The United Kingdom’s Carbon Border Adjustment Mechanism will use product-specific default emissions values in 2027 and 2028. The approach is intended to create different carbon-cost benchmarks for imported steel, aluminium, cement, fertilisers and hydrogen. HM Revenue & Customs (HMRC) published a schedule on 16 October 2026 setting out the emissions intensities importers must use when eligible verified actual-emissions data are unavailable.
The methodology is designed to limit commercial advantage from not verifying actual emissions. HMRC states that the gap between a product’s prescribed default value and its verified emissions intensity can influence supplier selection and the pricing of industrial imports. This framework links the availability of verified data to how carbon costs are reflected in import calculations.
Product-specific default benchmarks for covered industrial goods
The initial UK CBAM default values apply to 2027 and 2028. They are derived from EU emissions data that are adjusted to reflect the boundaries of the UK system. The figures are also weighted according to the composition of British imports and calculated excluding goods originating in the European Union.
HMRC has applied a 10% markup across all covered sectors except fertilisers, for which no markup is applied. As a result, the benchmarks differ between products and set distinct starting points for assessing emissions associated with imported goods. The published values include non-alloy aluminium slabs, cement clinker, ordinary Portland cement, anhydrous ammonia, standard high-nitrogen urea and hydrogen.
Non-alloy aluminium slabs are set at 2.058 tCO2e/t. Cement clinker is 1.433 tCO2e/t, while ordinary Portland cement is 1.375 tCO2e/t. Anhydrous ammonia is listed at 2.434 tCO2e/t, and standard high-nitrogen urea at 1.392 tCO2e/t.
Hydrogen has a default value of 28.378 tCO2e/t. The default figures determine the emissions benchmark used when a relevant default-based reporting route applies for individual imports. This means carbon-cost exposure can vary across covered products even before verified data are considered.
Steel defaults differentiated by CN code and production form
Steel defaults are not represented by a single value for the entire sector. Instead, they are differentiated by Combined Nomenclature (CN) code and production form. This design creates a range of default emissions intensities across different steel products.
As a consequence, two commercially substitutable steel products may face different default-based carbon-cost exposures depending on their classifications and applicable emissions values. The distinction can matter for importers comparing offers from suppliers whose actual production emissions may also differ. For steel and aluminium producers, installation-level performance can therefore affect commercial comparisons.
The same commercial relevance applies to fertiliser manufacturers and hydrogen producers when verified emissions intensities fall below the relevant default benchmarks. In such cases, verification can support both regulatory compliance and how suppliers are compared in procurement processes. This links emissions evidence to contract-level decision-making.
Verified actual emissions as an input to commercial comparisons
The UK framework is intended to encourage use of verified actual-emissions data where producers can demonstrate lower carbon intensity than the applicable default value. HMRC’s approach covers lower-emissions steel mills, aluminium smelters, fertiliser plants and hydrogen production facilities. Verification can therefore operate as both a compliance mechanism and a basis for differentiation.
The financial case for obtaining verified data depends on the product concerned, the installation’s emissions performance and the volume exported to the UK. Producers and importers are expected to compare default-based carbon costs with costs associated with establishing and verifying actual emissions. This comparison includes whether additional monitoring, reporting and verification (MRV) expenditure is commercially justified.
The ability to substantiate emissions claims is also relevant to quotations and supply contracts. Supplier offers can be assessed not only against underlying product prices but also against carbon-related costs associated with importing into the UK. This means verified emissions can affect how total landed cost is presented in commercial documentation.
HMRC limits changes after submission of CBAM returns
HMRC states that timing is critical because submitted UK CBAM returns cannot be amended solely to replace a default value with actual-emissions data. Importers must obtain supporting emissions evidence early enough for it to be included when returns are submitted. If monitoring and verification are not completed in time, customers may remain reliant on default values.
This restriction makes access to verified information before reporting deadlines a direct commercial consideration for importers and exporters. Documentation and verification need to be coordinated with reporting schedules rather than treated as a retrospective administrative exercise. The rule affects how quickly verification must be completed relative to submission dates.
Country-specific defaults planned from 2029 for each good and country
The UK intends to introduce country-specific default values from 2029. The plan includes separate values for each covered CBAM good and each country. This would replace the current method based on trade-weighted values derived from EU emissions data adjusted to UK system boundaries.
The change could alter relative exporter positions across national markets under CBAM calculations. Efficient production facilities in countries with higher average emissions could have stronger incentives to demonstrate actual emissions, while more carbon-intensive facilities could lose benefits tied to broader trade-weighted averages. The shift would therefore affect how benchmark-based carbon costs compare across origins.
For exporters including those in Serbia, Turkey and India supplying UK industrial customers, assessments would involve calculating applicable default-based carbon costs first. Exporters would then compare those costs with verified actual-emissions outcomes. Whether potential savings justify MRV and independent verification expenses would depend on product type, installation performance and export volumes.
As implementation progresses, verified emissions data and carbon-adjusted landed-cost calculations are expected to become increasingly relevant for how steel, aluminium, fertilisers and other covered goods compete for British customers. The outcome will vary by product category, installation-level emissions performance and export volumes tied to specific suppliers.