The EU Carbon Border Adjustment Mechanism moved out of its reporting-only transitional period and into its definitive phase on 1 January 2026. Financial obligations now apply. For UK manufacturers selling into the EU, this is no longer a monitoring exercise: emissions data requests from EU customers are already arriving, and the commercial consequences of failing to answer them are real.
This article sets out the current position, the changes that have altered the compliance timeline, and the practical steps UK exporters should be taking now.
What actually changed on 1st January 2026?
CBAM is established by Regulation (EU) 2023/956. From the start of 2026, importers bringing covered goods into the EU must not only report embedded emissions but also purchase and surrender CBAM certificates covering those emissions. The sectors in scope remain cement, iron and steel, aluminium, fertilisers, hydrogen and electricity.
The legal obligation sits with the EU importer, not the UK producer. In practice, that distinction offers UK exporters little protection. Emissions must be calculated at the production installation level, which means the data can only come from the manufacturer. An EU customer who cannot obtain verified figures from a UK supplier must fall back on government default values, and those defaults now carry a deliberate markup, applied where an installation's emissions may exceed the average intensity for its country of origin. The commercial effect is straightforward: poor data makes a UK product more expensive to import.
Has the compliance timeline changed?
Yes, and significantly. Regulation (EU) 2025/2083, adopted under the Omnibus I simplification package and in force from 20 October 2025, amended several of the most consequential dates. Any compliance plan built on the original Regulation should be reviewed.
The key positions are now:
- Certificate sales begin on 1 February 2027, through a common central platform. Importers accrue liability throughout 2026 but cannot purchase certificates against it until the following February. Certificates covering 2026 imports are priced by reference to the quarterly average of 2026 EU ETS allowance prices.
- The first annual CBAM declaration and certificate surrender fall due on 30 September 2027, covering calendar year 2026 imports. The original deadline of 31 May no longer applies.
- A quarterly holding requirement of 50 per cent applies from the first quarter of 2027, reduced from the 80 per cent originally set.
What is the 50-tonne de minimis threshold?
The Omnibus amendment replaced the previous €150-per-consignment exemption with a single mass-based threshold. An importer whose cumulative net mass of CBAM goods does not exceed 50 tonnes in a calendar year is exempt from CBAM obligations entirely. The exemption does not extend to hydrogen or electricity.
The Commission's assessment is that this removes around 90 per cent of importers from scope while retaining coverage of roughly 99 per cent of embedded emissions. UK exporters should note the asymmetry this creates: a small EU distributor may be out of scope, while a large industrial customer buying the same product is not. Scope should be confirmed customer by customer rather than assumed at the product level.
Will UK exporters be exempt from EU CBAM?
Not at present. The UK and EU agreed in May 2025 to work towards linking their emissions trading systems, and the Council adopted a negotiating mandate in November 2025, with formal talks running through 2026. Mutual CBAM exemption is one of the principal objectives of that linkage.
However, the Commission's position has been consistent: an exemption cannot be granted before a linking agreement enters into force, and requests for an interim exemption have been declined. The UK Government has estimated that linkage could spare UK exporters in the order of £800 million in CBAM costs by 2030, on covered exports worth approximately £7 billion.
Until an agreement is concluded and given legal effect, UK-origin goods are treated as any other third-country import. UK ETS costs already borne by the producer may reduce the final liability through the carbon price adjustment, but the reporting obligation remains regardless.
What is coming next?
In December 2025, the Commission published a package of implementing and delegated acts operationalising the definitive phase, alongside a legislative proposal to extend CBAM to approximately 180 steel- and aluminium-intensive downstream products from 1 January 2028. That proposal also targets circumvention, including the treatment of pre-consumer steel and aluminium scrap. It remains subject to the ordinary legislative procedure and is not yet law.
The Commission has further indicated it will assess during 2027 whether to extend CBAM to additional ETS sectors, to downstream cement, fertiliser and hydrogen goods, or to indirect emissions within existing sectors.
How can iCOR support organisations with CBAM readiness?
iCOR helps organisations to reduce reliance on spreadsheets, save time, and feel more confident about legal and operational risk and compliance. The platform includes a self-audit tool that maps applicable environmental, health, and safety legislation into a tailored legal register and allows you to track compliance actions, assign responsibilities, and present your progress. iCOR tracks EU CBAM developments as they happen alongside your statutory SECR and UK ETS duties, flagging what changes and when.
Book a demo here to learn how iCOR can help you with carbon and energy obligations, turning compliance into an integrated and continuous process that is accessible to everyone.