James Murray has published illustrative rates and default emissions values to help businesses prepare for the UK Carbon Border Adjustment Mechanism.
The mechanism begins on 1 January 2027 and will apply a carbon price to specified emissions-intensive imports comparable with that faced by equivalent UK production.
The first-quarter rates released by the Treasury are illustrative and based on preliminary data. They do not create a tax liability, and official rates for the first quarter of 2027 will be published before the end of this year.
Official rates will then be set and published at the start of every quarter. Importers will be able to use government default emissions values when they cannot establish the actual embedded emissions in their goods.
The default values use a trade-weighted product-level approach and exclude European Union data. A 10 per cent uplift has been applied across sectors other than fertiliser to avoid making the default route more advantageous than reporting actual emissions.
Those values will apply during 2027 and 2028. The Government intends to introduce country-specific defaults from 2029 and will review the appropriate uplift at that point.
Murray, the Financial Secretary to the Treasury, said the material would help importers and international partners prepare. The technical regulations have already been laid under the Finance Act 2026, while HMRC is continuing engagement before implementation.
