The UK government has published a list of overseas carbon pricing schemes that currently qualify for carbon price relief under the UK Carbon Border Adjustment Mechanism (CBAM), ahead of the mechanism's introduction.
The list, based on information available as of June 19, 2026, is intended to help importers determine whether the embedded emissions of CBAM goods have already been subject to an overseas carbon price that may be eligible for relief. The measure is designed to prevent double taxation while ensuring imported carbon-intensive goods face a carbon price comparable to that paid by UK manufacturers.
EU ETS, China and India among 16 recognized schemes
The government currently recognizes 16 qualifying carbon pricing schemes, including the EU Emissions Trading System (EU ETS), China's national ETS, India's Carbon Credit Trading Scheme (CCTS), South Korea's K-ETS, Japan's GX-ETS and Australia's Safeguard Mechanism. The list also includes carbon pricing systems in Canada, Chile, Kazakhstan, Montenegro, New Zealand, Serbia, Singapore, South Africa, Switzerland and Taiwan.
The UK government stressed that the list is not exhaustive, noting that some regional carbon pricing systems may already meet the qualifying criteria and that schemes currently under development may become eligible once finalized and implemented. The list will therefore remain under review and will be updated as additional schemes are assessed.
Relief to depend on effective carbon price paid
The amount of relief available will depend on the effective carbon price actually paid on the embedded emissions of the imported goods. Emissions covered by free allowances will not qualify for relief, since no effective carbon price has been paid on them, while rebates and refunds will reduce the amount that can be claimed. Accordingly, no relief may be available where all emissions are covered by free allowances or where the overseas scheme provides full rebates or other relief.
The government also stated that if any changes made after June 19, 2026, result in one of the listed schemes no longer fully meeting the qualifying criteria, that scheme will cease to qualify for carbon price relief. Importers liable under the UK CBAM will remain responsible for determining whether they are eligible for relief, calculating the applicable amount and meeting the related record-keeping requirements.
