What is the carbon border adjustment mechanism?
The UK carbon border adjustment mechanism, or CBAM, is a charge on certain imported goods based on the carbon emitted in making them. It starts on 1 January 2027 and covers aluminium, cement, fertiliser, hydrogen, and iron and steel. It aims to make imports face a carbon price similar to UK producers.
UK factories in heavy industry pay for their emissions under the UK Emissions Trading Scheme. Imports from countries with weaker or no carbon pricing do not. This risks carbon leakage, where production moves abroad and global emissions do not fall. CBAM is designed to level the playing field. Steel and cement makers have long warned about cheap, high-carbon imports undercutting them.
The UK CBAM applies to qualifying goods imported from 1 January 2027. The importer is liable and must register if their CBAM imports reach £50,000 over 12 months. The rate is linked to the UK ETS carbon price and adjusted for free allowances that UK producers still receive. Importers can claim relief where a carbon price was already paid abroad. Rates change quarterly.
The European Union is introducing its own CBAM, and the UK system is designed to work alongside it. Supporters say CBAM protects UK industry and jobs while encouraging cleaner production worldwide. Critics warn it adds paperwork, may raise costs for builders and manufacturers, and could cause trade tensions with countries like China and India. Some exporters see it as disguised protectionism.
Who it affects: Importers of steel, cement, aluminium and more
The left generally supports CBAM as a way to protect industry and jobs while cutting emissions.
The right is mixed, welcoming protection for UK steel but wary of extra costs, red tape and climate-driven trade rules.
Britain is split. Now you decide.
In Population Decides you can switch the carbon border adjustment on or off in your Budget and weigh industry, prices and emissions.
Play Population Decides freeCommon questions
When does the UK CBAM start?
It applies to goods imported from 1 January 2027.
Which goods does CBAM cover?
Aluminium, cement, fertiliser, hydrogen, and iron and steel.
Who pays CBAM?
The importer of the goods, once their CBAM imports reach £50,000 a year.