The United Kingdom’s Carbon Border Adjustment Mechanism will use product-specific default emissions values for imported steel, aluminium, cement, fertilisers and hydrogen in 2027 and 2028. The emissions intensities that importers must apply when eligible verified actual-emissions data are not available are set out in a schedule published by HM Revenue & Customs (HMRC) on 16 October 2026.
The approach is designed to reduce the scope for commercial advantage from not verifying actual emissions. Under the UK methodology, the gap between a product’s prescribed default value and its verified emissions intensity can influence supplier selection and the pricing of industrial imports.
Product-specific default benchmarks for covered industrial goods
The initial UK CBAM default values cover 2027 and 2028 and are derived from EU emissions data. HMRC adjusts those figures to reflect the boundaries of the UK system, weights them according to the composition of British imports, and calculates them excluding goods originating in the European Union.
HMRC applies a 10% markup across all covered sectors except fertilisers, for which no markup is applied. The resulting benchmarks differ between products and create distinct starting points for assessing emissions associated with imported goods.
The published default emissions intensities include non-alloy aluminium slabs at 2.058 tCO2e/t. Cement clinker is set at 1.433 tCO2e/t, while ordinary Portland cement is 1.375 tCO2e/t.
For fertiliser-related inputs, anhydrous ammonia is listed at 2.434 tCO2e/t, and standard high-nitrogen urea at 1.392 tCO2e/t. Hydrogen is set at 28.378 tCO2e/t.
For individual imports, the applicable value determines the emissions benchmark used when a default-based reporting route applies.
Steel defaults vary by Combined Nomenclature code and production form
UK steel defaults are differentiated by Combined Nomenclature (CN) code and production form rather than using a single figure for the entire sector. This creates a range of default emissions intensities across different steel products.
As a result, two commercially substitutable steel products can face different default-based carbon-cost exposures depending on their classifications and applicable emissions values. The distinction can matter for importers comparing offers from suppliers whose actual production emissions may also differ.
The same installation-level comparison dynamic applies beyond steel. For steel and aluminium producers, demonstrating the emissions performance of a specific installation can affect commercial comparisons between competing suppliers, with similar relevance for fertiliser manufacturers and hydrogen producers where verified emissions fall below the relevant default benchmarks.
Verified actual emissions as a factor in commercial comparison
The UK framework is intended to support the use of verified actual-emissions data when 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 support both regulatory compliance and commercial differentiation.
The financial case for obtaining verified data depends on the product concerned, the installation’s emissions performance, and the volume exported to the UK. Producers and importers are expected to compare default-based carbon costs with the costs of establishing and verifying actual emissions before deciding whether additional monitoring, reporting and verification (MRV) spending is justified.
Emissions substantiation also affects how offers are evaluated in practice. A supplier’s quotation can be assessed not only against underlying steel, aluminium or fertiliser prices but also against carbon-related costs associated with importing into the UK.
HMRC limits changing submitted returns using later verification evidence
HMRC states that a submitted UK CBAM return cannot be amended solely to replace a default value with actual-emissions data. Importers therefore need to obtain supporting evidence early enough for it to be used in the return when it is submitted.
If monitoring and verification are not completed in time, UK customers may remain reliant on default values even if installation-level data could later show lower emissions. This makes access to verified information before reporting deadlines a direct commercial consideration.
Importers and exporters need to coordinate documentation and verification with their reporting schedules rather than treating verification as a retrospective administrative step.
Planned country-specific defaults from 2029
The UK intends to introduce country-specific default values from 2029. Under this plan, there would be a separate value for each covered CBAM good and country, replacing the current method based on trade-weighted values derived from EU emissions data adjusted to UK system boundaries.
The change could shift relative positions among exporters across national markets. Efficient facilities in countries with higher average emissions could have stronger incentives to demonstrate their own actual emissions, while more carbon-intensive facilities could lose benefits linked to broader trade-weighted averages.
For exporters in Serbia, Turkey, India and other countries supplying UK industrial customers, assessments would involve calculating applicable default-based carbon costs, comparing them with costs associated with verified actual emissions, and determining whether potential savings justify MRV and independent verification expenses.
The outcome will depend on product type, installation-level emissions performance, and export volumes. As implementation progresses, verified emissions data and carbon-adjusted landed-cost calculations are expected to become increasingly relevant to how steel, aluminium, fertilisers and other covered goods compete for British customers.