Explanatory note

These Regulations make provision in connection with the introduction of a new tax called the carbon border adjustment mechanism (“CBAM”). CBAM was introduced by the Finance Act 2026.

Part 1 deals with preliminary matters.

Part 2 sets out how emissions embodied in a CBAM good are to be determined for the purposes of the Finance Act 2026.

Part 3 sets out requirements on operators of installations, verifiers and accreditation bodies about the production and verification of data which are used to calculate emissions embodied in a CBAM good.

Part 4 sets out record keeping requirements on registered or registrable persons.

Part 5 makes amendments to the Carbon Border Adjustment Mechanism (Administrative Provisions) Regulations 2026 to introduce an additional record keeping obligation and to require that additional information is provided on a return.

The reference document entitled “Carbon Border Adjustment Mechanism: System Boundaries Document” version 1.00 dated 10th July 2026 is available on the website at https://www.gov.uk/government/collections/carbon-border-adjustment-mechanism. A person unable to access the document electronically may access it by inspection free of charge at HMRC, 100 Parliament Street, London SW1A 2BQ.

A notice published under a power in these Regulations will be available on the website at https://www.gov.uk/government/collections/carbon-border-adjustment-mechanism. A person unable to access a notice electronically may access it by inspection free of charge at HMRC, 100 Parliament Street, London SW1A 2BQ.

A Tax Information and Impact Note covering this instrument was published on 26th November 2025 alongside Budget 2025. It has been updated alongside this instrument with further information on business impacts and is available on the website at https://www.gov.uk/government/collections/tax-information-and-impact-notes-tiins.