The United Kingdom’s Carbon Border Adjustment Mechanism will use product-specific default emissions values in 2027 and 2028, creating different carbon-cost benchmarks for imported steel, aluminium, cement, fertilisers and hydrogen. The schedule published by HM Revenue & Customs (HMRC) on 16 October 2026 establishes the emissions intensities that importers must use when eligible verified actual-emissions data are unavailable.
The methodology is designed to prevent importers from gaining a commercial advantage by avoiding the verification of actual emissions. As a result, the difference between a product’s prescribed default value and its verified emissions intensity can become a factor in supplier selection and the pricing of industrial imports.
Product-specific benchmarks establish different carbon-cost exposures
The initial UK CBAM default values cover 2027 and 2028. They are derived from EU emissions data adjusted to reflect the boundaries of the UK system, 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. The resulting benchmarks vary considerably between products and establish different starting points for assessing the emissions associated with imported goods.
The published values include:
- Non-alloy aluminium slabs: 2.058 tonnes of CO₂ equivalent per tonne (tCO₂e/t).
- Cement clinker: 1.433 tCO₂e/t.
- Ordinary Portland cement: 1.375 tCO₂e/t.
- Anhydrous ammonia: 2.434 tCO₂e/t.
- Standard high-nitrogen urea: 1.392 tCO₂e/t.
- Hydrogen: 28.378 tCO₂e/t.
These figures demonstrate the differences in default emissions intensity across the covered industrial products. The values applicable to individual imports determine the emissions benchmark used when the relevant default-based reporting route applies.
Steel emissions benchmarks vary by product classification
Steel defaults are differentiated by Combined Nomenclature (CN) code and production form, rather than being represented by a single figure for the entire sector. This approach creates a range of default emissions intensities across different steel products.
Consequently, two commercially substitutable products may carry different default-based carbon-cost exposures depending on their classifications and applicable emissions values. The distinction is relevant to importers comparing offers from suppliers whose actual production emissions may also differ.
For steel and aluminium producers, the ability to demonstrate the emissions performance of a specific installation can therefore affect the commercial comparison between competing suppliers. The same consideration applies to fertiliser manufacturers and hydrogen producers whose verified emissions intensities fall below the relevant default benchmarks.
Verified actual emissions become a commercial differentiator
The UK framework is intended to favour the use of verified actual-emissions data where producers can demonstrate lower carbon intensity than the applicable default value. For lower-emissions steel mills, aluminium smelters, fertiliser plants and hydrogen production facilities, verification can therefore support commercial differentiation as well as regulatory compliance.
The financial case for obtaining verified data will depend on the product concerned, the installation’s emissions performance and the volume exported to the UK. Producers and importers need to compare the default-based carbon cost with the cost associated with establishing and verifying actual emissions before deciding whether the additional monitoring, reporting and verification (MRV) expenditure is commercially justified.
The ability to substantiate emissions claims is also relevant to quotations and supply contracts. A supplier’s offer can be assessed not only against the underlying steel, aluminium or fertiliser price, but also against the carbon-related costs associated with importing the product into the UK.
HMRC restricts retrospective replacement of default values
The timing of emissions verification is a critical element of the reporting process. HMRC states that a submitted UK CBAM return cannot subsequently be amended solely to replace a default value with actual-emissions data.
Importers must therefore obtain the necessary emissions evidence early enough for it to support the return when submitted. Producers that have not completed the required monitoring and verification in time may leave their UK customers dependent on default values, even if actual installation-level data could eventually demonstrate lower emissions.
This restriction makes the availability of verified data before reporting deadlines a direct commercial consideration. Importers and exporters need to coordinate emissions documentation and verification with their reporting schedules rather than treating the process as a retrospective administrative exercise.
Country-specific defaults planned from 2029
The UK intends to introduce country-specific default values from 2029, with a separate value for each covered CBAM good and country. This would replace the current approach based on trade-weighted values derived from EU emissions data and adjusted to UK system boundaries.
The planned change could alter the relative position of exporters across different national markets. Efficient production facilities in countries with higher average emissions could have a stronger incentive to demonstrate their own actual emissions, while more carbon-intensive facilities could lose the benefit of benchmarks based on broader trade-weighted averages.
For exporters in Serbia, Turkey, India and other countries supplying UK industrial customers, the commercial assessment involves calculating the applicable default-based carbon cost, comparing it with the cost associated with verified actual emissions, and evaluating whether the potential savings justify MRV and independent verification expenses.
The outcome will depend on the product, the emissions performance of the individual installation and the volume of exports. As the UK CBAM moves towards implementation, verified emissions data and carbon-adjusted landed-cost calculations will become increasingly relevant to the terms on which steel, aluminium, fertilisers and other covered goods compete for British customers.
