The UK government stated on October 28, 2026, Budget day, that it intends to extend the UK Carbon Border Adjustment Mechanism to refinery products, subject to a consultation. HM Treasury and HM Revenue and Customs published the consultation document the same day.
It runs for twelve weeks and closes at 23:59 on January 20, 2027. No start date is proposed; the government says it will set out a timeline in due course.
What the government said
The ministerial foreword, signed by James Murray MP, Financial Secretary to the Treasury, recalls that at Budget 2025 the government said it would consider the case for bringing refinery products into scope.
It then states: "Today, I can confirm that we intend to deliver that scope expansion, subject to consultation on both the feasibility and impacts of doing so." The document asks how the expansion can be done in a way that is "credible, proportionate and effective in addressing carbon leakage".
The consultation is a decision in principle with a procedure attached, not a change in the law.
The UK CBAM itself starts on January 1, 2027 for five sectors, aluminium, cement, fertilisers, hydrogen, and iron and steel, under Part 5 of the Finance Act 2026. Refinery products would be a sixth sector, added later by further legislation.
Which products are under discussion
The document works with a subset of refinery output rather than the whole sector. Paragraph 4.10 lists sixteen 8-digit commodity codes under heading 2710 that "could be subject to CBAM under this approach": motor spirit in four octane and lead bands, aviation spirit, spirit-type jet fuel and other light oils under 2710 12, kerosene jet fuel, other kerosene and other medium oils under 2710 19, and four bands of gas oils by sulphur content under 2710 19. In plain words: petrol, diesel, jet fuel and kerosene.
Consultees are asked whether limiting scope to fuels and blending components made at refineries is the right balance between feasibility and carbon leakage protection. A separate section covers low carbon fuels blended into those products, such as sustainable aviation fuel, hydrotreated vegetable oil and ethanol.
How the charge would work
The consultation proposes to apply the existing UK CBAM design: the same rate methodology and the same approach to relief for a carbon price paid abroad, both put to consultees as questions. The liable person would be the UK importer, as for the current sectors.
The document calls applying a CBAM to refinery products "a world first" and says it tests "some fundamental design questions around how to assign emissions to refinery products and calculate default emissions values".
Two statements on the existing scheme are worth noting for every UK importer, not only for fuel traders. Paragraph 4.60 confirms that for the current sectors the government will introduce country-specific default emissions values from 2029, one value per good per country, replacing the single global value used in 2027 and 2028.
Paragraph 4.63 notes that current default values draw on EU data and that the EU has no default values for refining, so new data sources are needed.
What it means for timing
Paragraph 4.86 sets out the position: the government intends to include a subset of refinery products "as soon as it is feasible", subject to the responses, and "will set out a timeline in due course".
The current scheme's registration and return system continues to be built into 2028, with the first returns due that year. Anyone pricing fuel imports should therefore treat refinery products as outside the UK CBAM for 2027 and plan for a later start that has not been fixed.
Fuels Industry UK, the refining trade body, states on its policy page that a letter received in March 2026 from the Exchequer Secretary announced a decision not to include refineries in the CBAM from 2028, "despite the sector meeting the three tests for CBAM inclusion set by Treasury".
The October 28 statement supersedes that position as a matter of intent, while leaving the date open.
How this compares with the EU CBAM
The EU CBAM covers no refinery products. Regulation (EU) 2023/956 applies to cement, iron and steel, aluminium, fertilisers, electricity and hydrogen, and the downstream extension under negotiation (COM(2025)989) adds steel- and aluminium-intensive goods, not fuels.
A UK charge on imported petrol, diesel and jet fuel would have no EU counterpart, which is why the consultation calls it a first and asks about traceability across refinery supply chains.
For companies importing into both markets, the practical difference stays the same: the EU system is a certificate mechanism with an authorised declarant, the UK system is a tax with a return and a liability settled with HMRC.
How to respond
Responses go through the online form linked from the consultation page or by email to the CBAM policy team at HMRC, by 23:59 on January 20, 2027.
The document is Carbon Border Adjustment Mechanism (CBAM): a consultation on sectoral scope expansion to include refinery products, HM Treasury and HM Revenue and Customs, October 28, 2026, published in the Budget 2026 collection.
Background on the scheme as it stands is in our UK CBAM guide, the UK CBAM sector list and the UK and EU CBAM comparison.
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