HMRC: UK CBAM Emissions Intensity Guide Details Reporting Requirements

• UK CBAM tax is based on embodied emissions, calculated using reported emissions intensity.
• Importers must provide HMRC with emissions intensity data for CBAM goods.
• Actual verified emissions require a verification report from an eligible verifier.
• For 2027 imports, obtain verified emissions intensity for that calendar year, or the previous year if unavailable.
• For imports from 2028 onwards, obtain the most recent verified emissions intensity from the two preceding calendar years.

Lawyers and compliance officers advising UK importers of CBAM goods must ensure their clients are aware of these stringent verification report requirements.

Importers bringing Carbon Border Adjustment Mechanism (CBAM) goods into the United Kingdom are required to understand the specific methodology for determining and reporting emissions intensity. This process is crucial because the tax levied under the UK CBAM framework is directly calculated based on the embodied emissions within these imported products. The emissions intensity figure, which must be declared on the CBAM tax return, forms the fundamental basis for this calculation, making accurate reporting paramount for compliance.

Embodied emissions are quantified by multiplying the weight of the imported CBAM good by its corresponding emissions intensity. These emissions are measured in tonnes of carbon dioxide equivalent produced (tCO2e) for the specific good being imported. HMRC mandates that importers furnish this emissions intensity data, enabling the tax authority to accurately compute the embodied emissions when processing the CBAM tax return. Therefore, a clear understanding of the HMRC CBAM emissions intensity guide is essential for all liable persons.

For importers opting to use actual verified emissions data, a formal verification report is a mandatory requirement. This report must be prepared by a verifier who satisfies specific eligibility criteria set by the authorities. While the source does not detail the exact contents of this report or the specific reporting options for emissions intensity, it underscores the necessity of obtaining such a document to substantiate the reported figures. Lawyers and compliance officers advising UK importers of CBAM goods must ensure their clients are aware of these stringent verification report requirements.

Obtaining the necessary data from suppliers is a critical step in this process. For imports occurring in calendar year 2027 (January 1 to December 31), importers must request the most recently verified emissions intensity from their suppliers for that period. Should verified data for 2027 not be available, importers are permitted to seek the verified emissions intensity data from the preceding calendar year. For instance, an import on June 25, 2027, would necessitate requesting emissions intensity data covering January 1, 2027, to December 31, 2027, with this information then used for the first tax return due from May 31, 2028.

The requirements for obtaining supplier data evolve for imports occurring from January 1, 2028, onwards. For these subsequent imports, liable persons must request the most recently verified emissions intensity from either of the two calendar years immediately preceding the import date. This provides a slightly broader window for data collection compared to the initial 2027 period. For example, if a CBAM good is imported on June 25, 2029, the importer would need to obtain the most recent verified emissions intensity available from their supplier, which could relate to either 2027 or 2028 data.

Compliance officers must also guide clients on the broader aspects of the Carbon Border Adjustment Mechanism UK, including identifying which goods fall within the scope of the regulation and the associated record-keeping obligations. Ensuring that suppliers can provide a verification report or a summary of emissions monitored within the relevant periods is crucial for UK CBAM embodied emissions calculation. Adherence to these specific requirements for obtaining verified data from eligible verifiers and understanding the timelines for this information from suppliers is vital to avoid penalties and ensure compliance with new tax obligations.

Lawyers and compliance officers advising UK importers of CBAM goods must understand the specific requirements for calculating and reporting embodied emissions intensity, including the need for verified data from eligible verifiers and the timelines for obtaining this information from suppliers, to ensure compliance with new tax obligations and avoid penalties.

Source: Original reporting via UK government guidance