UK CBAM Legislation: Finance Act 2026 and the 5 Statutory Instruments

UK CBAM legislation consists of one Act of Parliament and 5 statutory instruments: Part 5 of the Finance Act 2026 creates the tax, and SI 2026/802, SI 2026/809, SI 2026/830, SI 2026/994 and SI 2026/995 supply the operating detail. The four sets of regulations come into force on January 1, 2027, the date from which the charge applies to goods imported into the United Kingdom, and SI 2026/994 appoints the same day for interest.

As of October 12, 2026 the framework is substantially complete, not complete. One instrument still awaits approval by the House of Commons, the Treasury has not published default values, and the HMRC notices that carry technical detail are still drafts. This page lists each instrument with its number, the dates it was made and laid, its commencement date and what it determines, then compares the structure with the EU regulation.

General Summary

UK CBAM is a tax created by sections 142 to 158 of the Finance Act 2026 and administered by HMRC, with four sets of regulations made under that Act and one appointed day order made under the Finance Act 2009. The key facts are listed below.

• Primary legislation: Finance Act 2026 (2026 c. 11), Royal Assent March 18, 2026. Part 5 is headed "Carbon border adjustment mechanism".
• Schedules: Schedule 16 (CBAM Goods), Schedule 17 (Administration of CBAM), Schedule 18 (Offences relating to CBAM) and Schedule 19 (Supplementary amendments relating to CBAM).
• Goods covered: five kinds, named in section 143(3): aluminium goods, cement, fertilisers, hydrogen, and iron and steel goods.
• Secondary legislation: SI 2026/802, SI 2026/809, SI 2026/830 and SI 2026/995 under the Finance Act 2026, plus SI 2026/994 under the Finance Act 2009.
• Commencement: Part 5 has effect for goods imported on or after January 1, 2027 (section 158(1)). The four sets of regulations come into force on that day, and SI 2026/994 appoints it as the day from which interest applies.

What Is the Legal Basis for UK CBAM?

The legal basis for UK CBAM is Part 5 of the Finance Act 2026, which opens with section 142(1): "A tax called the carbon border adjustment mechanism ("CBAM") is to be charged in accordance with this Part." Part 5 runs from section 142 to section 158 and is supported by Schedules 16 to 19.

Section 158(1) fixes the start: Part 5 has effect in relation to goods imported into the United Kingdom on or after January 1, 2027. The wider mechanism, from scope to the first return, is explained in the UK CBAM guide.

Section 142(2) divides Part 5 into four blocks, listed below.

1. The charge: sections 143 to 150 and Schedule 16, including exemptions and carbon price relief.
2. Administration and enforcement: section 151 and Schedule 17.
3. Criminal offences: section 152 and Schedule 18.
4. General provision: sections 153 to 158 and Schedule 19.

The Act leaves the technical rules to secondary legislation. Section 157(3) requires regulations under Part 5 to be made by statutory instrument, and section 157(2) lets those regulations refer to notices published by the Treasury or HMRC. The drafts were tested in two technical rounds in 2026, covered in the UK CBAM consultations record.

The UK CBAM Legislative Instruments

Six instruments make up UK CBAM legislation as of October 12, 2026: the Finance Act 2026 and five statutory instruments numbered 802, 809, 830, 994 and 995 in the 2026 series. The table below gives the title, number and dates of each, as recorded on legislation.gov.uk.

The second table shows who made each statutory instrument, under which power, and where it stands in Parliament. Parliamentary dates come from the UK Parliament Statutory Instruments service, checked on October 12, 2026.

Finance Act 2026, Part 5

Part 5 sets every element of the charge that cannot be left to regulations. Section 143(1) charges CBAM "on the emissions embodied in a CBAM good when the good is imported into the United Kingdom", and section 146(1) makes the importer the person liable.

Section 149(1) sets the amount: the sectoral domestic price for the good multiplied by the tonnes of carbon dioxide equivalent embodied in it. The Treasury must calculate and publish that price for each CBAM sector and each quarter under section 149(3). Section 150 allows the charge to be reduced where a carbon price is payable on the same emissions.

Schedule 17 carries the administration. Paragraph 2 requires registration once CBAM goods with an aggregate value of £50,000 or more are imported in 12 months or expected within 30 days. Paragraph 6 sets the standing accounting periods as three-month periods ending in March, June, September and December.

