UK Carbon Border Adjustment Mechanism (CBAM) – update and member engagement
CBAM is being introduced to address carbon leakage, ensuring imported goods face a comparable carbon price to those produced domestically. In the UK, CBAM is expected to be introduced from 1 January 2027, with the first reports due in March 2028, covering the 2027 reporting period.
For members operating internationally, it is worth noting that CBAM has already been established in the EU. The EU CBAM Regulation entered into force on 26 March 2024, with its next phase applying from January 2026, following a transitional period beginning in October 2023. LightingEurope has produced a comprehensive guidance document, which sets out the EU approach in detail and may provide useful context for UK implementation.
While the UK approach is expected to broadly align with the EU framework, there will be some important differences and UK-specific nuances. The government has indicated that CBAM will operate as a tax based on imported embodied emissions, calculated using emissions intensity and product weight, and administered by HMRC.
A key difference between the UK and EU approaches is the threshold for compliance. While the EU scheme applies a mass-based threshold of 50 tonnes per year, the UK model instead uses a value-based threshold of £50,000 of in-scope goods over a 12-month period. This reflects a different approach to determining which businesses are captured within scope and may be particularly relevant for members with lower-volume but higher-value imports.
The LIA will be producing UK-specific CBAM guidance for the lighting sector in the coming months. This will include:
- Relevant Harmonised System (HS) or commodity codes and scope implications for lighting products and companies
- Business responsibilities
- Reporting requirements and guidance
- Key timelines and milestones, including the start of the reporting period and subsequent reporting obligations
Members are encouraged to get involved in shaping this work. Our Sustainability Compliance Task Force will be leading on CBAM guidance development.
If you are interested in participating, please contact stuartb@thelia.org.uk to receive further details and updates.
