Importers of steel, cement and fertilisers could face major cost increases under new UK carbon border rules
UK importers of carbon-intensive goods could face millions of pounds in new annual costs from 2027 under the Government’s forthcoming Carbon Border Adjustment Mechanism (CBAM), according to new analysis from customs and compliance specialists Allied Group.
The policy, designed to ensure imported goods face a carbon cost equivalent to that paid by UK producers under the UK Emissions Trading Scheme, will initially apply to imports of iron and steel, aluminium, cement, fertilisers and hydrogen.
Analysis by Allied Group suggests that default emissions calculations could add between £400 and £450 per tonne to certain carbon-intensive imports compared with verified supplier emissions data.
As the UK Government has not yet published its final default emissions guidance, the projections use established EU CBAM default values as a working proxy.
At volumes of around 5,000 tonnes a year, typical for a mid-sized importer of steel or cement, the difference could amount to approximately £2m in additional annual costs.
The modelling highlights how reliance on default emissions values, rather than verified supplier emissions data, could significantly increase the carbon cost exposure facing UK importers once the regime enters its payment phase.
Sector modelling illustrates the potential impact across several carbon-intensive supply chains.
A mid-sized steel importer bringing 3,000 tonnes into the UK annually could face around £1.2m in carbon costs under default emissions values compared with validated supplier data.
A cement importer bringing 2,500 tonnes into the UK each year could incur around £1m in additional annual costs, while a fertiliser importer bringing 1,500 tonnes annually could face between £600,000 and £675,000 in additional costs if default emissions calculations were applied.
In margin-sensitive sectors such as construction, manufacturing and agriculture, cost increases of that scale could materially affect profitability, pricing decisions and supply chain strategies.
The European Union has already introduced its own Carbon Border Adjustment Mechanism. The system is currently operating in a transitional reporting phase, requiring importers to submit emissions data without paying the carbon charge. Importers will be required to purchase and surrender CBAM certificates from April 2027.
Stephen McAneney, Founder and Director of Allied Group, said the introduction of carbon pricing on imports represents a major structural shift in international trade.
“Brexit fundamentally changed customs processes. CBAM now changes the cost base of trade by introducing carbon as a priced input within cross-border supply chains, alongside duties, VAT and freight.
“For importers of steel, aluminium, cement and other energy-intensive materials, that creates a new layer of financial exposure. From 2027, it becomes a direct cash cost.
“Where default emissions values are applied, the differential can be substantial, particularly for higher-volume importers. In some cases it could move into six- or even seven-figure territory annually.
“The risk is not just paying the carbon charge itself, but paying more than necessary because emissions data has not been properly validated or aligned with customs declarations.
“Businesses that act early by mapping commodity codes, validating supplier emissions data and modelling their exposure will be far better positioned to manage that risk.”
In response to growing demand for guidance around the policy, Allied Group has launched Allied CBAM, a specialist modelling and compliance service designed to help importers assess potential carbon liabilities ahead of enforcement.
Members of the team are among the first professionals in the UK and Ireland to complete advanced certification through the International Association for the Carbon Border Adjustment Mechanism, with the organisation accredited under the IACBAM 3003:2025 CBAM Training Provider standard.
The company is also delivering accredited training programmes to help businesses prepare for the new regime, covering issues such as identifying goods within scope, managing supplier emissions data and aligning carbon reporting with existing customs and import processes.
Kieran McCann, Head of Sales at Allied Group, said many importers are still underestimating the potential financial impact of CBAM.
“Most businesses know CBAM is coming, but very few have actually calculated what it could mean for their bottom line.
“For companies importing steel, cement or fertilisers, the difference between default emissions values and verified supplier data can quickly move into six- or even seven-figure territory.
“What we’re doing is taking real import data, supplier emissions information and commodity classifications and modelling the potential carbon exposure in practical terms. That gives businesses a clear view of their potential liability before the payment phase begins.
“Ultimately it’s about helping importers align carbon reporting with their customs processes, validate supplier emissions data and avoid carrying a higher cost base than necessary when CBAM moves into full enforcement in 2027.”
For more information on Allied Group visit: www.allied-group.co.uk.
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