UK CBAM relief: HMRC names the overseas carbon pricing schemes that qualify
When wecovered HMRC’s July guidance package, one question stood out: which foreigncarbon prices would the UK actually recognise? On 27 August HMRC answered it,publishing the provisional list of overseas carbon pricing schemes that qualifyfor carbon price relief under the UK CBAM.
Who made the list
The list runsto 15 schemes [some coverage counts 16; confirm the current count on GOV.UK atpublication]. It includes the EU Emissions Trading System and its Swisscounterpart, China’s national ETS, the Korean and New Zealand emissions tradingsystems, Japan’s GX-ETS, Australia’s Safeguard Mechanism, Canada’s federalOutput-Based Pricing System, India’s Carbon Credit Trading Scheme, Kazakhstan’sETS, and the carbon taxes of Singapore, South Africa, Chile, Serbia andMontenegro. HMRC stresses that the list is provisional, based on informationavailable as of 19 June, and will be updated as further schemes are assessed.Regional schemes not named may still qualify.
What relief actually covers
The mechanicsmatter more than the roll call. Relief reduces UK CBAM liability by theeffective carbon price the imported goods have already borne, and “effective”is doing real work in that sentence. Emissions covered by free allowances donot qualify, because no carbon price was actually paid on them. Rebates andrefunds reduce the claim too. And the whole thing must be evidenced: the claimrests on a Carbon Pricing Verification Form completed by an accredited,independent verifier, with relief capped at the CBAM liability itself.
The legalframework sits in the Calculation of CBAM Rate and Determination of CarbonPrice Relief Regulations 2026, made on 13 July and in force from 1 January 2027alongside the tax.
The EU ETS entry is the headline
For EUproducers selling into the UK, recognition of the EU ETS means their carboncosts will count against the UK charge even though the talks on linking the twoemissions trading systems remain unfinished. That is a practical cushion whilethe diplomats work. The free allowance caveat cuts into it, though. Most EUindustrial installations in CBAM sectors still receive a large share of theirallowances free, and only the portion of emissions actually paid for earnsrelief. The paperwork will need to show precisely that split.
What importers should do
Map yoursuppliers against the list. For each supplier in a qualifying scheme, establishwhat effective carbon price their installation actually pays once freeallocation, rebates and exemptions are stripped out, and start the conversationabout evidence now. The verification form needs an accredited verifier’ssignature, and that takes time to arrange. Suppliers outside any qualifyingscheme are a different conversation: their goods carry the full UK CBAM rate,and that cost difference belongs in your 2027 sourcing decisions.
CBAM-Assuredhelps importers and their suppliers assemble and verify the evidence thatrelief claims will need. Contact us before January makes it urgent.