UK CBAM 2027: What Importers of Chinese Steel and Aluminium Need to Do
UK CBAM starts on 1 January 2027. Learn which Chinese steel and aluminium imports may be affected, the £50,000 threshold, the records required and the seven actions importers should take before placing 2027 orders.
The UK Carbon Border Adjustment Mechanism — usually called UK CBAM — takes effect on 1 January 2027.
It will place a carbon-related tax on specified imported goods in the aluminium, cement, fertiliser, hydrogen, iron and steel sectors. For UK businesses buying metal products from China, the immediate priorities are to check the correct commodity codes, determine whether the £50,000 registration threshold may be reached and start obtaining the necessary product, weight and manufacturer information.
Not every steel or aluminium product is automatically covered. Liability depends on the exact commodity code, origin, value, weight and circumstances of the import.
Importers should begin preparing before placing 2027 orders. Information about the Chinese manufacturing facility and its emissions may be much harder to obtain after goods have been produced and shipped.
What Is UK CBAM?
UK CBAM is a new tax intended to apply a carbon price to specified carbon-intensive goods manufactured outside the UK.
UK manufacturers in relevant sectors can face carbon costs under the UK Emissions Trading Scheme. CBAM is intended to reduce the risk that production simply moves to countries where equivalent emissions costs do not apply.
It is separate from:
- Ordinary customs duty
- Anti-dumping and countervailing duties
- Import VAT
- Freight and insurance
- Customs-clearance costs
- UK port charges
- Final delivery costs
A product can therefore be subject to existing import charges and a CBAM liability.
UK businesses should include CBAM in their future landed-cost calculations rather than treating it as a replacement for customs duty.
Read the Sauce Asia guide to calculating the complete cost of importing from China to the UK.
When Does UK CBAM Start?
UK CBAM applies to specified goods imported on or after 1 January 2027.
The first accounting period runs from 1 January to 31 December 2027. The first return and payment deadline is scheduled for 31 May 2028.
Registration will not necessarily be available when the tax first begins. HMRC says the registration service will open by 1 January 2028, and businesses liable during the first year will have until 31 January 2028 to register.
This does not mean importers can wait until 2028 before taking action.
Records must be collected for relevant goods imported from 1 January 2027. An importer that delays until the registration service opens may then have to reconstruct a year's commodity codes, weights, origins, values and emissions information.
Which Products Are Covered?
UK CBAM covers specified goods within five sectors:
- Aluminium
- Cement
- Fertiliser
- Hydrogen
- Iron and steel
The product must match an in-scope commodity code published by HMRC. The material description alone is not enough.
Some commodity codes cover basic materials or semi-finished products, while others include particular manufactured items. Certain scrap products are excluded.
UK importers should not assume that:
- Every metal component is covered
- Every fabricated assembly is outside the scheme
- A supplier's HS code is automatically the correct UK commodity code
- A product escapes CBAM because it contains other materials
- CBAM only applies to raw steel or aluminium
Accurate classification may require drawings, material specifications, manufacturing information, dimensions, intended use and photographs.
Check the official HMRC list of goods within the scope of CBAM.
Does CBAM Apply Specifically to China?
CBAM is not a China-specific tariff. It applies to qualifying goods imported from countries outside the UK.
However, it is particularly relevant to UK companies importing Chinese steel, aluminium and fabricated metal products because China is a major manufacturing source for these goods.
Origin matters. CBAM uses the UK's non-preferential rules of origin rather than simply looking at the country from which the shipment was dispatched.
A product shipped through Hong Kong, an EU port or another country does not automatically acquire a new origin. The underlying manufacturing and processing must be considered.
What Is the £50,000 Registration Threshold?
An importer must consider two separate tests from 1 January 2027.
The forward-looking test
Registration is required if the importer expects to import CBAM goods worth £50,000 or more during the next 30 days.
The backward-looking test
On the first day of each month, the importer must check whether it imported CBAM goods worth £50,000 or more during the previous 12 months.
During 2027, the backward-looking calculation only includes qualifying imports from 1 January 2027 onwards.
If both tests apply, liability starts from the earlier date.
The threshold considers the combined value of the importer's qualifying CBAM goods. It is not necessarily a separate £50,000 allowance for each factory, product or shipment.
