.png)
UK CBAM may extend to petrol and diesel
What changed?
On 28 October 2026, HM Treasury and HMRC opened a consultation on adding refinery products to the UK Carbon Border Adjustment Mechanism (CBAM). It closes at 23:59 on 20 January 2027.
UK CBAM starts on 1 January 2027 for aluminium, cement, fertiliser, hydrogen and iron and steel. The government intends to add refinery products, subject to this consultation. It is a proposal. No timeline has been set.
The first list covers petrol, diesel, jet fuel and kerosene, defined by 8-digit commodity codes in heading 2710. Neat biofuels such as ethanol and FAME could initially be excluded. Blended fuels would then need to show the biofuel share evidenced.
Who is affected?
Directly: UK importers of the listed fuels. The importer is the liable person and reports embodied emissions to HMRC.
Indirectly: Overseas refineries, which would need verified monitoring to supply actual emissions data. Downstream fuel buyers are also affected if costs are passed on.
Monitor: Biofuel blenders and hydrogen suppliers. Hydrogen is already in CBAM and could be a precursor good for refinery products.
Why does it matter?
The consultation expects initial liabilities to be modest. The harder issue is proof.
Fuel is traded on wholesale markets. Products are commonly blended with output from other refineries at hubs such as Rotterdam, Amsterdam and Antwerp. An importer may have no contract with the refinery at all.
Actual emissions data depends on identifying the refinery of origin. Existing checks, such as those for Russian-origin oil, establish the country of origin and not necessarily the refinery.
Without that evidence, importers may be left with default values.
The government's stated principle is that defaults must not give an advantage over actual data. Our interpretation is that for traded fuel, defaults could become the norm.
The EU has no default values for refining, so the UK would need new data. Refineries also make many products at once, so emissions must be allocated between them.
The consultation offers three methods, and none is settled.
What should you consider?
Can your contracts and supplier data identify the refinery of origin, or only the country? That decides whether actual emissions are realistic.
Do you import blended fuels? One option would exclude the biofuel share, but only with evidence of the proportion.
Do you want to shape the design? Responses are open until 20 January 2027.
Follow the outcome of this consultation in the UK Customs Watch.
Comments