Introduction
Following the latest developments in the UK-EU political relationship, including the new deal reached on 3 June 2025, there has been increased speculation about the future of carbon emissions alignment — and what this means for businesses navigating the Carbon Border Adjustment Mechanism (CBAM). Here, we aim to clarify the situation and bust some common misconceptions.
CBAM is Here to Stay — In Both the EU and the UK
First and foremost, despite political intentions for closer carbon market alignment, CBAM itself is not going away. The EU’s CBAM is already in effect, and the UK has confirmed it will launch its own CBAM regime in 2027. Alignment of carbon markets does not mean CBAM will disappear; rather, it means that in the future, the UK and EU might find ways to streamline and potentially integrate their respective CBAM systems.
Don’t Expect Integration to Happen Overnight
While there is a clear political intention to align the UK and EU carbon markets, history shows that such alignment takes time. For instance, it took nearly a decade for Switzerland to integrate its carbon market with the EU’s Emissions Trading System. Similarly, any operational integration of CBAM between the UK and EU is likely to be a long-term project.
Currently, the EU is also considering simplifications under the so-called ‘Omnibus’ review, which could lead to some easements. However, this doesn’t alter the core requirement: both the EU and UK CBAMs will remain firmly in place.
Key Takeaways for Traders
👉 CBAM Figures Remain Essential:
You will need to continue gathering CBAM figures for goods you import and be able to produce CBAM figures for goods you export. Even if the UK and EU reach an agreement on alignment, CBAM reporting will still be needed. Emissions data will be required for goods entering both markets — and for goods moving between them, especially until integration is fully operational.
👉 Global CBAM Landscape is Growing:
Other countries, including Taiwan and Australia, are expected to introduce their own CBAM systems. This means that for UK exporters — especially those selling goods that later enter the EU — CBAM figures will continue to be crucial.
👉 UK CBAM to Cover Imports from 2027:
Once the UK CBAM comes into force in 2027, importers will have a legal responsibility to submit emissions data for goods entering the UK. This includes goods from the EU, ahead of any formal integration of the two systems.
👉 Reporting Obligations Likely to Stay:
While a future UK-EU CBAM integration might eliminate any ‘double carbon tax’ scenario, it will not necessarily remove reporting obligations. Traders should be prepared to submit emissions data for cross-border trade in the foreseeable future.
What This Means for Your Business
The bottom line? The requirement to complete CBAM calculations and report emissions data has not gone away. Instead, it is vital for businesses to continue providing their EU clients with accurate CBAM figures. In parallel, traders need to keep preparing for the UK’s CBAM launch in 2027 — where reporting to HMRC will become a legal responsibility for importers.
Staying ahead of these changes will ensure your business remains compliant, competitive, and prepared for the evolving carbon landscape.
If you need support with CBAM compliance — whether in the EU, the UK, or further afield — our team is here to help.
Let’s work together to ensure your CBAM reporting is accurate, timely, and future-proof.