UK CBAM Rates and Carbon Price Relief

If you open SI 2026/809 looking for the rate you will pay, you will not find it. The instrument provides the legal method for calculating the UK CBAM rate and for determining carbon price reliefcarbon price reliefA reduction of UK CBAM liability for eligible embodied emissions already subject to a qualifying overseas carbon price, capped at the UK liability.. It is a calculation framework, not a table of ready-to-use rates.

Several notices and operational inputs were still outstanding at the research cutoff. You can map the data flow now, but you cannot fill the gaps with assumed rates, standards or exchange rules.

How the quarterly CBAM rate is built

For a quarter, the average UK ETS price is the mean of auction clearing prices in the preceding quarter. If no allowances were sold in that quarter, the method looks back to the most recent quarter in which allowances were sold.

The free-allocation adjustmentFree-allocation adjustmentReduction of certificates to surrender: FAA_g = SEFA_g,y × M_g; zero for electricity. Actuals → Column A path (Eq. 2–5, recursive for precursors); defaults → Column B path (Eq. 6). uses the relevant scheme-year factor in Article 16(14) of Commission Delegated Regulation (EU) 2019/331, as assimilated and amended by SI 2026/278.

Keep that assimilated-and-amended wording intact in any summary you write. The assimilation and the amendment are both part of the reference.

The instrument sets the method, not a table of numerical sector rates. Take the rates themselves from the applicable official source at the time you need them.

Who can claim carbon price relief

Relief may be available where the good was made or processed at an installation participating in a qualifying carbon-pricing scheme, and where the verification conditions are met.

Participation can include a voluntary participant below a scheme threshold, provided the scheme itself satisfies the mandatory-coverage criteria.

A qualifying scheme must:

• be publicly administered;
• require the relevant class of installations to participate;
• impose a direct or qualifying indirect emissions cost;
• publish its rules, scope and headline price.

For an indirect fuel-price mechanism, emissions-factor sources and methods are left to a Treasury notice. That notice was an operational dependency at the cutoff.

Verification: who may sign, and what they verify

Verified information includes total relevant installation emissions, emissions subject to each scheme element, monetary supportmonetary supportFinancial support or compensation that the UK CPR method requires to be reflected when determining the effective carbon price. and, where relevant, indirect-scheme emissions factors.

The verifierVerifierAccredited independent third party confirming the SEE is free of material misstatement; any EU or third-country legal person; only values in a verification report count for actuals. Importers receiving "verification reports" from third part must satisfy the accreditation requirements named in an HMRC notice, and must be accredited by a full member of Global Accreditation Cooperation Incorporated.

The verifier must also be independent of the installation, the importer and the relevant authorities. Test that independence early, before verification work is commissioned.

The final instrument does not hard-code specific ISO standards. If guidance or a notice names a standard, record it with that source status rather than presenting it as words of the SI.

The relief calculation runs in 5 steps

The effective carbon priceeffective carbon priceThe verified net carbon price recognized under the UK CPR method after required adjustments. follows 5 statutory steps:

1. Identify relevant emissions.
2. Identify those subject to scheme elements.
3. Price the elements.
4. Divide by total emissions.
5. Deduct monetary support per tonne of carbon-dioxide equivalent.

Each qualifying precursorPrecursorUpstream CBAM good consumed as input to a complex-good process; listed per route; quantities always monitored per Annex II pt E. requires its own effective-price calculation. Carbon price relief is then the effective price multiplied by eligible embodied emissionseligible embodied emissionsThe portion of a good's embodied emissions that qualifies for UK carbon price relief., and it cannot exceed the CBAM liability.

What to prepare while the notices are outstanding

Map each installation, each carbon-pricing scheme element and each precursor. Then identify who can supply the verified emissions figures, the monetary support figures and the scheme-participation evidence.

Keep the three calculations separate: the rate calculation, the effective-price calculation and the final relief calculation. Running them as one step hides which input is still missing.

Two gaps in the SI are worth recording now: it supplies no exchange-rate period and no rounding convention. Foreign-currency procedure is delegated to an HMRC notice.

Retain scheme-eligibility evidence, the verification form and the calculation records for 6 years from the day after the accounting-period end.

Before you rely on the rules, recheck Commons approval and fetch every relevant Treasury or HMRC notice. A legally defined method is not yet the same thing as a fully operable workflow.

Source note: This article is based on the as-made text of SI 2026/809 at the official legislation.gov.uk locator. Parliamentary approval, notices, rates and operational forms must be rechecked at publication and again before a claim.