UK CBAM: What It Means for Construction Material Imports

The UK Carbon Border Adjustment Mechanism (CBAM) is a policy tool designed to prevent 'carbon leakage' - where companies shift production to countries with weaker climate policies to avoid carbon costs. It does this by applying a carbon price to certain imported goods, ensuring they face similar carbon costs to domestically produced equivalents.

The UK CBAM was confirmed in the Autumn Budget and will apply from January 2027. It covers steel, aluminium, cement, ceramics, glass, and fertiliser - materials that are energy-intensive to produce and heavily traded internationally.

For the UK construction industry, the CBAM will primarily affect:

Imported steel: The UK imports approximately 60% of its steel. Steel from countries without equivalent carbon pricing (notably Turkey, India, and China) will face an additional cost reflecting the carbon intensity of production. Estimates suggest this could add 5–15% to imported steel costs depending on the source country's carbon intensity.

Imported cement and clinker: While the UK produces most of its cement domestically, imports of clinker and speciality cements will be affected.

Aluminium: Heavily used in curtain walling and cladding, imported aluminium will see cost increases, particularly from smelters powered by coal-generated electricity.

The CBAM will operate in phases:

2027: Reporting requirements begin. Importers must declare the embedded emissions in covered goods but won't yet pay a carbon price.

2027–2028: The carbon price will be phased in, initially at a reduced rate, increasing to the full rate over 2–3 years.

The transitional period gives importers time to build reporting systems and for supply chains to adapt. However, the reporting requirements themselves will be significant - importers will need verified emissions data from overseas producers.

Even before the CBAM takes full effect, construction specifiers should:

Review supply chains: Understand where your steel, aluminium, and cement originate. Products from countries with strong climate policies (EU, Norway) will face lower CBAM charges.

Prefer low-carbon products: Materials with EPDs demonstrating lower embodied carbon will be less affected. Recycled steel, low-carbon aluminium, and GGBS-blended cements become more cost-competitive.

Engage with suppliers: Ask manufacturers about their carbon intensity data and CBAM preparedness. Those who can provide verified emissions data will be preferred partners.

Consider domestic sourcing: UK-produced materials subject to the UK ETS already carry a carbon price. CBAM levels the playing field, potentially making domestic production more competitive.