HMRC Publishes Provisional List of Qualifying Overseas Carbon Pricing Schemes

As the UK prepares for the January 1, 2027 rollout of its Carbon Border Adjustment Mechanism (CBAM), HM Revenue & Customs (HMRC) has published a critical provisional list of current qualifying overseas carbon pricing schemes.

This document is designed to provide clarity for UK importers seeking to map out their compliance strategies and financial liabilities. Under the UK CBAM framework, importers can reduce their domestic tax liability by deducting the carbon price already paid in the country of origin (Carbon Price Relief) to prevent double taxation, provided that the overseas scheme meets strict UK legal conditions. However, the amount of relief will depend on the effective carbon price the good was subject to, meaning emissions covered by free allowances or fully covered by rebates will not qualify for relief.

"This list is intended to help importers prepare for the introduction of CBAM by providing clarity on overseas carbon pricing schemes that currently meet the qualifying criteria, as set out in The Carbon Border Adjustment Mechanism (Calculation of CBAM Rate and Determination of Carbon Price Relief) Regulations 2026."

Currently, the recognized Qualifying Carbon Pricing Schemes (QCPS) include major international systems such as:

• The EU Emissions Trading System (EU ETS)

• The Canada Federal Output-Based Pricing System (OBPS)

• The China National Emissions Trading System

• The New Zealand Emissions Trading Scheme (NZ ETS)

• The Taiwan Carbon Fee

By releasing this provisional list, HMRC is enabling businesses to begin engaging with their global supply chains early to verify which imports will be eligible for financial relief.

Importers can find out more and review the complete, continuously updated list of qualifying global schemes here.