Hot Spot UK Draft Primary CBAM Legislation Published for Consultation

What is it?

Last year BVAA advised members of the results of the consultation on the introduction of a UK Carbon Border Adjustment Mechanism in Hot Spot BV002817. This confirmed that the UK Government will be implementing the UK CBAM tax on 1st January 2027. Draft primary legislation which can be found here draft primary legislation, has now been published for technical consultation as the next stage of the implementation process .

This technical consultation seeks to ensure that the primary legislation delivers the policy correctly and effectively and therefore it is important to recognise that it is not a further consultation on the policy design. The consultation is open until 3rd July 2025 and any member’s comments should be emailed to cbampolicyteam@hmrc.gov.uk before midnight on that date.

Why is it Important?

BVAA members with overseas supply chains based outside of Europe are likely to be the hardest hit in terms of UK CBAM related product and administrative costs. The new CBAM tax will apply to all imported products containing specific materials including aluminium, iron and steel with a value of £50,000 per year or more and based on the mass of material used. It is intended to support domestic low carbon manufacturing by preventing carbon leakage that falls outside of the UK Emission Trading Scheme (ETS).

The UK Government has also published a useful CBAM policy update which can be found here Policy Update and provides an overview of the scope and design of CBAM allowing members to better understand how it will impact their business.

The UK Government has committed to providing further detailed guidance in advance of the commencement of the CBAM on 1 January 2027.

Continuous Improvement - Did we miss anything?

Hot Spots are intended to alert members and provide a brief overview of new standards, activities or procedures that are being introduced in the industry. If there is key information missing that would be helpful, please let us know so that we can improve our future service.

Please Note: This Hotspot is for information purposes, and we invite comments from BVAA members only. Please also note that at time of publication ballots may be closed. For more information, please contact the Secretariat.

BVAA Members: Did you know we have a hotspot tab on the BVAA website? Head over to www.bvaa.org.uk/login-here.asp and log into the member only area. You then need to select ‘Hotspots’ for the latest. For information on how to access the member only area of the website please contact jane@bvaa.org.uk.  

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