The Rate Calculation Regulations (SI 2026/809)

SI 2026/809 runs to 15 regulations in seven parts and fills in the two steps of the section 149(3) formula. Regulation 3 governs the average ETS price and regulation 4 the adjustment for free allowances. Parts 3 to 6 govern carbon price relief: qualifying schemes, verification, the effective carbon price and conversion into sterling. The UK CBAM rate guide works through the calculation.

This is the only UK CBAM instrument under the made affirmative procedure, which section 157(5) applies to regulations under sections 149(6) and 150(2). Under section 157(10) it ceases to have effect at the end of 28 days beginning with the day it was made unless the House of Commons approves it by resolution. Section 157(13) leaves out of that count any days when Parliament is dissolved or prorogued or the House is adjourned for more than 4 days.

Parliament's records show a Delegated Legislation Committee debate listed for October 12, 2026 and an approval period ending October 20, 2026. A committee debate is not the approval: section 157(10) requires a resolution of the House, and Parliament's records showed none on October 12, 2026.

The Administrative Provisions Regulations (SI 2026/802)

SI 2026/802 runs to 18 regulations in six parts and is made by HMRC alone. Regulation 7 lists the information a person gives when registering, including an EORI number. Regulation 10 lists what a return contains for each CBAM good: the 8 digit commodity code, the weight, the amount of carbon price relief and the place of origin.

The instrument was amended before it came into force. Regulation 17 of SI 2026/995 adds three items to the return: the level of any default value used, the verified emissions intensity where actual data is used, and whether the good was produced using another CBAM good that meets the conditions in section 147(3)(a) and (b). It also adds one record to regulation 5: evidence, where applicable, that section 147(2) applies to the good. The filing process is set out in the UK CBAM reporting guide.

The Emissions and Verification Regulations (SI 2026/995)

SI 2026/995 runs to 17 regulations in five parts. Its header states that it "has been made partly in consequence of a defect in S.I. 2026/802", which explains the amendment in regulation 17.

Regulation 4 sets the default route: emissions equal the weight of the good multiplied by the default value. Regulation 5 sets the actual emissions route, regulation 12 the requirements to be a verifier and regulation 15 the accreditation bodies; the UK CBAM verifiers page covers who qualifies. The default values themselves come from Treasury notices under paragraph 11(1) of Schedule 17, which had not been published by October 12, 2026. The UK CBAM default values page tracks them.

The Transitory Provision Regulations (SI 2026/830)

SI 2026/830 has three regulations. It modifies Schedule 17, and the late-return penalty table in Schedule 24 to the Finance Act 2021, for the launch period only. A person who triggers registration in 2027 has until January 31, 2028 to register. Regulation 2 replaces the quarterly accounting periods with the three periods listed below.

• January 1 to December 31, 2027: payment and return before the end of May 31, 2028.
• January 1 to March 31, 2028: payment and return before the end of July 31, 2028.
• April 1 to June 30, 2028: payment and return before the end of September 29, 2028.

The standing rule in paragraph 6 of Schedule 17 applies after June 30, 2028. Every date is laid out in the UK CBAM deadlines calendar.

The Interest (Appointed Day) Order (SI 2026/994)

SI 2026/994 has two articles and sits outside the Finance Act 2026. It appoints January 1, 2027 as the day on which sections 101 and 102 of the Finance Act 2009 come into force "for the purposes of the carbon border adjustment mechanism, including any penalties assessed in relation to that tax". Late payment interest therefore runs on unpaid CBAM, and repayment interest on sums HMRC pays back.

What Each Instrument Determines in Practice

Each question an importer asks is answered by one provision of the Act read together with one statutory instrument. The table below maps the eight practical questions to their sources.

Five items remained outstanding on October 12, 2026.

1. Commons approval of SI 2026/809, required by October 20, 2026.
2. The objection periods for SI 2026/802 and SI 2026/995, which end on November 2 and November 13, 2026.
3. Treasury default value notices under paragraph 11(1) of Schedule 17.
4. HMRC force of law notices. Both are published as drafts on gov.uk, which states that they "have not yet commenced and do not currently have the force of law".
5. The first sectoral rates. No rate appeared in HMRC's CBAM collection on gov.uk on October 12, 2026. The gov.uk policy summary (updated September 9, 2026) explains the calculation method and says an illustrative example rate "will be set out in Autumn 2026".

