Importing from China or the EU? Part of your UK CBAM bill may already be paid

On 27 August 2026 HMRC published something most importers will never notice and should: the first official list of overseas carbon pricing schemes that count against the UK's carbon border tax. Sixteen schemes are on it. Two of them — the EU Emissions Trading System and China's national ETS — cover the origins that dominate UK imports of steel and aluminium. If that's you, a slice of your 2027 CBAM bill may already have been paid at the mill, and the UK will give you credit for it. But only with evidence, and only evidence you start collecting now.

The mechanism, in one paragraph

UK CBAM charges you for the carbon embodied in what you import. Where that carbon was already priced where the goods were made — under an emissions trading scheme, a carbon tax, or an import carbon levy that meets HMRC's criteria — the charge is reduced by the effective carbon price actually paid, capped at your liability. It never goes negative, it never turns into a refund; it stops you paying twice. The mechanics are settled law: Finance Act 2026 section 150 and the Calculation of CBAM Rate and Determination of Carbon Price Relief Regulations 2026, made on 13 July.

The official list

The list published on 27 August recognises, as of an assessment date of 19 June 2026:

Australia's Safeguard Mechanism · Canada's federal Output-Based Pricing System · Chile's carbon tax · China's national ETS · the EU ETS · India's Carbon Credit Trading Scheme · Japan's GX-ETS · Kazakhstan's ETS · Korea's K-ETS · Montenegro's ETS · New Zealand's ETS · Serbia's carbon tax · Singapore's carbon tax · South Africa's carbon tax · the Swiss ETS · Taiwan's carbon fee.

Three things the guidance says about its own list that matter more than the names:

1. It is provisional. HMRC says it will be updated "in due course" as more schemes are assessed. A listed scheme that stops meeting the criteria after 19 June 2026 drops out.
2. It is not exhaustive. A scheme that meets the criteria but isn't listed can still qualify — you can put evidence to HMRC's CBAM policy team.
3. Listed does not mean refunded. Relief follows the effective price. Emissions covered by free allowances carry no effective price, and any rebate or refund reduces the relief. In some cases the relief is nil.

That third point is the whole game for steel and aluminium, so it gets its own section.

Why "effective price" is the number that decides everything

Both the EU ETS and China's ETS hand out free allowances to heavy industry. A European steelmaker inside the EU ETS does not pay the headline allowance price on every tonne it emits — a large share of its emissions are covered by allocation it received for nothing. The effective price it paid is the headline price on the uncovered share only. China's ETS has historically allocated the great majority of allowances free, so effective prices there can be small. Free allocation is being phased down on both sides, which means the effective price — and your relief — rises year on year.

The practical consequence: you cannot work out your relief from a market price chart. Only the supplier's installation knows what was actually paid on which tonnes, and only an independent verifier can attest to it in the form HMRC accepts. That form exists: the Carbon Pricing Verification Form, published 13 July as an annex to the force-of-law notice.

What it's worth — an honest illustration

Say you import 100 tonnes of hot-rolled coil at 2.0 tonnes of CO₂e per tonne — 200 tCO₂e embodied. At our labelled scenario rate of £49.25/tCO₂e (no official rate exists yet; the Treasury's illustrative rate is promised for this autumn) the gross charge is £9,850.

• Supplier evidences an effective carbon price of £20/tCO₂e actually paid → relief £4,000 → you pay £5,850.
• Supplier evidences £5/tCO₂e (heavy free allocation) → relief £1,000 → you pay £8,850.
• Supplier evidences an effective price at or above the UK rate → relief caps at the liability → you pay nothing on those goods.
• Supplier can't or won't complete the verification form → relief £0 — you pay the full £9,850, however much carbon price was really paid.

The spread between those lines is not about the goods, the origin or the market. It is about a form.

The evidence, and why it's a 2027 job not a 2028 one

Your first UK CBAM return — covering all of 2027 — is due 31 May 2028. It's tempting to treat relief as a filing-time exercise. Three reasons it isn't:

• Verifiers are the bottleneck. The form needs an accredited independent verifier to attest to the supplier's installation data. Every importer in every carbon-border regime is chasing the same small pool.
• Suppliers don't volunteer this. Most mills have no idea their UK customers can claim it, and no incentive to spend money on a verifier unless you ask — and explain that it keeps their goods competitive against suppliers who can't evidence a price.
• Records are a statutory duty. HMRC's July guidance requires you to keep the records behind every claim for six years. Evidence assembled retrospectively in spring 2028 is evidence you didn't have when the liability arose.

So the sequence is: ask now, get the form completed during the 2027 monitoring year, keep it with the import records, claim in May 2028.

What to do this week

1. Sort your imports by origin. Anything from an EU member state, China, India, Korea, Japan, Switzerland or the other listed jurisdictions is a candidate. Our liability preview will do this from your customs ledger in seconds, and if you add a "carbon price paid" column it computes the relief per line, capped the way the regulations cap it.
2. Ask the supplier three questions — which scheme covers the installation, what effective price was actually paid after free allocation and rebates, and whether they'll have HMRC's verification form completed. There's a ready-to-send version on our carbon price relief page, with the checker and the full list.
3. Fold it into the emissions-data ask. You should already be collecting verified supplier emissions data for 2027 (it's usually the biggest lever on the bill). The carbon-price question is the same conversation with the same people — have it once.

A note on the EU and the linkage talks

The UK and EU are negotiating to link their emissions trading systems, and a concluded linkage is expected to create the conditions for each side to exempt the other's goods from its carbon border charge. As of today no agreement has been signed and no exemption is in force: EU-origin goods are chargeable under UK CBAM from 1 January 2027, and relief for EU ETS costs is the route to avoiding double payment. If linkage lands, the picture changes and we will say so the day it does — for now, plan on relief, not exemption.