UK CBAM from January 2027: What SMEs Importing Steel and Aluminium from China Must Do

Quick answer: The UK Carbon Border Adjustment Mechanism (CBAM) starts on 1 January 2027. It is a new tax on the carbon emissions embodied in certain imported aluminium, cement, fertiliser, hydrogen, and iron and steel goods. Every business importing these goods must keep records from that date. You only register and pay if your CBAM goods reach £50,000 or more over a rolling 12 months (or you expect to import that much within 30 days). Registration opens on 1 January 2028. If you buy steel or aluminium products from China, check your commodity codes and ask your factory for emissions data now.

Plenty of UK SMEs buy steel and aluminium from China without thinking of themselves as metal importers. Shelving, fixings, tubing, profiles, sheet and building products can all fall into the sectors CBAM covers. This guide explains who is affected, how the £50,000 threshold works, what records to keep and what to ask your Chinese supplier before your 2027 orders ship.

What is UK CBAM?

CBAM puts a carbon price on imports of carbon intensive goods, so they face a cost similar to goods made in the UK under the UK Emissions Trading Scheme. HMRC runs the tax. The rate is set by reference to UK carbon pricing, and the amount due depends on the emissions embodied in the goods you import. You can use verified emissions data from the producer or a default value. If a carbon price has already been paid on the goods abroad and you hold the right evidence, your liability can be reduced.

The official overview is on GOV.UK: Prepare for the Carbon Border Adjustment Mechanism. For how other border measures affect your costs, our guide to anti-dumping duties and landed cost is a useful companion.

Which goods are covered?

CBAM applies from 1 January 2027 to specified goods in five sectors:

• aluminium
• cement
• fertiliser
• hydrogen
• iron and steel

The exact scope is set by commodity code, so the code on your customs declaration decides whether a product is a CBAM good. For many SMEs the relevant lines are basic iron, steel and aluminium products and some simple articles made from them. A finished consumer product that happens to contain metal is not automatically in scope. Check each code against HMRC's list rather than guessing from the product name. Our guide to UK import duty from China explains how commodity codes drive what you pay.

Steel buyers should also watch trade remedies. Our article on UK steel anti-dumping measures covers duties that can apply on top of CBAM.

How does the £50,000 threshold work?

HMRC uses two tests. You must register if either applies:

1. Looking back: on the first day of each month from 1 January 2027, add up the value of CBAM goods you imported in the previous 12 months. If the total is £50,000 or more, you may be liable from the date you hit the threshold.
2. Looking forward: if you expect to import CBAM goods worth £50,000 or more within the next 30 days, you are liable from that point.

If both apply, the earlier date counts. Imports before 1 January 2027 do not count towards the total. HMRC explains the dates and gives worked examples in Work out the date you will need to register for CBAM.

HMRC expects most affected importers, including most SMEs, to fall below the threshold. Falling below it does not remove every duty, though. You still need records to show you are not liable.

What should UK SMEs do before January 2027?

1. List your metal and building lines. Pull every product with steel, iron or aluminium content and its commodity code from your last 12 months of imports.
2. Check codes against the CBAM list. Mark which lines are CBAM goods. If a code is unclear, ask your customs agent or forwarder before the next shipment.
3. Total the value. Estimate your 2027 import value of CBAM goods by month, so you can see if or when you will cross £50,000.
4. Ask suppliers for emissions data. Request the producer's name, plant location and embodied emissions per tonne for each product. Without verified data, default values may make the tax higher.
5. Set up record keeping. Keep customs declarations, invoices, commodity codes, weights and any emissions evidence together, by order, from 1 January 2027.
6. Price it in. Add a CBAM estimate to your landed cost for affected lines, alongside duty, VAT and freight.

What to ask your Chinese supplier

Many Chinese trading companies will not know the answers. That is a warning sign in itself. Ask:

• Which mill or smelter produces the steel or aluminium, and where is the plant?
• Can the producer share embodied emissions data for this product, and has it been verified?
• Has any carbon price been paid on these goods in China, and is there evidence?
• Will the materials or mill change between sample and bulk orders?

If your current supplier is a middleman with no link to the mill, it may be time to find a supplier in China that can trace its materials. Our quality control and factory audits team can visit factories, confirm the producer and collect documents before goods ship.

Who is most likely to be affected?

• Builders' merchants and contractors importing steel and aluminium products. See our page on building and construction materials import.
• Shopfitting, display and racking brands using steel tube and sheet.
• Brands buying aluminium profiles, panels or sheet for their own manufacturing in the UK.
• Any business whose import mix of these goods is close to £50,000 a year.

For the wider picture on 2026 and 2027 changes, read HMRC tariff changes for UK SMEs and our overview of importing products from China to the UK.

Common mistakes

• Assuming CBAM only affects large steel importers.
• Forgetting the forward looking test when placing one large order.
• Not keeping records because you expect to stay under the threshold.
• Accepting a supplier's estimate with no producer name or evidence behind it.
• Leaving CBAM out of your landed cost and margins for 2027.

Frequently asked questions

When does UK CBAM start?

CBAM applies to imports from 1 January 2027. Registration with HMRC opens on 1 January 2028.

Do I need to register if I import less than £50,000 of CBAM goods?

No, not if you stay below £50,000 in any rolling 12 month period and do not expect to import that much within 30 days. You still need to keep records to show you are not liable.

Does CBAM apply to all products made of steel?

No. It applies to specified goods listed by commodity code. Check each code you import against HMRC's guidance.

Who pays CBAM, me or my supplier?

The person responsible for importing the goods into the UK for commercial purposes is liable. If that is your business, the tax and the paperwork are yours.

Can emissions data from my factory lower the bill?

It can. Verified data from the producer may be lower than a default value, and a carbon price already paid abroad can reduce your liability if you hold the evidence.

Can Epic help me prepare?

Yes. We can check which suppliers make your goods, request emissions data and build CBAM into your landed cost. You can book a free chat to talk through your products.