The UK CBAM, EU ETS and carbon price relief are at the centre of new guidance identifying overseas carbon-pricing schemes that could reduce importers’ liabilities when Britain’s border carbon regime takes effect next year.
HM Revenue & Customs has published a provisional list of 15 qualifying carbon pricing schemes, spanning emissions trading systems, carbon taxes and other mechanisms. The EU Emissions Trading System is among those recognised, alongside schemes covering markets including China, Australia, Japan, South Korea and New Zealand.
The UK CBAM is due to begin on Jan. 1, 2027, covering selected imports from carbon-intensive sectors including steel, aluminium, cement, fertiliser and hydrogen. The government says the mechanism is designed to ensure imported goods face a carbon price comparable with that paid by UK producers.
The recognition of the EU ETS is particularly significant for European trade. The EU’s own CBAM entered its definitive phase in January 2026 and is closely linked to the bloc’s emissions trading system. EU CBAM certificate prices are based on EU ETS allowance prices, while the phase-out of free ETS allowances is being paired with the introduction of CBAM.
Under Britain’s rules, however, relief is tied to the effective carbon price actually paid. Emissions covered by free allowances do not qualify, while rebates and refunds can reduce the relief available. Importers remain responsible for proving eligibility and keeping the required records.
The government stressed that the list is not exhaustive and could expand as additional schemes are assessed.
Read more: UK Denied Temporary EU Carbon Tax Relief Until Carbon Market Link
