UK provides illustrative CBAM rate for cement

The UK Carbon Border Adjustment Mechanism (CBAM) is designed to address the risk of carbon leakage as the UK decarbonises its economy. It does this by applying a carbon price to imported goods in covered sectors that reflects the carbon price faced by comparable domestic production.

With the mechanism due to come into force from 1 January, 2027, HMRC has provided CBAM rates.

HMRC has stated that:

"Unlike most taxes, CBAM does not have a single headline rate set out in primary legislation. Instead, the rate is determined using a methodology that combines recent carbon pricing data, sector-level emissions information and the extent to which domestic producers continue to receive free allowances under the UK Emissions Trading Scheme. This methodology is set out in law, via the Finance Act 2026."

The purpose of the illustrative rate is to act as a transparency tool to help businesses understand how UK CBAM rates are determined and provide an indication of the potential scale of future liabilities. The data used to produce these figures is likely to change prior to 1 January 2027.

The figure provided by HMRC for the cement is: £8.78/tCO₂e.

Once the mechanism is in operation, CBAM rates will be updated using the latest available data and published quarterly.

A full explanation of the policy and the calculations used determine how the rates will be calculated is available here.