the existing Systems Boundaries Document, these materials provide much-needed clarity regarding HMRC's expectations for emissions calculations and supporting evidence.

      The publication of these materials is particularly important for overseas manufacturers and independent verifiers, who will play a central role in supplying and validating the emissions information that importers will need for UK CBAM compliance.

      Some important details are still awaited

      Whilst HMRC have now substantially completed the framework for measuring and verifying emissions, certain practical elements of the regime are still to be published.

      In particular, neither the Regulations nor the accompanying force-of-law notice appear to contain product-specific or country-specific default embodied emissions values. The Regulations continue to envisage the use of ‘default values’, but those values are to be specified separately through Treasury notices.

      This means that businesses now have a much clearer understanding of how emissions must be calculated, but some of the practical inputs that may be required where actual emissions data is unavailable are still outstanding.

      Interest provisions brought within the CBAM regime

      Alongside the emissions package, the Government has also made the Carbon Border Adjustment Mechanism) (Interest) (Appointed Day) Order 2026. This order applies the existing Finance Act 2009 interest regime to CBAM liabilities with effect from 1 January 2027.

      As a result, the established HMRC framework for charging and paying interest on underpayments, overpayments and late payments will apply to CBAM in the same way as it does for many other taxes.

      What should businesses do now?

      The latest developments mark an important shift in the evolution of UK CBAM. The focus is no longer on understanding the broad policy design of the regime. Instead, businesses should now be turning their attention to the practical challenge of understanding, collecting, validating and retaining emissions data that meets HMRC's requirements. Importers should consider:

      • Engaging with suppliers to understand the availability and quality of emissions data;
      • Reviewing the methodologies contained in the force-of-law notice and Systems Boundaries Document;
      • Assessing the verification arrangements that may be required within supply chains; and
      • Identifying areas where future default emissions values may eventually need to be relied upon.

      With the commencement of UK CBAM on 1 January 2027 now rapidly approaching, HMRC have largely completed the rulebook governing how emissions will be measured and verified. The challenge for businesses is increasingly one of implementation rather than interpretation.

      For further information please contact:

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