UK: Carbon border adjustment mechanism (CBAM) emissions regulations
Focusing on how emissions associated with CBAM goods and calculated and verified
HMRC on September 9, 2026, published the Carbon Border Adjustment Mechanism (Emissions and Verification) Regulations 2026, governing how emissions associated with CBAM goods are to be calculated and verified under the UK CBAM regime effective January 1, 2027.
The regulations, which will apply alongside earlier regulations dealing primarily with administration and compliance obligations, focus on the calculation of CBAM liability and introduce detailed rules governing:
- Direct emissions attributable to the production of CBAM goods
- Use of actual emissions data
- Default emissions methodologies
- Attribution of emissions to CBAM and precursor goods
- Monitoring periods
- Emissions verification requirements
- Record keeping obligations
In addition, the government issued the Carbon Border Adjustment Mechanism (Interest) (Appointed Day) Order 2026, which applies the existing Finance Act 2009 interest regime to CBAM liabilities with effective January 1, 2027. As a result, the HMRC framework for charging and paying interest on underpayments, overpayments, and late payments will apply to CBAM in the same way as it does to many other taxes.
KPMG observation
While HMRC has now substantially completed the framework for measuring and verifying emissions under the UK CBAM regime, certain practical elements of the regime are still to be published. In particular, the regulations do not 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.
Read a September 2026 report prepared by the KPMG member firm in the UK