Businesses should maintain a running record rather than examine each shipment in isolation.
Who Is Responsible for CBAM?
The importer is normally the liable person.
Where customs duty is payable, this is generally the person or organisation named as the importer on the customs declaration — even if a customs broker, freight forwarder or agent submits the declaration.
Appointing someone to handle freight or customs clearance does not automatically transfer the tax responsibility to that service provider.
The importer may appoint a tax agent to submit CBAM returns, but HMRC states that the underlying liability remains with the importer.
Before shipping, confirm:
- Who will appear as the importer
- Whose EORI number will be used
- Who is responsible for the customs declaration
- Who will monitor the £50,000 threshold
- Who will maintain the CBAM records
- Who will obtain the manufacturer's emissions information
- Who will prepare the eventual return
These responsibilities should not be left unresolved until the goods arrive.
What Records Must Importers Keep?
Anyone importing CBAM goods will need records from 1 January 2027.
HMRC's guidance requires information including:
- Eight-digit commodity code
- Commercial description
- Import or tax-point date
- Value
- Net weight
- Country of origin
- Quarter of import during the first accounting period
- Evidence supporting any exemption
- Emissions intensity used
- Evidence of any qualifying overseas carbon price claimed
Records generally need to be retained for six years.
The weight must be the net mass of the CBAM goods, excluding packaging. A gross shipping weight that includes cartons, pallets or crates may not be sufficient.
Relevant evidence could include:
- Import declarations
- Commercial invoices
- Packing lists
- Bills of lading
- Import-entry documents
- Material certificates
- Manufacturer declarations
- Production information
- Verification reports
- Proof of origin
HMRC states that a fixed £500 penalty may apply for failing to keep required records, with separate penalties possible where requested information is not provided.
What Emissions Information Is Needed From the Chinese Factory?
Importers will have two possible ways to report embodied emissions:
- Use verified actual emissions information.
- Use a default emissions value published by the UK Government.
Where actual data is used, the importer will need verified emissions-intensity information from the facility that manufactured or processed the goods.
The information must relate to the relevant product and production process. A broad company sustainability statement or an estimate supplied by a sales representative may not meet the requirements.
Importers considering actual emissions data should start by identifying:
- The legal manufacturer
- The actual production facility
- The production process
- Material inputs and relevant precursor goods
- The reporting period
- Direct emissions connected with production
- Product-specific emissions intensity
- The independent verifier
- The verifier's relevant accreditation
- Any qualifying carbon price already paid
HMRC says further verification guidance and default emissions values will be published before the scheme starts.
Where actual data is unavailable or cannot be supported by the required verification evidence, the importer must use the applicable default value.
Why Supplier Identity Matters
A trading company may arrange an order without manufacturing the goods itself.
If the UK importer asks only the exporter for emissions information, it may receive data that does not identify the plant where the goods were actually produced.
This is a particular risk where:
- A supplier subcontracts production
- Several factories contribute components
- The exporter purchases finished goods from another company
- Different production sites use different energy sources
- The named supplier changes factory during the order
- A fabricated product includes in-scope precursor materials
UK buyers should establish the real manufacturing route before production begins.
Read the Sauce Asia guide to distinguishing a Chinese manufacturer from a trading company and our guidance on verifying a Chinese supplier.
How Could CBAM Affect Import Costs?
The eventual liability will depend on:
- The type of CBAM good
- Net weight
- Emissions intensity
- The applicable sector rate
- Any qualifying overseas carbon price
- Available reliefs
- The date of import
HMRC has not yet published all the default emissions values and information needed to calculate every 2027 liability precisely.
This means a responsible landed-cost estimate should currently include a CBAM contingency rather than an invented fixed percentage.
The commercial risk is not limited to the tax itself. Other possible costs include:
- Obtaining emissions data
- Independent verification
- Customs-classification work
- Tax and compliance advice
- Additional supplier administration
- Changing to a lower-emissions manufacturer
- Delays caused by missing information
- Maintaining detailed import records
Two Chinese factories offering the same basic price may produce different final costs if one can provide reliable verified data and the other cannot.
Can a Carbon Price Paid in China Reduce the UK Charge?
