UK CBAM is meant to put a carbon price on imported goods that matches what UK producers face. If your goods have already been charged for their carbon at home, the UK does not want to charge twice. That is what Carbon Price Relief is for. It is also where a supplier abroad can make a real difference to what their UK customer pays.
What the relief is for
HMRC describes the purpose as preventing double taxation while keeping the system honest. If the emissions in an imported good were already priced under a carbon tax or emissions trading scheme in the country of origin, the importer can reduce their UK CBAM bill by the price effectively paid.
Two limits matter straight away. Emissions covered by free allowances do not qualify, because no carbon price was paid on them. And the total relief claimed can never be more than the CBAM liability itself. In some cases there will be no relief at all, for example where all emissions are covered by free allowances or the scheme gives full rebates.
Who claims it, and who holds the key
The importer makes the claim, as part of the CBAM return. But the claim cannot be made without a document that only the producing site can arrange: a carbon pricing verification form. It comes from the factory, plant or facility that made the goods, or from someone else in the supply chain. A separate form is needed for each good, even where one CBAM good goes into making another.
The form must be completed by an independent verifier. HMRC sets the bar fairly high. The verifier must be accredited by a full member of the Global Accreditation Cooperation, independent of the site, the importer and the country running the scheme, and accredited to four ISO standards (ISO/IEC 17029, ISO 14064-3, ISO 14065 and ISO 14066). Without a correctly completed form, no relief can be claimed.
The importer claims the relief, but the supplier holds the evidence. A supplier who can hand over a verified form gives their UK customer something worth real money.
Which schemes count
To qualify, a scheme must be a carbon tax, an emissions trading scheme or a scheme that prices the emissions in imported goods. It must be run by a government or supranational body, be required by law for the sites that make the goods, and publish its rules and headline price. Voluntary schemes and fuel duties do not count.
On 27 August 2026 HMRC published a list of 16 schemes that currently qualify, based on information as at 19 June 2026:
| Australia | Safeguard Mechanism |
| Canada | Federal Output-Based Pricing System |
| Chile | Carbon Tax |
| China | National Emissions Trading System |
| European Union | EU Emissions Trading System |
| India | Carbon Credit Trading Scheme |
| Japan | GX-ETS |
| Kazakhstan | Emissions Trading System |
| South Korea | Emissions Trading System (K-ETS) |
| Montenegro | Emissions Trading Scheme |
| New Zealand | Emissions Trading Scheme |
| Serbia | Carbon Tax |
| Singapore | Carbon Tax |
| South Africa | Carbon Tax |
| Switzerland | Emissions Trading System |
| Taiwan | Carbon Fee |
If your country is not in this table, it does not follow that no relief is possible, but today there is no recognised scheme for you to rely on. Many major exporters of steel, aluminium, cement and fertiliser, including Egypt, Morocco and Nigeria, are not on the list at present.
The list is not exhaustive. If a scheme meets all the criteria but is not listed, it may still qualify, and HMRC invites details of such schemes at cbampolicyteam@hmrc.gov.uk. A scheme that later changes so it no longer fully meets the criteria stops qualifying.
How the relief is worked out
The importer works out an effective carbon price, which is the average price the emissions actually paid across the whole site, then multiplies it by the embodied emissions in the goods. In outline:
- Take the site's total emissions from the verification form, for one of the two calendar years before the year of import.
- Split them by how the scheme treated them: headline price, free allowances, graduated prices or greenhouse gas removals.
- Multiply each portion by its price, using the average of the previous calendar quarter, then add the results.
- Divide by the site's total emissions. Subtract any compensation, refunds or rebates, divided by the same total.
- Convert to sterling using HMRC's published quarterly exchange rates, and round down to two decimal places.
| Site emissions on the verified form | 100,000 tCO2e |
| Priced at the headline price of $15.50 | 60,000 tCO2e = $930,000 |
| Covered by free allowances (price is zero) | 20,000 tCO2e = $0 |
| Greenhouse gas removals at $45.00 | 20,000 tCO2e = $900,000 |
| Effective carbon price ($1,830,000 divided by 100,000) | $18.30 per tCO2e |
This is why the verification form needs more than a single number. Anyone working out the relief needs the split of the site's emissions, not just the total.
What to do now
Make the evidence easy to ask for
- Check whether your country's scheme is on the HMRC list
- Find out what you have paid under it, including any free allowances, rebates or compensation
- Ask your verifier whether they meet HMRC's accreditation conditions, before you pay for work you cannot use
- Keep your site emissions split by scheme element, for each calendar year
Ask early, and keep records
- Ask suppliers in listed countries whether a verified form is available, and for which year
- Plan to collect the scheme's published prices and HMRC's exchange rates each quarter
- Remember that relief is claimed per good, and the importer carries the record keeping
- Do not assume relief will cover the whole charge, since it cannot exceed the liability
Relief and emissions data work together. A verified emissions figure replaces the default value, and a verified carbon price form reduces what is then charged. Suppliers who prepare both give their UK customers the clearest picture of what an import will really cost.
Based on HMRC guidance on GOV.UK: Claiming Carbon Price Relief, Get a carbon pricing verification form, Work out your Carbon Price Relief, and the list of current qualifying carbon pricing schemes (published 27 August 2026). Last checked 22 October 2026. This is general information, not tax advice. Check GOV.UK for the current position.