UK CBAM Starts in January 2027: Will Your Castings Be Taxed?

From 1 January 2027 the UK's Carbon Border Adjustment Mechanism puts a carbon price on certain imported goods, charging the importer the difference between the carbon price paid abroad and the price those goods would have carried if they had been made here.

If you buy cast or machined components from outside the UK, the question is whether it applies to your parts. The answer surprises most people, because scope is set by commodity code, not by what the part is made of.

The basics

CBAM covers selected goods in five sectors: aluminium, cement, fertilisers, hydrogen, and iron and steel. Glass and ceramics were deferred to a later date.

Importers of more than £50,000 of in-scope goods over a rolling twelve months must register with HMRC, with the first accounting period covering all of 2027. Below that, you are outside the regime. The threshold counts every in-scope good you import, not castings alone, so it is easier to cross than it looks.

Scope follows the code, not the metal

Being made of steel does not put a part in scope. Being classified under a listed commodity code does. Checked against the published lists in August 2026:

• 7307, tube and pipe fittings of iron or steel: in scope
• 7326, other articles of iron or steel: in scope
• 7325, other cast articles of iron or steel: not on the list
• 7616, other articles of aluminium: in scope, with the rest of the 76 series
• 8481 (taps, cocks and valves) and 8487 (machinery parts not specified elsewhere in that chapter): outside all five sectors

So a ductile iron casting entering under 7325 is outside CBAM, while a comparable aluminium casting under 7616 is inside it. A cast steel fitting under 7307 is taxed. The same casting entered as a machinery part under 8487 is not.

Two parts of similar weight, from the same foundry, in the same container, can land on opposite sides of a carbon tax purely on classification.

What to check before January 2027

Find the commodity code on your import paperwork. It is on the customs entry, not the purchase order, and if you buy on delivered terms you may never have seen it. Ask your supplier or their customs agent for it.

Check it against the published lists, remembering that sub-headings under a listed heading count too. Add up your in-scope imports across all product lines against the £50,000 threshold. Then ask your suppliers what emissions data they can provide, because where CBAM applies the charge is calculated on embedded emissions, and the default values used in the absence of verified data are rarely favourable.

Classification is your customs agent's judgement, not an engineering one. If a part sits near a boundary, 7307 against 8487 being the obvious one, get the position confirmed in writing well before the deadline rather than in a compliance review afterwards.

Delivery terms decide who pays

CBAM is a liability on the importer, and who the importer is depends on your terms.

Buy ex works or FOB and you are the importer. Registration, returns, emissions data and cost all sit with you.

Buy on delivered terms and your supplier clears the goods, so the position depends on the arrangement between you. Either way, establish in writing who carries CBAM well before 2027. It is an easy thing for both sides to assume the other has covered, and it is one of the less visible differences between a delivered price and an ex-works one. Our own terms are explained in what a DDP price actually includes.

Where we are

We are confirming classifications across our own product lines ahead of the deadline, and establishing what emissions data our foundries can provide for the parts that fall in scope.

None of this is tax advice. It summarises published guidance as it stood in August 2026, for buyers who need to know whether to worry. For your own compliance position, speak to your customs agent or tax adviser.