From 1 January 2027, the UK Carbon Border Adjustment Mechanism, or CBAM, will apply to specified imported goods, including certain iron and steel products.
For wholesalers and independent merchants, CBAM is not a reason to make broad assumptions about every steel product. It is a change that will bring greater focus to sourcing, product data and forward planning across relevant parts of the supply chain.
What is CBAM?
CBAM is designed to ensure certain carbon-intensive imports face a comparable carbon cost to equivalent UK-made goods. It helps reduce the risk of production moving overseas simply to avoid carbon costs.
Iron and steel are among the sectors included from 2027. However, CBAM is not a tax on every product containing steel.
Whether a product is in scope is determined by its commodity code. That means some steel products may be relevant, while others may not be.
Why does it matter to wholesalers?
The direct CBAM liability normally sits with the importer. But the wider effects may still be felt across the trade.
For wholesalers and merchants, the areas to watch are likely to include:
- Sourcing: product origin and supply routes may become more important for relevant goods.
- Product information: clearer data may be needed to support decisions around in-scope goods.
- Forward quotations: there is no single CBAM percentage, so broad assumptions are unlikely to be helpful.
- Customer conversations: customers will want practical, clear information where their projects or planned requirements extend into 2027.
CBAM is a product- and supply-route-specific issue. The position for a relevant import can depend on the commodity code, net weight, country of origin, emissions information available and the applicable CBAM rate.
There is no one-size-fits-all answer
It would be misleading to apply a blanket CBAM uplift across a whole steel range.
Where CBAM applies, the calculation is based on the direct emissions embodied in the imported goods. The importer may use independently verified emissions data, or Government default values where applicable. Any qualifying carbon price already paid overseas may also be relevant, provided the right evidence is available.
That level of detail is why clear information and early planning are more useful than speculation.
How Prokura is preparing
Prokura is preparing for CBAM now, reviewing relevant product lines and supply routes as part of our ongoing supply-chain planning.
Our focus is to keep customers informed with clear, practical information as the position develops, while continuing to provide the dependable service, stockholding and product support customers expect.
Planning ahead for 2027
If you have forward stock requirements, customer projects or quotations extending into 2027, speak to your Prokura account manager early so we can plan alongside you.
Early conversations give us the best opportunity to review requirements, discuss availability and support your customer commitments.
The aim is simple: to keep your supply chain moving, with clear information when it matters.
A note for direct importers
If your business imports potentially relevant goods directly, you should review your own CBAM position and seek appropriate tax, customs or legal advice.
For the latest official information, visit GOV.UK’s CBAM policy summary.
This article is general information only and is not tax, legal or customs advice.