Each of these changes what an importer files or pays. CBAM Brief, the site's email alert service at EUR 199 a month, sends an alert the day a CBAM certificate price, default value, CN code or deadline changes.

How UK CBAM Legislation Compares With Regulation (EU) 2023/956

UK CBAM legislation is a tax statute with five statutory instruments, while the EU mechanism rests on one regulation, Regulation (EU) 2023/956, and 14 Commission acts. The primary EU text is explained in the guide to CBAM Regulation (EU) 2023/956, and the secondary acts in the list of CBAM implementing regulations. The EU CBAM guide explains how the EU mechanism works as a whole.

The price row shows the gap in maturity. The EU published an official Q3 2026 certificate price of EUR 82.32/tCO2e on October 5, 2026. The UK has a formula in law and no published rate.

Why the UK Chose a Tax Instead of a Certificate Mechanism

The Finance Act 2026 states no reasons for the choice; its structure shows what the choice delivers. A tax can be created by a Finance Act and collected by HMRC through interest, penalty and appeal rules that already exist, with no new market infrastructure. The five consequences for an importer are listed below.

• No certificate market: nothing is bought in advance, so there is no purchase platform and no repurchase or cancellation cycle.
• No quarterly holding requirement: the EU rule that applies from 2027, holding certificates at the end of each quarter for at least 50% of the emissions embedded in goods imported since the start of the year (Article 22(2)), has no UK counterpart.
• Payment to HMRC, not surrender: liability is settled in money with the return for each accounting period.
• Tax enforcement: interest under the Finance Act 2009 and penalties under Part 11 of Schedule 17 replace the EU's per-tonne penalties.
• Tax appeals: Part 12 of Schedule 17 provides reviews and appeals to the tribunal.

The UK CBAM vs EU CBAM comparison covers the operational differences, and the CBAM certificates guide explains the EU cycle that the UK tax does without.

Does UK Legislation Allow Linkage to the EU System?

Yes. Section 156 of the Finance Act 2026 lets the Treasury amend Part 5 by regulations to exclude from the charge emissions embodied in goods that originate from a country or territory with a linked emissions trading scheme. Section 157(4) puts those regulations under the affirmative procedure, so the House of Commons must approve a draft first.

No regulations under section 156 appeared on legislation.gov.uk on October 12, 2026, and the gov.uk policy summary (updated September 9, 2026) records no exempt jurisdictions. The negotiation itself is covered in the guide to UK and EU ETS linkage.

Frequently Asked Questions About UK CBAM Legislation

Which Act of Parliament creates UK CBAM?

The Finance Act 2026 (2026 c. 11), which received Royal Assent on March 18, 2026. Part 5, sections 142 to 158, creates the tax, and Schedules 16 to 19 list the goods and set the administration, offences and supplementary amendments.

How many statutory instruments implement UK CBAM?

Five, as of October 12, 2026: SI 2026/802, SI 2026/809, SI 2026/830, SI 2026/994 and SI 2026/995. Four are regulations made under the Finance Act 2026. The fifth, SI 2026/994, is an appointed day order made under the Finance Act 2009 that applies interest to CBAM.

Is the UK CBAM rate formula final?

Not yet. The formula sits in section 149 of the Finance Act 2026 and in SI 2026/809, which was made on July 13, 2026, but one parliamentary step remained on October 12, 2026. SI 2026/809 follows the made affirmative procedure, and Parliament's records show no approval resolution and an approval period ending on October 20, 2026. Under section 157(12) of the Finance Act 2026, an instrument that lapses does not undo anything already done under it, and a new instrument can be made.

Which goods does UK CBAM legislation cover?

Five kinds of goods, specified in Schedule 16 to the Finance Act 2026 and named in section 143(3): aluminium goods, cement, fertilisers, hydrogen, and iron and steel goods. Ceramics and glass were part of the scope proposed in the March 2024 consultation and are not in section 143(3).

Does UK CBAM legislation apply in Northern Ireland?

Yes. Section 143(1) of the Finance Act 2026 charges CBAM when a good is imported into the United Kingdom, and the gov.uk policy summary confirms that the mechanism applies across the whole of the UK, including Northern Ireland.