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      On 9 April 2026, HMRC published draft regulations on the Carbon Border Adjustment Mechanism (CBAM). This is HMRC’s second UK CBAM consultation of 2026. The first sought views on draft legislation setting out the administrative requirements of this new indirect tax, along with provisions outlining the CBAM rate and carbon price relief (which is available where imported goods have borne certain types of carbon taxation in their countries of origin).

      The new tranche of draft legislation sets out provisions that will govern the calculation of embedded emissions, record-keeping and procedures for monitoring and verifying emissions data. It will therefore be of interest to importers of in-scope goods (from the aluminium, iron and steel, fertiliser, cement and hydrogen sectors) as well as overseas manufacturers of those goods. Anyone in the supply chain importing tonnes of metal widgets, for example, should start taking note now!

      Whilst it will be possible to use default emissions values (yet to be published) for the foreseeable future, many businesses will want to understand and perhaps use the actual values for their goods.

      Although the consultation seeks views on draft secondary legislation, the release also includes tertiary legislation in the form of a draft Force of Law Notice designed to explain how the various pieces of CBAM legislation together form a framework for the management of the tax.

      The consultation is open until 21 May 2026.

      Our message remains that now is the time for businesses to consider how best to incorporate this new indirect tax which relies on:

      • Customs data (in scope goods are identified by CN code);
      • Third party emissions data (or default emissions values); and
      • Reporting through (ultimately) quarterly returns.

      Please speak to the authors or your usual KPMG in the UK contact if you would like to discuss your preparations or any aspect of the new regime which is due to be introduced from 1 January 2027.

      For further information please contact:

       

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