HMRC Publishes Guidance on Calculating and Reporting Emissions Intensity for UK CBAM

HM Revenue & Customs (HMRC) has released specific guidance explaining how UK importers (liable persons) must determine and report the emissions intensity of their imported goods under the UK Carbon Border Adjustment Mechanism (CBAM).

The tax paid under the UK CBAM is based on the "embodied emissions" of the imported good. The guidance clarifies that embodied emissions are calculated by multiplying the weight of the imported good by either its actual emissions intensity or the government-published default emission value. This measurement is expressed in tonnes of carbon dioxide equivalent produced (tCO2e).

When choosing to use actual verified emissions rather than default values, importers must obtain a verification report from an eligible verifier that clearly states the emissions intensity and the calendar year monitoring period it relates to.

HMRC has established specific rules for linking this actual emissions intensity to the date of importation:

• For goods imported in 2027: Importers should request the most recently verified emissions intensity for the 2027 calendar year (January 1 to December 31) from their supplier. If 2027 data is unavailable, importers are permitted to use verified emissions intensity data from the previous calendar year. For example, a good imported on June 25, 2027, will use the 2027 emissions intensity when filing the first return from May 31, 2028.

• For goods imported from 2028 onwards: Importers can ask their supplier for the most recently verified emissions intensity from either of the two calendar years immediately preceding the year of import. For example, if a good is imported in June 2029, the importer must use the verified emission intensity from either the 2028 or 2027 calendar year monitoring periods, depending on what the supplier has available.