What happened?
On 16 October 2026, the UK published default emissions values for its Carbon Border Adjustment Mechanism (CBAM), alongside illustrative sector rates. The mechanism starts on 1 January 2027. The announcement supplies preparation inputs; it does not make the illustrative rates payable.
Key details
Default values express emissions in tonnes of carbon dioxide equivalent per tonne of product. They can be used instead of verified actual emissions. The Treasury says the 2027–28 values use product-level, trade-weighted averages excluding EU data, with a 10% markup except for fertiliser, which has no markup. Country-specific defaults are planned from 2029, when the markup will also be reviewed.
HMRC’s illustrative rates, in pounds per tonne of CO2 equivalent, are £9.69 for iron and steel, £9.79 for aluminium, £8.78 for cement, £1.45 for fertiliser and £9.24 for hydrogen. These are neither forecasts nor final first-quarter 2027 rates. They reflect current carbon-price and free-allocation data that may change. They are not charges per tonne of imported goods.
Who is affected?
UK importers of goods within the covered commodity codes, and their GCC suppliers in aluminium, cement, fertiliser, hydrogen, iron and steel. Sector membership alone does not establish that a particular product is covered. The UK importer’s liability and the supplier’s commercial exposure should be assessed separately.
Effective date / timing
Publication: 16 October 2026. CBAM commencement: 1 January 2027. The published defaults cover 2027 and 2028. Official rates for 1 January–31 March 2027 are due before the end of 2026; subsequent rates will be published quarterly.