HMRC has published its carbon border adjustment mechanism (CBAM) policy paper, alongside draft secondary legislation, notices, and GOV.UK guidance. Feedback from importers, downstream producers, and overseas operators is invited until 24 March 2026.
The UK’s tax authority (HMRC) has released a policy paper outlining its approach to the carbon border adjustment mechanism (CBAM) on 10 February 2026.
The Carbon Border Adjustment Mechanism (CBAM) legislation and guidance is being developed in the following stages:
1) Primary legislation
Primary legislation for CBAM was introduced in the Finance (No.2) Bill 2025 to 26. You can find the Bill on the UK Parliament website, which also contains the latest versions and associated documents. The legislation is currently subject to Parliamentary scrutiny and may change as a result.
2) Secondary legislation
Draft secondary legislation will be released in two stages The first set was published on 10 February 2026 for a 6-week technical consultation, alongside draft notices which will have force of law. This consultation will close at 11:59pm on 24 March 2026. The second set of draft legislation will be published in Spring 2026 for technical consultation. The government will review all responses and will lay the final secondary legislation later in the year.
The paper provides a summary of CBAM policy and explains how the legislation and guidance are being developed. Published alongside the policy paper are draft secondary legislation, notices, and GOV.UK guidance, on which feedback is requested from stakeholders, including: (i) importers of goods from the aluminium, cement, fertilizers, hydrogen, and iron and steel sectors; (ii) downstream producers using these goods; and (iii) overseas operators.
The consultation on the regulations will close on 24 March 2026, and any responses or inquiries should be submitted via email.
