CBAM

🔓Understand what the EU or UK Carbond Border Adjustment Mechanism is.

he Carbon Border Adjustment Mechanism (CBAM) is a trade tool introduced by the European Union to put a fair price on the carbon emitted during the production of carbon-intensive goods entering the EU. 

Designed to encourage cleaner industrial production in non-EU countries and prevent carbon leakage, it requires importers to report embedded emissions and, eventually, purchase CBAM certificates corresponding to the carbon price that would have been paid under the EU Emissions Trading System.

The UK Carbon Border Adjustment Mechanism (UK CBAM) is a regulatory framework—scheduled to take effect on 1 January 2027 and administered by HMRC—that places a carbon tax on specific carbon-intensive imported goods (such as aluminium, cement, fertiliser, hydrogen, and iron and steel). 

It is designed to mirror the UK Emissions Trading Scheme, prevent carbon leakage, and maintain a level playing field for domestic industries.

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