The EU Carbon Border Adjustment Mechanism (CBAM) came into effect on 1 January 2026. The aim of CBAM is to protect homegrown industries which are subject to decarbonisation policies from imports that are not. Its purpose is to prevent carbon leakage.
If you are exporting from the UK into the EU you will need to understand whether the EU CBAM is relevant and applicable to you.
The UK government has produced guidance for UK exporters into the EU: What do I need to know about selling to Europe
You can also find out more information on the EU legislation and guidance at : CBAM Legislation and Guidance – Taxation and Customs Union
Background
CBAM is effectively a new tax aimed at reducing carbon emissions. It will impact companies exporting products to the EU and specifying products made with aluminium, cement, iron and steel (it is likely to be extended to cover other products such as glass in the future).
CBAM imposes a carbon cost to ensure imports face a comparable carbon price to goods produced domestically. This mechanism is designed to prevent “carbon leakage,” where companies might relocate production to countries with less stringent emissions regulations.