CBAM may allow Carbon Price Relief where the importer can demonstrate that qualifying carbon pricing has already applied to the embodied emissions.
The claim will require suitable evidence and verification. Importers should not deduct an assumed Chinese carbon price without the required documentation.
HMRC's published material says a carbon-pricing verification form is required for each CBAM good where relief is claimed. It must be completed by an independent and appropriately accredited verifier of the facility that manufactured or processed the product.
Professional tax advice may be needed before relying on any relief.
Seven Actions for UK Importers Before 2027
1. Review your commodity codes
Identify products that could fall within the aluminium, iron or steel scope. Check the eight-digit UK commodity code against HMRC's published list.
2. Forecast the value of affected imports
Review planned orders for 2027 and determine whether the combined value could meet the £50,000 forward-looking or backward-looking threshold.
3. Confirm the importer
Check which company will be named on the customs declaration and therefore potentially carry the CBAM responsibility.
4. Identify the actual manufacturer
Obtain the factory's legal identity and manufacturing address. Do not rely solely on the exporter or trading company shown on the commercial invoice.
5. Request technical and emissions information
Ask for material grades, product weights, production processes, facility details and any verified emissions reports already available.
6. Update purchasing documentation
Consider adding appropriate requirements for technical information, manufacturer disclosure and emissions documentation to quotations and purchase agreements.
7. Create a 2027 record system
Record each potentially affected import by commodity code, origin, value, net weight, manufacturer, import date and available emissions evidence.
How Sauce Asia Can Help
Sauce Asia helps UK businesses coordinate manufacturing and importing from China.
For relevant projects, support can include:
- Identifying the actual Chinese manufacturer
- Visiting and assessing factories
- Confirming whether production is subcontracted
- Obtaining product and material specifications
- Coordinating supplier-information requests
- Checking package and product weights
- Managing samples and production
- Conducting quality inspections
- Coordinating freight and customs documentation
- Arranging delivery into the customer's UK warehouse
Sauce Asia does not provide specialist tax advice, make binding customs-classification decisions or act as an accredited carbon verifier.
Our role is to help connect the importer with the actual factory and obtain the accurate manufacturing, product and shipment information that advisers, customs representatives and verifiers may require.
Learn more about our metal-parts sourcing from China, China manufacturing service and China-to-UK shipping, customs-clearance coordination and warehouse delivery.
Frequently Asked Questions
What is UK CBAM?
UK CBAM is a tax on the embodied direct emissions in specified imported goods from the aluminium, cement, fertiliser, hydrogen, iron and steel sectors.
When does UK CBAM begin?
It applies to qualifying imports from 1 January 2027.
Does CBAM apply to every steel or aluminium product from China?
No. The product must fall within an in-scope commodity code. Importers must check the exact code and product description.
What is the CBAM registration threshold?
The threshold is £50,000 of qualifying CBAM goods. Importers must consider expected imports during the next 30 days and qualifying imports during the preceding 12 months.
Is my customs broker responsible for CBAM?
Normally, no. A broker can submit a customs declaration or a tax agent can assist with a return, but the importer remains the liable person.
Can I use emissions figures supplied by the factory?
Actual emissions data requires appropriate verification. An unsupported factory estimate may not be sufficient. Otherwise, the applicable government default value must be used.
Do small importers need to keep records?
Businesses below the registration threshold should still monitor qualifying imports and retain sufficient information to establish whether the threshold has been reached.
Is CBAM included in ordinary customs duty?
No. CBAM is a separate tax and may apply alongside customs duty, trade-remedy duties, import VAT, freight and other landed costs.
Can Sauce Asia calculate my CBAM tax?
Sauce Asia does not provide specialist tax calculations or accredited emissions verification. We can help identify and communicate with the actual Chinese manufacturer and coordinate the technical, manufacturing and shipment information needed by the importer and its professional advisers.
Prepare Your 2027 China Imports
If you import steel, aluminium, fabricated metal products or components from China, check your planned 2027 commodity codes and order values now.
Sauce Asia can help communicate with the Chinese manufacturer, obtain product information, manage production and quality control, and coordinate freight, customs-clearance arrangements and UK warehouse delivery.
Discuss your China manufacturing or import requirement with Sauce Asia.
