UK CBAM Takes Operational Shape: HMRC Publishes Second Consultation
CBAM Weekly – Issue 91
The UK CBAM framework is acquiring its operational contours
With the second round of consultation on the Carbon Border Adjustment Mechanism (Emissions and Verification) Regulations 2026, HM Treasury and HMRC are filling in the UK CBAM framework where it matters most for the actual levy burden. Following the first, more administrative round in March, the focus now shifts to the methodology for calculating embedded emissions and the rules for independent verification. Nine months before the start date of 1 January 2027, it is becoming clear what data quality, what documentation, and what audit processes UK importers should expect.
Sector-specific system boundaries: Familiar logic, different lines
The draft regulation is accompanied by a dedicated document on system boundaries, which specifies, sector by sector, which process steps are included in the calculation of embedded emissions. Five sectors are covered, as under the EU CBAM: aluminium, cement, fertilisers, hydrogen, and iron and steel. The logic is recognisable; the specific demarcations are not. For companies that have already established their EU CBAM reporting, this means an independent review for each customs tariff number and supplier, to determine whether the existing data basis also meets the UK requirements. The later this review begins, the more pressure builds in supplier communications.
Verification without a dedicated UK accreditation structure
The second pillar of the draft concerns the independent verification of emissions data. The regulations define requirements for verifiers and stipulate that accreditation bodies must be members of the Global Accreditation Cooperation. As under the EU CBAM, verifiers operate directly with manufacturers in third countries, where the emissions originate. Unlike the European model, accreditation under ISO/IEC 17029:2019 and ISO 14065:2020 is sufficient here, which considerably broadens the pool of eligible verification bodies. A separate accreditation procedure specific to the UK CBAM is not envisaged. The more consequential point for importers, however, is this: responsibility for the quality of emissions data remains with the importer, regardless of which verifier is formally involved. The real work lies in internal data management and contractual arrangements with suppliers, not in the selection of the verification body.
What is still missing: The default values
Methodology and verification are now on the table; the sectoral default values for calculating embedded emissions are not. This leaves the most important variable for the actual levy burden unresolved. HM Treasury will publish these values following the consultation process. Companies required to report quarterly and pay levies from 2027 will be working without a reliable calculation basis until then. The parallel with the EU CBAM introduction is clear: UK importers are also starting without firm numbers. Whether the self-determined emissions figure or the UK default value applies will determine the actual cost exposure. For planning purposes, this means working with ranges and structuring data collection so that own values can be reliably documented wherever they fall below the default.
The consultation window closes 21 May
The public consultation runs until 21 May 2026. For companies with relevant UK business, this is the moment to assess their own processes against the UK requirements and raise objections where system boundaries or verification requirements create practical problems. Those with concerns or suggestions for improvement should respond before the deadline.
Outlook
After 21 May, HM Treasury and HMRC will evaluate the responses and prepare the final version of the regulations. The outstanding default values for calculating embedded emissions are the next key milestone and are expected later in the year. Before the mandatory reporting phase begins on 1 January 2027, importers should use the time to align supplier communications with the second regime and, where there is no overlap with the EU CBAM, build a parallel data track.
Support
If you would like to understand how the new UK requirements on system boundaries and verification affect your CBAM data collection, where the UK and European regimes diverge and how a parallel data track can be set up pragmatically, please feel free to reach out at helge@kolum.earth.